Go Northwest, Young Man
Go Northwest, Young Man
Being the son of a multimillionaire who happens to be a former U.S. Treasury Secretary and Goldman Sachs CEO ought to be easy. When your father's net worth is estimated at more than $700 million, procuring a $16 million loan to finance the purchase of two Portland minor-league sports franchises, the Beavers baseball team and the Timbers soccer club, isn't terribly hard. However, it's a problem if Dad leads a taxpayer bailout of Wall Street just as you're trying to get taxpayer help for a new stadium.
In 2007, Merritt Paulson, now 38, bought the teams and moved to Portland. Before that, the Harvard Business School graduate and son of Hank Paulson worked in New York for a decade: first at HBO, then at the National Basketball Assn., where he helped get its cable channel off the ground and learned about the economics of sports franchises. When the Beavers were put on the block, he primed his parents for a loan. "I'd already spent a lot of time convincing my family that Portland is a big market that doesn't have a lot of activity," says Paulson.
The Timbers are set to join Major League Soccer next year, establishing a natural rivalry with the Seattle Sounders. "This is an unusually good soccer market," says Paulson. "Seattle's team has more season ticket holders than the Mariners—it's arguably a case study of the most successful expansion-team launch in a major league sport." To gain admission into the MLS, Paulson had to get PGE Park, the city-owned stadium where his teams play, renovated to become a full-time soccer complex. His company will pay $8 million in cash and prepay $11.1 million in license and user fees to the city. Portland will kick in $11.9 million. He remains uncertain where the Beavers will play baseball next season.
The transition hasn't been without its glitches. When stadium negotiations got tense, Paulson made a rookie move and fired off an angry e-mail to a reporter—which found its way into print. "How public this job has been is one of the steep learning curves," he says. "I'd never complain about having the last name Paulson. It's just added a unique political dynamic to an already hard job."
The Economics of Owning a Team
Amount Paulson paid to Major League Soccer (MLS) for the Timbers expansion franchise: $35 million
Cost to renovate PGE Park (home of Portland Beavers and Timbers) into an MLS-ready facility: $31 million
Amount to be paid by City of Portland and its taxpayers toward renovation: $11.9 million
Alternate team names suggested for the Portland Beavers after Paulson's purchase: Wet Sox, Green Sox, Thorns, and Sockeyes
Number of New York-Portland red-eye flights Paulson made in early 2007 as he finalized the two-team purchase: 6
Number of stories published in The Oregonian about Paulson since Sept. 3, 2008: 160
Number of public speaking engagements Paulson made during his first year of ownership: 40
Employees at PGE Park: Roughly 35 full-time; 200 part-time staff on game days
Data: Shortstop LLC; Bloomberg Businessweek