Oklahoma State will be on the hook for $33 million to an insurance company after essentially betting on the deaths of wealthy boosters.
The school's athletic department put together a Gift of a Lifetime fundraiser that took out $10 million life insurance policies on 27 of the school's wealthiest boosters. The plan targeted boosters between the ages of 65 and 85 and the life insurance money would all go directly to the athletic department if any of them died.
The school believed that it could make as much as $350 million through the Gift of a Lifetime fundraiser, but the plan hit some major snags.
The major problem is that after two years of paying expensive insurance premiums, none of the boosters died and Oklahoma State realized it owed $33 million to Lincoln Financial. The school ultimately decided to cancel the policy in 2009, but also decided to sue the insurance company for misrepresenting the costs of the plan.
Lincoln Financial countersued for breach of contract, but a Dallas federal judge dismissed both lawsuits last week.
We are surprised and disappointed with the judge's ruling, Oklahoma State spokesman Gary Shutt said on March 12th. We are reviewing the opinion and assessing our options, including a possible appeal.
Not only was it a poor financial decision, though it was suggested by billionaire T. Boone Pickens, but one also has to question the morality of betting on some of your most valued boosters to die. The boosters did have to agree to have life insurance policies taken out on them, but that doesn't make rooting for someone to die -- which is the only way the plan made financial sense -- any better.