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Wednesday, August 16, 2006

Where Do We Draw The Line

Tycoon's $165M gift to Oklahoma State raises both hopes and questions

STILLWATER, Okla. — On the Depression-era night when Boone Pickens was born, the attending doctor gave his father a grim choice: There were complications, and he could save the life of his wife or the baby. But not both.
Thomas Boone Pickens would have none of it. There had to be another option, he insisted, and the physician sweated — successfully — through the first cesarean section performed at the hospital in Holdenville, Okla.

Like his father, the son does not concede easily. In life. In business. Or on the playing field, where Boone Pickens, now 78, has made it his mission to lift his beloved Oklahoma State Cowboys from decades of low-budget mediocrity in all but a handful of sports to eminence in football and beyond. Money's what it takes? Money, the Cowboys now have. Just after Christmas last year, the famed oilman-turned-master investor wired $165 million to a school-connected account.

The donation was the biggest by far in the history of college athletics, a stunning windfall enhanced by a $31 million kick-in from the OSU golf foundation and careful investing that has swollen the total amount to more than $250 million. By the time it's spent, the pot is expected to grow to $343 million.

GIVING BIG: Largest gifts to colleges

To a get-results guy such as Pickens, OSU Class of 1951, it's simple cause and effect. "I've had a lot of experience," he says. "I've had a lot of winners — I'm not talking about athletics, I've had winners in business — and when you get down to it, it's funding and leadership (that make a difference). If you can provide the funding and you get the leadership, you'll have a competitive team."

And if win-loss records fail to reflect that logic? That's one of the hundred-million-dollar questions.

The football team is coming off a four-win season and last-place finish in the Big 12 Conference's cutthroat South Division, and prospects for this year are barely improved. The Cowboys are forecast by media covering the conference to finish next-to-last in the South, ahead of Baylor.

Mike Gundy is entering his second season as coach. He had Pickens' backing when hired in January 2005 and professes to feel no more than the standard major-college pressure to win. Pickens' gift, he says, is "a great opportunity for us."

OSU men's tennis coach James Wadley is more frank about Pickens' donation. "You'll see a bunch of coaches squirming. It raises the bar. It takes away some excuses," he says. "But that's what we all want. You want to compete, and you want to compete at the highest level. If you don't, you shouldn't be in this business."

The money, all of it, is earmarked for facilities. The next seven years will see a remarkable building boom that will provide the track, baseball, tennis and women's soccer and equestrian teams with new stadiums and quarters.

Football will get upwards of $120 million for new offices, new locker and training rooms and additional seating in a newly enclosed west end of its stadium. Gundy and his team will be the primary tenants of a multipurpose indoor practice facility, planned along with probably three practice fields at a cost of $54 million.

All that's atop two sprucing-up and expansion projects undertaken since 2003. By 2008, upgrades to the stadium will have totaled more than $220 million. Counting previous gifts, Pickens (whose name now adorns the stadium) will have underwritten roughly two-thirds of that amount.

"Word has gotten out," says Gundy, a record-setting, four-year starting quarterback for the Cowboys in the 1980s and later their offensive coordinator under Bob Simmons and then Les Miles.

Walk into a high school coach's office during a recruiting trip to talent-rich Texas, "and the first thing they say is, 'You guys are going to build big-time facilities up there,' " Gundy says. "That trickles down to the prospects.

"It's great marketing. It's great advertisement. And it's put us in position to have a lot of success."

'The winning better come'

Wadley says he's getting the same response: "I can get in a lot of houses I couldn't get in before."

OSU's longest-tenured coach at 31 years, Wadley has long had to make do with perhaps its poorest athletics facilities. His team uses the school's recreational courts, which have no locker rooms or restrooms. There isn't an indoor court anywhere on campus or even in Stillwater, and Wadley and his players must drive 45 minutes to an hour or more to Tulsa, Oklahoma City or Ponca City to practice during the winter.

From that poorhouse, the program will move into a $15 million, state-of-the-art facility sometime in the next five or so years.

Then, Wadley acknowledges, "The winning better come."

To put Pickens' $165 million gift in perspective, consider that athletics giving at Oklahoma State had averaged $7 million to $9 million yearly, most from donations tied to priority football seating. Non-athletics giving to the university for the fiscal year ending June 30 totaled $100 million.

Pickens' generosity didn't end with the $165 million. That, along with $6 million he'd donated earlier last December and the $31 million from the golf foundation, immediately was invested in his successful hedge fund, BP Capital Management, and Pickens waived all fees (2% of the original amount plus 20% of the profits).

Say this: He knows money management. BP Capital coaxed first- and second-quarter returns totaling $50 million, according to athletics director Mike Holder. Waiving the fees had saved the school roughly $14 million through the middle of July, Pickens estimates.

What does Pickens get?

Which raises a second question: What sort of influence in OSU athletics does that buy Pickens?

"With a gift like that, of course, they're going to be respectful and I'm going to be asked my opinion on things. It doesn't mean that I'm running anything," he says. "I don't want to get into personnel. I've never told a football coach at OSU, ever, 'Hey, you should play that guy at quarterback.' Or, 'You ought to run more up the middle or pass more.' I'd never be over there jerking people around or something like that. That's not my personality."

Still, a close relationship with Pickens did Holder no harm when Oklahoma State went looking for a replacement for retiring athletics director Harry Birdwell last year.

"Boone didn't pick Mike. He didn't try to pick Mike," says Oklahoma State President David Schmidly, who did choose Holder, then the OSU men's golf coach and a longtime quail-hunting buddy of Pickens. "But ... why wouldn't you want an athletic director that your top donor likes?"

Holder, who won eight national championships in 32 years in charge of the Cowboys golf program and just as notably built a $37 million endowment and debt-free, first-class university golf course, took over as vice president for athletic programs and AD in September. Pickens came through with his big gift three months later.

Gundy was running the football program by then. But Pickens, as a member of OSU's screening committee, was among those who'd championed him during a short search after Miles left for LSU in January 2005.

Pickens was growing increasingly impatient with a program that had won one league title (and that a tie) in 46 years in the Big Eight and Big 12, hadn't played in a top-tier bowl since 1946 and had never put together more than two consecutive years with at least eight wins. When the Cowboys came across gifted coaches — Jimmy Johnson and Miles — they'd soon lose them to other college programs.

"It was just a steppingstone. Miles no sooner got there than he was looking for another job," Pickens says. "What I proposed to the regents and the president of the university (was) if Gundy can do it, he's an OSU guy, he likes to live in Stillwater, he was a great football player for us and it's a natural place to go. That's the kind of advice I try to provide."

Robert Darcy, a regents professor of political science and statistics and past chairman of OSU's Faculty Council, nonetheless has complained about Pickens' heavy hand in school affairs. He was publicly critical of the $165 million gift, painting it as an example of the university's overemphasis on athletics.

"That, to me, is amusing. You give the money where you want it," Pickens says, and he tacks on a caveat. "If you're telling me that somebody in the faculty said that, I'd be careful if I were they because I've said I was going to give more money to the school. I'd want to be a supporter, not a critic."

The timing of Pickens' donation also drew attention from media outlets, including The New York Times. Because of congressional legislation related to Hurricane Katrina recovery efforts, taxpayers making a charitable donation before the end of 2005 received a one-time opportunity to deduct up to 100% of their adjusted gross income, double the usual limit.

"Boone gave to OSU for one reason — to make the school more competitive in athletics and academics," Pickens' spokesman, Jay Rosser, said Tuesday via e-mail. "The notion that taxes factored into his thinking is laughable, and the actual tax benefits he received as a result of his giving have been dramatically overstated."

With Pickens' gift, OSU's spending on athletics facilities in the next five to seven years is projected at $316 million — slightly eclipsing the $314 million planned for a new science building, expansion and renovation of the business and architecture schools and other academic-side projects.

It also dwarfs the $11.7 million the university spent on sports facilities in a more than three-decade period from 1967 to 1999, when it began $56 million in improvements to basketball's Gallagher-Iba Arena. Pickens' gift essentially will lead to upgrades for every sport other than men's and women's basketball and golf, the only ones with facilities already up to snuff.

All of the new facilities, except for the equestrian team's, will be clustered onto newly purchased land north of the football stadium, fulfilling Pickens' vision of a sprawling sports complex.

And then ... what?

Do good times inevitably roll?

Oklahoma State has won 48 national team championships, but 34 have come in wrestling and 10 in golf. Two more belong to the Henry Iba-coached basketball teams of the mid-1940s.

'Quantum leap forward'

"If you follow the argument that facilities attract recruits, obviously this is a quantum leap forward for Oklahoma State," says Chuck Neinas, the former Big Eight commissioner and College Football Association executive director.

"Money doesn't buy happiness, and it can't necessarily buy victories. But it certainly creates a platform to develop a program."

Gundy and his staff hit recruiting pay dirt last winter, signing a class that by most assessments ranked among the nation's 20 best. He says the facilities promised by Pickens' gift were a factor.

There remains a gap between Oklahoma State and much of the rest of the Big 12 in operational spending on such necessities as equipment, travel, recruiting, salaries and scholarships.

OSU typically ranks ninth in the conference, and the roughly $8.5 million it spent on football last year was dwarfed by Texas' $15.5 million outlay en route to the national title, according to figures provided by the schools. With facilities covered, however, other donors can kick into those other areas, particularly scholarships.

"It was obvious to me and everyone else associated with OSU that we'd been playing with a short stick forever and someone needed to do something unprecedented to change the paradigm around here," Holder says. "All we've done for decades is just talk. Finally, there's more than just talk."

It's a $165 million bounce that Schmidly says is being felt beyond the university's playing fields and courts. "I'm getting ready to do a huge campaign for student scholarships," the OSU president says, "and I can go to donors and say, 'Look what Boone did to help us with athletics. Can you help us with academics?' So it's made my job a hell of lot easier.

"And let's face it. This is America. People like to be associated with winners. They like to be associated with things that are on the upswing, and this institution is on the upswing. In many ways, Boone gave us that momentum."


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