The System: The Glory and Scandal of Big-Time College Football (31 page)

TURBO BOOSTERS
.
This is the ultimate exclusive booster club. It’s so exclusive that only two billionaires belong—Nike’s chairman, Phil Knight, and oil and gas tycoon T. Boone Pickens. These two march to a very different drummer. They have the deepest pockets, and they are driven to single-handedly catapult their respective alma maters—Oregon and Oklahoma
State—to college football relevance. Prior to their arrival on the scene, Oregon and Oklahoma State were afterthoughts in the Pac-10 and the Big 12. But in recent years both schools have been in the running for the national title.

Knight began bankrolling Oregon athletics in the 1990s. Eventually, he donated $100 million to the University of Oregon’s Legacy Fund, the single largest gift in the university’s history. He also contributed between $50 million and $60 million for the football stadium expansion, along with another $68 million for the construction of Oregon’s new football operations facilities.

Pickens got in the game after Knight. In 2006, Pickens, the CEO of a Dallas-based hedge fund, gave a $165 million gift to Oklahoma State athletics. It was the largest single donation for athletics to an institution of higher education in American history. That was in addition to the $83 million he put into overhauling OSU’s football stadium between 2003 and 2008. The combined $248 million in gifts produced a new baseball stadium; new soccer, track and tennis facilities; an equestrian center; various outdoor fields; and a multipurpose indoor practice complex.

The crown jewel, however, was Boone Pickens Stadium, a sixty-thousand-seat state-of-the-art facility ringed by 101 luxury suites and four thousand club seats that opened on September 5, 2009. The field and the amenities set the gold standard for college football:

But Pickens’s record-setting gift did more than overhaul the football stadium. It touched off an unprecedented fund-raising drive dubbed The Next Level. More than $1 billion was raised, which led to one of the largest building projects in recent NCAA history.

Why spend a fortune on football?

“What I keep coming back to is we’re in the Big 12 and it’s a tough conference,” Pickens said at the time of the record-setting gift. “I want us to be competitive.”

At the time he was also asked whether he thought his investment would pay off. “I’d bet my ass on it,” he said.

It turned out to be a good bet. OSU has done more than become competitive. Since the infusion of Pickens’s money, it has become a national power in football. In 2010, the team won eleven games for the first time in school history and finished the season ranked thirteenth in the nation. The following year it won twelve games, captured the Big 12 Conference championship and defeated Stanford in the Fiesta Bowl. It almost won the national championship, too, finishing third in the country at 12-1.

There is a lesson in this that Knight and Pickens understand: the best facilities in college football attract the best talent. Oregon competes for the national title virtually every year. Meanwhile, in 2012, more than twenty-five OSU players were on NFL rosters. That put OSU in the top fifteen schools in the country for producing elite NFL talent. Before Pickens came along, OSU had a losing program and was a financial drain on the athletic department.

Rivals like to joke that Oregon and Oklahoma State have the only two college football teams with an owner. The irony is that Pickens didn’t set out to turn around the fortunes of OSU’s football team. He just got tired of the team losing its annual homecoming game. So he quit going. Then someone with no ties to the football program challenged him to do something about its losing ways.

Mike Holder wasn’t an obvious choice to start a fund-raising campaign for the Oklahoma State football program. As OSU’s golf coach, he had won eight national championships and led a capital campaign to finance the construction of a world-class golf course outside Stillwater. Over the years he had gotten so good at raising money for the golf team that he had a surplus of $31 million.

The golf team was in great shape. But OSU’s football team was a mess, losing lots of games and lots of money. In a conference like the Big 12, where football is king, a losing program can be a financial drain on all other sports. That’s what worried Holder.

In 2001, Holder was invited to go quail hunting with Boone Pickens. They became friends and would talk from time to time about OSU’s athletics and what it would take to make the football team competitive. Eventually, Holder pitched Pickens on the idea of contributing $20 million to upgrade the stadium.

It wasn’t the first time that Pickens had been asked to give money to football. Back in 1987, when Oklahoma State had two future NFL Hall of
Fame running backs on its roster—Barry Sanders and Thurman Thomas—Pickens was approached by an assistant football coach and asked to funnel money into a secret slush fund. A couple installments of $25,000 would have been pocket change for Pickens while going a long way to quietly helping the team.

“Hold it,” Pickens told the coach. “When I give, every check will be made out to the OSU Athletic Department and marked for golf, football, basketball or whatever.”

The coach persisted. “You know all the schools are cheating,” he said.

“They probably are,” said Pickens. “But you can’t do that indefinitely. You’ll be found out, embarrassed and penalized.”

Instead, Pickens gave $57 million over a number of years to various academic initiatives, including the Boone Pickens School of Geology.

Two years later, in 1989, the NCAA put Oklahoma State’s football program on probation for more than forty recruiting violations that included improper payments to players.

But Holder wasn’t talking about secret slush funds. He suggested the stadium be renamed after Pickens in exchange for the $20 million gift for a face-lift. Pickens liked the idea, and in March 2003 he made the donation. The money was used to upgrade the south side of the stadium and add some suites and club seating, which were completed in 2004.

Holder knew Pickens was capable of doing a lot more, though. He said as much to Pickens. The conversation continued for a year. Pickens was still mulling over Holder’s request for a bigger gift to athletics when OSU’s athletic director, Harry Birdwell, announced he was stepping down in June 2005.

Shortly after Birdwell’s announcement, Holder got a call from Pickens, who suggested Holder apply for the job.

“I don’t want to be AD,” he told Pickens. “I am perfectly happy in the life I have right now.”

“I understand that,” Pickens told him. “It’s because you are coasting through life on your handlebars. You are winning in golf. But you need a new challenge.”

“Well, I don’t want to be the AD,” Holder said.

“Well, I don’t want to give the money unless you are the AD,” Pickens said.

With Pickens poised to become the largest donor in the school’s history, it was hard to ignore his wishes. In mid-August 2005, Holder notified the search committee that he was interested in the job. Two weeks later he was one of eight candidates invited to interview.

OSU had invited Pickens to be on the hiring committee for the AD. But he was too busy running BP Capital, the energy hedge fund he started after selling his oil company. He didn’t have time to get into the details of OSU athletics. Instead, he informed the university that he had designated someone to stand in his place.

Robert “Bobby” Stillwell was a partner at the Houston law firm Baker Botts when Boone Pickens became his principal client in 1963. Eventually, Stillwell became a director at Pickens’s Texas-based oil company Mesa Petroleum, where Pickens made a name for himself on Wall Street as a hostile-takeover specialist. When Pickens left Mesa Petroleum to start BP Capital, Stillwell joined him in 2001 as the company’s general counsel. Pickens also appointed Stillwell to be chairman of his charitable foundation, a move that essentially made Stillwell the gatekeeper to all the groups and individuals approaching Pickens for money.

As a result, Stillwell worked very closely with Holder on the initial $20 million gift that Pickens gave for the stadium upgrade. He had also been intimately involved in talks between Holder and Pickens for a second, much larger donation to OSU sports.

At Pickens’s request, Stillwell joined OSU’s hiring committee for a new AD. And in August 2005, he was on hand when the committee interviewed eight candidates over a two-day period at Addison Airport, north of Dallas.

When the interview process ended, Stillwell brought Pickens up to speed. Holder, it turned out, was the only candidate without experience as an athletic director or assistant athletic director. The consensus was that he wasn’t the best choice for the job. Lack of experience was the primary knock against him. Thirty-two years as a golf coach didn’t necessarily prepare someone to run an athletic department in the Big 12, where football rules. At least that was the conventional thinking.

Pickens disagreed. He made his case for Holder to Stillwell.

“What I want is a leader,” Pickens said. “And Holder is an obvious leader.”

The message got through to OSU. On September 15, 2005, Mike Holder was introduced as the new AD at OSU.

“If I was going to commit $100 million or whatever, I had to have someone I was comfortable with spending the money,” Pickens explained. “I said that’s the way you get the money. So they went along with that.”

Hours after his press conference, Holder got a congratulatory call from Pickens, who also asked him how much it would cost to make the football team competitive in the Big 12.

Holder spent his first week on the job running numbers and preparing spreadsheets. Then he flew to Dallas to meet with Pickens and Stillwell. There he made his case for a massive stadium renovation, including the installation of ninety-nine luxury boxes. That alone, he projected, would cost $100 million. But Holder had also built in funding for a new baseball stadium, practice fields and training facilities for other sports. A lot needed to happen, he argued, to put OSU in position to beat Oklahoma and Texas. The total price tag was $365 million.

“You don’t just want to put a name on your stadium,” Holder told Pickens. “You have to have the resources to put a competitive team in that stadium.”

“Mike, I’m not going to give $365 million to be competitive,” Pickens said.

“Well, you wanted to know what it would cost. That’s what it will cost.”

“That’s too much,” Pickens said. “If I give you $365 million, everybody else will stop giving. It will stifle all fund-raising.”

Holder left Dallas empty-handed and confused. He and Pickens had been talking about a substantial gift for years. Now that he was AD, he figured it was a sure thing. “I went to Dallas to see him, and I was disappointed and shocked that I didn’t make some headway,” Holder said. “I thought it would be $100 million to finish the stadium and then a whole bunch of other things, like a new facility for a lot of sports that didn’t have a facility and an operating budget to go out and compete with the other schools that were winning national championships. That’s why the number was so big—$365 million.”