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  1. #1
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    Oklahoma State's "Death Gamble" - catastrophic failure.

    5 years later and I still cannot believe they did this. Looks like their moral bankruptcy has come back to bite them in the ***:

    OSU Cowboys' Death Wish Goes Unanswered, Lose $33 Million - Forbes


    Kansas wears Adidas.

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    Re: Oklahoma State's "Death Gamble" - catastrophic failure.

    Hadn't heard of that until 5 minutes ago. Wow



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    Re: Oklahoma State's "Death Gamble" - catastrophic failure.

    I missed that one. It's bold.


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    Re: Oklahoma State's "Death Gamble" - catastrophic failure.

    Wow, is this common practice for universities?


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    Re: Oklahoma State's "Death Gamble" - catastrophic failure.

    Quote Originally Posted by jay moe View Post
    Wow, is this common practice for universities?
    Its common practice for many more businesses than you would imagine, but first ive heard of a university doing it.



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    Re: Oklahoma State's "Death Gamble" - catastrophic failure.

    We discussed doing this for Annual Training at drill a long time ago. I was a little concerned, because everyone picked my team chief as the guy we wanted to take out. I had to remind them that I get dibs, since I actually had to deal with him.


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    Re:Oklahoma State's "Death Gamble" - catastrophic failure.

    So weird- and it is nice when it backfires on the corp that does this crap.



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    Re: Oklahoma State's "Death Gamble" - catastrophic failure.

    I remember when they did that a few years ago. I believe Boone Pickens was leading the charge and encouraging others to do the same. I did not realize that the University was paying the premium.


    Stay breathing my friend.



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    Re: Oklahoma State's "Death Gamble" - catastrophic failure.

    Quote Originally Posted by F5cy View Post
    Its common practice for many more businesses than you would imagine, but first ive heard of a university doing it.
    Businesses do it to try and cover (a) losses that would be sustained if they lost a key person and (b) the cost to replace that key person. This article makes it sound like this was an attempt by the university to make a dime by playing the odds that some of their boosters would die (maybe it's just the spin the writers used, but that's how it comes off). Betting against the insurance companies is like betting against Vegas.

    In any case, if these boosters were really so big and valuable, doesn't it seem like they'd probably be writing the OSU AD into their wills anyway?



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    Re: Oklahoma State's "Death Gamble" - catastrophic failure.

    OSU has really made some really bad investments.



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    Re: Oklahoma State's "Death Gamble" - catastrophic failure.

    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.
    I think that's where the problem was - over 2 years, they'd have needed 3 or more of their top boosters to die to break even.

    What was their mortality rate leading up to this decision for their top-50 donors? I'll bet it was lower than the 5%/year required.


    Asteroids are nature's way of asking "How's that space program going?"

  12. #12
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    Re: Oklahoma State's "Death Gamble" - catastrophic failure.

    That's messed up.



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    Re: Oklahoma State's "Death Gamble" - catastrophic failure.

    Quote Originally Posted by TykeClone View Post
    I think that's where the problem was - over 2 years, they'd have needed 3 or more of their top boosters to die to break even.

    What was their mortality rate leading up to this decision for their top-50 donors? I'll bet it was lower than the 5%/year required.
    I am not even sure that what they did was ethical. To get life insurance on a person you have to show insurable interests, such as Husband and Wife, or Kids, or Key-person for a business. I just do not see it. Insuring a donor to make money for an athletic department seems like a real loose definition of Insurable Interest. Would have been interesting to see how a payout would have been handled on that type of plan.


    Many Years Of Cyclone Logos


  14. #14
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    Re: Oklahoma State's "Death Gamble" - catastrophic failure.

    Quote Originally Posted by TykeClone View Post
    I think that's where the problem was - over 2 years, they'd have needed 3 or more of their top boosters to die to break even.

    What was their mortality rate leading up to this decision for their top-50 donors? I'll bet it was lower than the 5%/year required.
    Yes, this is weird. I am going to get $10 million for each of a group of 27 that dies, but it costs me $16.5 million a year? So I need 2 people to die each year just to make anything really? Wow, a University should not be doing this kind of stuff with their big donors.

    I suppose the donors were informed and consented?? If not, that is really jacked up.



  15. #15
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    Re: Oklahoma State's "Death Gamble" - catastrophic failure.

    Just like Vegas, the odds will always be against you. You don't think an insurance company knows what they're doing?



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