Billionaire T. Boone Pickens is being credited with a novel -- some would say morbid -- financing plan that his fellow Oklahoma State University fans hope will lift their beloved Cowboys football team to the top of the Big 12 Conference standings.
Over the course of the last year, Pickens, 77, steered his alma mater's athletics department to buy life insurance policies for himself and a posse of aging Cowboys donors. The department hopes to net about $250 million from the proceeds by the time the last donor dies.
The insurance program is in addition to about $200 million in cash that Pickens has donated in recent years so Oklahoma State can better compete against rival Big 12 football powerhouses Texas, Nebraska and Oklahoma.
Although the Cowboys have won 48 national NCAA titles in such sports as wrestling and golf, that record isn't good enough for the many Cowboys fans who care only for Oklahoma State's performance on the gridiron.
The Pickens-inspired life insurance plan is seen as a way to help keep the university's athletic department funded over the next few decades.
"Until Boone Pickens entered the picture for OSU, we were merely a participant in the Big 12 -- not a competitor," said Mike Holder, Oklahoma State's athletic director.
Oklahoma State's insurance plan, which took about a year to piece together, underscores the sometimes controversial methods that colleges are considering to find new sources of revenue to fund coaches' salaries, athletic scholarships, capital improvements and other expenses generated by major college sports.
Many wealthy donors remember college athletics in their estate planning. But having a university bundle up a group of donors and buy life insurance on them is a new twist.
"In recent years, there's been a flurry of new charitable-related products coming from the insurance field," said Chris Yates, director of planned giving at Stanford University. "I've had to scramble just to keep up with how they work."
Stanford has yet to consider a Pickens-like insurance plan and probably would not unless it could outperform alternative investments, Yates said. That would mean matching or exceeding Stanford's 14.8% average annual return over the last decade.
The Cowboys borrowed $20 million from a booster association to pay the premiums for $10 million in whole-life insurance policies for each of the 25 or so carefully selected donors, including Pickens, who are between the ages of 65 and 85.
