Gift of stock dips in value
Officials not concerned over depreciation

By Alisha Brown
Staff Reporter

Although a $5.23-million gift in shares of stock in the Hispanic Television Network from Board of Trustees member James A. Ryffel depreciated to $287,480 in a year, TCU officials said they are not worried about the donor’s $6-million commitment over time.Ryffel made the donation last year when the company’s value was at $1 billion. At that time, Ryffel donated 400,000 shares worth $5.23 million, said Bronson Davis, vice chancellor for university advancement.

The gift was to be part of an overall pledge to the university for $5 million to an entrepreneurial program and another $1 million in venture capital. The entrepreneurial program was later named for Ryffel.

Ryffel couldn’t be reached for comment Monday about the gift or his pledge to the university.

Davis said, as university policy, any gift in shares of stock goes toward the university’s endowment. Stocks are sold as soon as possible to ensure that the value closest to the actual gift can be maintained.

“What it would sell for on the day the gift was made is what we would try to sell it at,” Davis said.

But because Ryffel is the founder and one of the principle owners of HTVN, his shares can’t be sold for a year, according to the Security Exchanges Commission.

“When Ryffel decided to take on a strategic partner (in HTVN) he wanted to give away some of his shares to the university so the two wouldn’t have different opinions on what to do with the stock,” Davis said.

Therefore TCU, as the unregistered owner of the stock, also couldn’t sell the shares for that year, Davis said.

Ryffel donated the 400,000 shares on June 5, but the university already owned 17,000 shares not included in that donation. On Jan. 31 TCU completed the sale of those shares at $11,737.98, or 69 cents a share. The value of the remaining 400,000 shares at closing prices Monday would be estimate at $140,000 at 35 cents a share.

University Treasurer Richard Hoban said TCU now plans to sell the remaining stock over the next few months in hopes of regaining the value of the gift.

Davis said the money doesn’t affect the budget for this year, because Ryffel’s pledge will go into the endowment and will be spread out over five years.

However, since Ryffel’s company has already lost millions, his ability to pay the full pledge could influence the progress of the entrepreneurial program and overall reputation of the business school.

Recently the M.J. Neeley School of Business was ranked by the U.S. News and World Report behind tier one expectations. Chuck Williams, associate dean for undergraduate studies, in previous Skiff reports said the rankings — behind comparable schools such as Southern Methodist University, Baylor University and Rice University — could go up with increased visibility from the new dean, Bob Lusch, the James A. Ryffel Entrepreneurial Program and the construction of the Steve and Sarah Smith Entrepreneurial Center, set to break ground May1.

The Commission on the Future of TCU identified increasing the rank of the business school as a top priority to move the university to the next level of academic distinction, Williams said.

Ronald Smith, chairman of the Commission’s business school task force, said in previous Skiff articles that the quality of students and faculty can determine the success of the program.

“To attract the best students we must have building endowments and the best faculty,” he said. “To attract the best faculty, we have to pay them competitive salaries.”

Smith said increased salaries for faculty members would come from endowments — where Ryffel’s donation is said to be going.

Chancellor Michael Ferrari said Ryffel is very committed to the entrepreneurial program, and he doesn’t foresee any problems in Ryffel’s financial stability.

“He is an entrepreneur,” Ferrari said. “This is part of his business. … I don’t doubt in the least his long-term commitment to the university in service or donations.”

Alisha Brown
a.k.brown2@student.tcu.edu