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Merritts system

BACK STORY • Timbers and Beavers owner, Merritt Paulson, has big-league ambitions
by: L.E. BASKOW, The former senior director of marketing and business development for NBA Entertainment, Merritt Paulson made the move from New York to Portland when his company, Shortstop LLC, bought the Timbers soccer and Beavers baseball teams last year, making him the teams’ fourth owner since 2001.

He's in the middle of an empty PGE Park. Standing on the new FieldTurf, in dress pants and an open-collared dress shirt.

He's bouncing a soccer ball on his knee for a photographer. Promising, as the camera clicks, that he'll keep it going longer this time.

And then he does, bouncing the ball a dozen or more times on one knee, then the other. Until all the shots are taken.

Then, 35-year-old Merritt Paulson - lean and lanky and looking, well, all of 31 or 32 - moves on to his next bit of work.

Like: Explaining why nine months ago he spent what was reportedly $16 million on two minor league Portland sports franchises. Spent the money on Portland, really.

And the potential of its sports future.

Last May, Paulson announced that his company, Shortstop LLC, had bought the Portland Timbers soccer team and the Triple-A Portland Beavers from a group headed by a Sacramento, Calif., businessman that had owned the teams less than a year. The sale was finalized in June.

Paulson's purchase made him the fourth owner of the teams since 2001.

But his purchase just might give the teams some stability. It definitely has given Portland something it hasn't seen in a while: a real-life hometown sports-team owner.

Paulson - the son of U.S. Treasury Secretary Henry Paulson Jr., who's a minority investor in his son's company - left his job in New York as senior director of marketing and business development for NBA Entertainment to buy the teams.

His wife, Heather, a Harvard Law School graduate, left her job as a New York hedge fund investor and now works for Nike Inc.

They bought a house - their first - in Lake Oswego. Paulson has since spent 12- to 16-hour days at his office at PGE Park, marketing the teams, talking about changes, and about big dreams.

He says he sees him and his wife staying in Portland for quite a while.

'This is not a short-term thing,' he says.

Bevo attendance needs boost

'The teams were moving solidly in the right direction,' he says, sitting in his office suite above the PGE Park field and referring to the ownership group he bought the team from - led by California businessman Abe Alizadeh. 'Now, it's just a question of investing in the long term.'

The teams are hardly without their troubles - the Beavers especially.

Featuring players who are one step away from suiting up for major league baseball's San Diego Padres, the Beavers last year drew fewer than 5,500 fans a game - in the largest market in all of minor league baseball.

It actually was a few hundred per game less than the year before, when the Beavers were ranked 10th out of 16 Pacific Coast League teams in attendance.

Still, so far, more than a few Portland sports watchers seem to like Paulson's attitude. And what he could mean for Portland sports.

'I'm very impressed,' says Lynn Lashbrook, a sports management consultant who led a campaign several years ago to bring major league baseball to Portland. 'What we've never had locally, even with the Blazers, is the resourceful local owner who has a vision. That's always been a vacuum - not having the local ownership and leadership.

'We're starting over with the piece that was missing all along.'

Marketing made a mission

Paulson seems to agree - at least about what local and involved ownership can mean for the Beavers and Timbers.

'The Beavers and Timbers … this is one of the best markets there is,' he says. But the teams need to be marketed better, he says. They need to sell season tickets in a more creative way, giving season ticket holders a chance to take batting practice with the Beavers, for instance, or scrimmage with the Timbers.

And both teams need to be more involved in the community.

'A lot of it is just about doing the right things in the community - sports ownership fundamentals,' Paulson says. 'It's not rocket science.'

Paulson's purchase - with the assumed resources of his company, and his relatively young age - has spurred people to talk about bigger things for Portland as well.

It's a conversation that Paulson sometimes participates in.

Some wonder whether he might someday play a part in bringing major league baseball to Portland, for instance.

Paulson doesn't reject the idea entirely, but does say Portland is not yet ready for the big leagues - not in terms of the amount of built-in revenue a major league owner needs to get from a community's large corporations.

'Could I be interested, in the right time and the right place for the opportunity? Sure,' Paulson says.

But, he says, 'major league baseball needs a lot more private sector support than currently exists (in Portland). It needs to have a bigger corporate presence. It's not about population. It's about what type of business infrastructure (a city has). The costs associated with major league baseball … are just radically different.'

Soccer's a different story

Paulson is more immediately enthusiastic about bringing Portland into the major leagues in another area - Major League Soccer.

The Timbers are in the First Division of the United Soccer League, one rung below the top professional soccer league - Major League Soccer, which has West Coast franchises in places such as Los Angeles; San Jose, Calif.; and Salt Lake City.

While Portland just lost out to Seattle for a recent MLS expansion site, MLS officials have indicated there will be other expansion franchises likely granted for 2011 or 2012. Portland could be a top contender for one of them.

Paulson is enthusiastically pursuing owning that team, and having it play in PGE Park.

'This is a unique soccer market, pure and simple,' Paulson says. 'Arguably among the very best soccer markets in the United States.'

That's evident not only in how the Timbers draw - they averaged more than 6,800 fans per game in their 14 home games last year, including almost 16,000 in their last regular season game against Charleston - but also in other intangibles, like the health of youth leagues throughout the metropolitan area, Paulson says.

'There are MLS teams that exist today that would die to have the Portland soccer market,' he says.

Paulson says he believes MLS 'would be terrific in Portland. The league is white-hot. I think it would be one of the most successful franchises in the league. But the city is going to need to want it.'

This is where Paulson - in all his youthful unconventionality - can begin to sound like every other sports franchise owner.

Bringing Major League Soccer to Portland would require some significant renovation to city-owned PGE Park.

And eventually, within three to five years, Paulson figures, MLS would want the franchise to no longer share the stadium with a baseball team - meaning the Beavers would need a new stadium. Both ideas would require public money, Paulson says.

Turf upgrade helps a lot

Paulson declines to be specific about what he would ask in public help for any renovation of PGE Park. He says he is working on an economic impact and costs plan right now that he hopes to present to city officials in the next few months.

But, he says, 'there's no way we could do it without having support from the public side.'

John Doussard, a spokesman for Mayor Tom Potter, says Paulson has yet to talk to the mayor's office about the issue and declined to comment. 'We'll wait to see what he's got in mind,' he says.

One of the more noticeable changes to PGE Park since Paulson arrived - pushed by Paulson but paid for by the city, because the city is responsible for all capital improvements - is the new FieldTurf, installed in January and February.

The turf replaces the former NeXturf, installed during the PGE Park renovation completed in 2001. NeXturf company officials said in 2001 the turf might last 10 or 12 years; city officials now say the expected as little as seven. But the turf badly needed to be replaced, Paulson says.

FieldTurf is used at many college and National Football League stadiums; several major league baseball stadiums; and soccer fields. The installation cost the city about $1 million, according to David Logsdon, spectator facilities manager for the city.

It was an important change for the Timbers, because of the hardness and age of the old turf, coach Gavin Wilkinson says. 'It was very hard to bring players in (with) the old surface,' says Wilkinson, who compliments Paulson on other improvements he's made with the stadium and with the team.

'Everything he came in and said he would do, he did,' Wilkinson says.

Among the player-related stadium changes, Paulson's company has renovated the players' locker rooms, added leather couches, and updated their training equipment. Paulson also has updated the luxury suites at the stadium with carpet and flat-screen televisions.

Paulson's company had a hand in bringing the 2009 Triple-A All-Star game to Portland. And his company brought a U.S. Women's soccer team exhibition to PGE Park last fall, and three Oregon State Beavers baseball games to the stadium a few weeks ago.

Paulson also arranged a Beavers-Timbers television package in which FSN will televise 20 Beavers games and five Timbers games this year.

Owners don't own; fans do

One Paulson initiative was less successful. He offered fans an opportunity to rename the Beavers, believing that the team was too easily confused with the Oregon State baseball team. But fan response was overwhelmingly in favor of keeping the name.

Which underlines what Paulson says is one of his beliefs about sports team ownership: 'Any sports owner, first and foremost, has to understand you can be an owner from a legal standpoint, but you never truly own the team. The community owns the team. And I'm not sure every owner, from every level of sports, gets that.'

At least one Timbers fan believes Paulson does get it - and says that's a significant change from previous Timbers owners.

'I've actually seen him in the (Timber Army fan) section, raising the flag after a goal,' says Allison Andrews, who operates a Timbers fan Web site that is independent of the team. 'He deliberately throws himself into it. That's a big deal to us. He's one of us now.'

More community links sought

Paulson says he hopes both teams can be more involved in the community - both in terms of players participating in more events and interactions, and in the teams financially supporting more local charities and other community projects.

He has created a Beavers and Timbers community fund and says, 'We're going to be, in very short order, giving away more money through direct donations to the community than any team in Triple-A baseball.'

As for the Beavers' mediocre attendance figures, Pacific Coast League President Branch Rickey III says league executives and other owners understand that PGE Park's age - even with its renovation - and the difficulty of finding easy parking around it means 'you don't expect to be able to bring to Portland the kind of success that Pacific Coast League baseball is realizing elsewhere.'

Still, Paulson says, 'I think we're going to see growth.'

Rickey says it took league executives only about five minutes after they met Paulson to forget about his relative youth. When they considered his academic background - he has a master's degree in business administration from Harvard -'and combine it with the positions he's had in the NBA, and then combine that with his ability to articulate his commitment and his ambition, and his dedication and zeal - you've got a pretty compelling package,' Rickey says.

'He's a terrific reflection on our sport, and he will distinguish himself in Portland for exactly that.'

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PGE debt, rent back on track

Several years after former owners of the Portland Beavers and Timbers stopped paying their rent to the city of Portland for PGE Park - after getting $2 million behind in rent payments - the city doesn't appear to be losing money on the stadium anymore.

With quite a bit of help from a special hotel and rental car tax.

Currently, the city needs a bit more than $3 million a year to make its debt payments on bonds it issued to renovate PGE Park in 2000. The city paid about $33 million of the $38.5 million in renovation costs.

Part of the money generated from a local hotel and rental car tax generates about $2 million a year for the debt payments.

And the current owner of the Beavers and Timbers now is paying about $1.1 million a year to provide the rest of the money needed for debt payments, said David Logsdon, spectator facilities manager for the city of Portland.

'We're kind of at a break-even point at PGE Park, except for the capital improvements,' Logsdon said.

The city, which owns PGE Park, is responsible for all capital improvements - including, for instance, the recent $1 million it cost to replace the artificial turf at the stadium.

The current owner of the Beavers and Timbers, a group led by Merritt Paulson, pays an $800,000 'license fee' to use the stadium this year. The city gets another $200,000 to $300,000 per year from ticket sales at PGE Park - a fixed amount for most Beavers and Timbers games and a percentage of sales for other events.

The city still is in the red on stadium rent - because of the financial problems of the first post-renovation owners of the Beavers and Timbers, a now-defunct group called Portland Family Entertainment.

The city set a goal of recovering $800,000 of its $2 million loss from PFE in subsequent contracts with Beavers and Timbers owners. So far, the city has recovered $383,000 of that.

- Todd Murphy