Seriously, I thought T. Boon Pickens was much smarter than this!
As reported by Forbes...
The Oklahoma State Cowboys wagered on a few timely deaths, but they lost the bet and the team’s coffers are now $33 million lighter.
The “Gift of a Lifetime” fundraiser, reportedly suggested by OSU alum and Forbes 400 member T. Boone Pickens, was certainly an intriguing one. The athletics department took out $10 million life insurance policies on 27 boosters, between the ages of 65 and 85. The school had projected related revenues could be as high as $350 million, but apparently the boosters were taking their vitamins. Not a single insured booster died after two years, leading the athletics department to cancel the plan in 2009. Unfortunately for the Cowboys, they had shelled out $33 million in that time.
The athletics department tried to recoup some of those payments, claiming that policy records had not been properly delivered. But a U.S. District judge ruled this week that premiums paid over the first two years of the policies, which totaled $16 million, were made legally and could be kept by the life insurance company.
The Cowboys lost their No. 20 spot to Iowa on our most recent ranking of College Football’s Most Valuable Teams, and this latest foible may be instrumental to the team’s declining value. To put the financial loss into context, consider that OSU athletics spent about $16.5 million in each year of the fundraiser’s life, which is 85% of the Cowboys’ football profit of $19.5 million last year. More problematic is that the athletic department, which uses the football team’s operating income to support non-revenue sports like tennis and track, reported total profits of $14.4 million last year.
Suffice it to say, the Cowboys got in over their heads with the life insurance gamble. But with on-field success (the Cowboys beat Stanford 41-38 in last season’s Fiesta bowl) and boosters putting their lives on the line for the school, administrators have to feel comfortable about making a comeback in the near future.
http://www.forbes.com/sites/chrissmi...se-33-million/
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