The System: The Glory and Scandal of Big-Time College Football

by Jeff Benedict

  Yet something as innocuous as giving student-athletes grocery money or treating them to lunch violates NCAA rules. Those rules define “boosters” as “any individual, independent agency, corporate entity, or other organization” that promotes or makes financial contributions to athletics, assists in recruiting or provides benefits to student-athletes or their families. Under this broad definition, everyone from a season ticket holder to a nonprofit that prints and distributes T-shirts that say GO BUCKEYES is a booster.

  In other words, there are hundreds of thousands of boosters or, in NCAA parlance, “representative[s] of the university’s athletic interests.” The overwhelming majority of them—easily 99 percent—are rank-and-file supporters whose school spirit and financial backing form the backbone to every college football program. They are students who paint their faces and purchase season tickets all the way up to wealthy alumni who shell out thousands of dollars for luxury suites and donate to nonprofit fund-raising organizations set up to support the athletic department. Boosters from this group are rarely the subjects of NCAA investigations.

  The remaining 1 percent of boosters fall into four basic categories:

  POWER BROKERS. Few individuals have more power than Jimmy Rane and his counterpart at Auburn, Robert “Bobby” Lowder. Rane, sixty-eight, is a self-made multimillionaire who made his fortune at Great Southern Wood Preserving Inc., building its signature product, YellaWood, into the world’s best-selling pressure-treated pine. Rane has been a trustee at Auburn, his alma mater, since 1999. Lowder, a former banking executive, spent two decades on Auburn’s board of trustees. Guys like Rane and Lowder are insiders who raise money, influence decisions and have direct ties to the university or to private foundations that raise money for athletics. And they rarely, if ever, speak to the press. “I’m not a big man on campus and I have no intention of portraying myself that way,” Rane said. “I am not a power broker. I’m trying to do good. I don’t need the money. I don’t need anything. I’m trying to leave the world a better place than I found it.”

  JOCK SNIFFERS. These are boosters who have no direct ties to a university and tend to give money directly to players. Their primary motive is to gain access to student-athletes, particularly ones with the promise of becoming future pros. Nevin Shapiro at Miami was a prime example of this type. This group is most often responsible for scandals.

  BUILDERS. These guys write eight-figure checks and have their names on things—stadiums, practice fields and statues erected on campus in their honor. This group includes James “Bill” Heavener, a member of Gator Boosters Inc. and the CEO of the Heavener Company. Florida’s football complex is named after him. At Tennessee, Jim Haslam is the most prominent booster. The founder of Pilot Oil gave $32.5 million to the university in 2006, the largest single donation in the school’s history. Part of that gift was used to renovate Neyland Stadium. And Tennessee’s practice field is named Haslam Field. Michigan has Stephen M. Ross, a global real estate developer. Among the many properties he developed was the Time Warner Center in New York, and he is the owner of both the Miami Dolphins and Sun Life Stadium. The Ross name is on the academic center for athletes at Michigan as well as its school of business.

  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:

  • spacious football offices adjacent to the stadium

  • a twenty-two-thousand-square-foot weight room

  • a sprawling training table area that offers buffet-style dining rivaling the Ritz-Carlton

  • a team room that accommodates 220 people and offers plush leather furniture, each piece embossed with OSU’s logo

  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.”

  Bobby Stillwell knew that Pickens wanted to make a big gift. But the number had to make sense, and $365 million didn’t make sense. “That was a shockingly large sum,” Stillwater explained. “Nobody went around giving that kind of money, certainly not to athletic programs.”

  Over the following three months, Stillwell talked regularly with Holder. Then, in December, Pickens gave OSU athletics $6 million. He also told Stillwell he was leaning toward tacking on another $100 million. But he was planning to give the money through his will.

  Privately, Holder and Stillwell agreed that Pickens should make his $100 million gift right away, not after he had died. But getting Pickens to see it that way required understanding how he thinks.

  “Boone is an all-in competitor,” Stillwell said. “He goes all in on every hand. He never plays it safe. He likes high risk.”

  Stillwater had a heart-to-heart with his friend.

  “Boone, you’ve got a lot of money now,” he told him. “You like to play big. Why wait another twenty years when you have the money now? Why wouldn’t you want to see the results of what you give?”

  “I never thought of that,” Pickens said.

  The idea of being around to watch the impact that big money could have on an institution appealed to Pickens. On a broader scale, the chance to shake up the status quo in college football had a certain surface appeal. But the idea of parting with $100 million or more all at once still gave him pause.

  “It’s such a la
rge amount of money,” he told Stillwell. “It is hard to give it. Maybe the prudent thing is—”

  “Screw prudent,” Stillwell said. “You don’t have to be prudent. Think of how much fun this will be and what this will mean to the students and the alumni at Oklahoma State.”

  Pickens did some quick figuring. “You know, we can have a lot of fun with this,” he said. “I’m seventy-eight. I’m going to live to be ninety at least. If it takes us three to five years to get this going, I’ll still have almost ten years to have a lot of fun.”

  Stillwell smiled.

  “I want to kick OU’s ass,” Pickens said.

  That’s what Stillwell was talking about.

  “And by the way, Bobby,” Pickens said. “UT, too.”

  Stillwell had deep ties to Texas and had been invited to join its board of regents. “Texas probably won’t be happy if I help arm OSU,” he said. “But I don’t give a damn.”

  They both laughed.

  Stillwell told Holder to rework his request from $365 million down to something more reasonable, something in the $100 million to $200 million range. Unable to think about anything else, Holder spent Christmas Day putting together a new spreadsheet.

  “I tried to get down to a number that was more reasonable,” he said. “I pared it down to $165 million. And I did a spreadsheet that showed we could build this stuff and put football where it needed to be.”

  He e-mailed the spreadsheet to Stillwell that evening. Days later Holder got invited back to Dallas to meet with Pickens and Stillwell. This time Holder brought along OSU’s president at the time, David Schmidly, as well as V. Burns Hargis, chairman of the board of regents. They knew Pickens had just given $6 million and was contemplating another, more sizable gift. Neither had any sense of what was being contemplated. And Holder didn’t tell them how much he was seeking.