At every football game in Autzen Stadium, before the ball ever leaves the tee, the student section erupts with cheering, clapping and bouncing. They are greeting one man – a 71-year-old University alumnus and sports enthusiast in sunglasses whom they call Uncle Phil.
Phil Knight founded the athletic apparel company Nike in 1964 and used his profits to improve and add to large portions of the University’s infrastructure. Since 1994, when Campaign Oregon: Transforming Lives began, he has donated approximately $230 million to the campaign, more than one-fourth of the $853 million raised during the University’s largest fundraising endeavor in history.
However, in the current economic climate, The Chronicle of Higher Education suggests Knight’s large donations may trickle off, which could have negative effects for the University.
In a March 13 article, The Chronicle called “bowing to boosters” one of 13 mistakes colleges have made that have contributed to their economic turmoil. In the article, The Chronicle wrote that athletic programs have been making tremendous amounts of money in past years, “(b)ut big-foot boosters like Philip H. Knight, at the University of Oregon, and T. Boone Pickens, at Oklahoma State University, often call the shots. Viewing themselves as majority stockholders in a company, some high fliers browbeat administrators into making accommodations for king football.”
The dangers the Chronicle alludes to are not phantom. After months of suffering sales in the United States, Asia and Europe and retail markdowns, Nike’s profit dropped 47 percent in the last fiscal quarter.
Forbes removed Nike from its recommended stock list in October 2008 when the company’s stock was trading at $55.70. Months later, the company is still off the list and was trading at $49.86 at press time.
Foreshadowing the dip in profits, the company announced in February its impending 4 percent reduction of staff, which amounts to 1,400 employees worldwide.
Nike spokesman Bob Applegate declined to comment on the company’s financial situation.
The loss in stock value directly affects shareholders, and Knight owns 95 percent of the non-public stock of Nike and nearly 20 percent of its publicly traded stock.
Although Knight climbed the Forbes’ list of the world’s richest people from No. 73 in 2008 to No. 52 this year, the list of billionaires shrunk from 1,125 to 793, which helped the billionaires who managed to stay on the list. Despite the increase in ranking, Knight’s net worth dropped $2.2 billion to his current value of $8.2 billion.
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ght’s wealth and generosity, which in the University’s case amounts to just under 3 percent of his net worth, have brought the University a renovated library, a law center, the Moshofsky Center, a re-done Casanova Center and Autzen Stadium, the Hayward Field video board, the new academic learning center for athletes, the Matthew Knight Arena and at least 16 Knight endowed professorships, two endowed deans and one endowed president’s chair.
Knight has donated to the academic learning center for athletes in a unique way. He represents Phit LLC, a small but separate corporation under the umbrella of the UO Foundation. Phit is paying for and controlling the center’s construction, and then gifting the finished product to the University.
Relying on enormous gifts (Knight’s largest was $100 million to the athletic department) may not be the best investment decision for the University. Donors tend to stop giving major gifts during recessions, planning, public policy and management professor Renee Irvin said.
Irvin studies how the economy affects non-profit behavior such as charitable donations to university endowments. Smaller gifts don’t tend to drop off in a recession, she said, because those gifts usually come directly out of the donor’s income.
Major gifts, such as Knight’s, do become far less common, Irvin said. Those tend to come from a donor’s assets, their amassed wealth. In the current recession, many people have lost a great deal of their wealth, so huge charitable donations are unlikely to continue for a while.
In spite of Knight’s net worth dropping, there is no evidence he will follow the trend Irvin laid out. He has not followed other donor trends, said Lundquist College of Business Dean Dennis Howard, who has been studying academic versus athletic donations at five large universities.
Typically, athletic donations are smaller, in the thousands of dollars, he said. Huge donations tend to go toward academic uses, such as cancer research centers. Knight’s giant donations of legacy funds to the athletic department are highly unusual. The largest donation in George Washington University’s history was $10 million. In contrast, Thomas Boone Pickens gave $165 million to Oklahoma State University athletics in 2006, but that gift was so highly out-of-the-ordinary that it received national media attention.
What is not unusual is the recipient of Knight’s beneficence. “On most campuses there clearly is a trend toward increased athletic giving,” Howard said. The giving is generally transactional, he said, which means the donor typically receives free parking or better seats.
In Knight’s case, he gets his son’s name on a basketball arena and a commemorative locker in the Autzen locker room, as well as his brand on all of the University’s athletic uniforms, from the football team to the marching band. In short, he receives tremendous publicity.
While Knight’s relationship to the University has proved mutually beneficial, in its article on colleges’ financial pitfalls, The Chronicle warns against reliance upon the generosity of wealthy alums:
“Scores of fancy facilities were built on donors’ pledges. But with the donors’ bank accounts taking a dive, it’s the universities that will pay.”
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