Portland Trail Blazers COO Sarah Mensah Reacts To Forbes Valuation

Earlier this week, I noted the Portland Trail Blazers' annual valuation report from Forbes, which appeared about as rosy as this type of financial report gets. According to the magazine, the Blazers increased their team value by roughly $18 million since the 2009 valuation and posted decade-best numbers in operating income and revenue while also posting a decade-low in player expenses.

Given that the Blazers are an organization that sends out press releases when its players donate large quantities of dog food, for example, it was more than a little surprising not to hear a single word from One Center Court regarding the astounding progress the financial report seemed to represent. Shouldn't this be a pretty big deal?

On Thursday, I checked in with Blazers COO Sarah Mensah, who said that while the Forbes numbers are "estimations" and that the team "generally hasn't commented" on the valuations, they are accurate enough to warrant some discussion. Mensah also wanted to make it clear that the numbers are already outdated, as they reflect last year's numbers rather than the current state of the franchise. You might have heard: It's been a tough fall. Brandon Roy is out indefinitely, Greg Oden had season-ending microfracture surgery and the Blazers are no longer the hottest ticket around or the team poised to contend for a championship like they appeared last year.

So the message from Mensah wasn't about throwing a party like you might expect a corporation to do when it has a strong quarterly earnings report. Instead, it was more reflective of an ongoing commitment to making prudent and smart financial decisions on and off the court. 

Perhaps there's no better measure of the organization's development than revenue, which Forbes reported increased for the fifth year in a row in 2010. Since 2006, the revenue figure has jumped from $77 million to $127 million, steadily increasing each year. That growth, Mensah said, is part of a "very positive story, one where the things that are done on the court, starting with hiring Nate [McMillan] as the right coach. Making some really smart choices in the draft. Getting players like LaMarcus [Aldridge] and Brandon [Roy], having Brandon turn into a 3-time All-Star and Rookie of the Year. The ping pong balls helped out on court.

"That helped the franchise build some on-court momentum and at the same time there were some really strategic things being down off the court as well. Things like working on our staff, making sure that our staff was one of the best-trained, most-proficient in use of CRM (Customer Relationship Management). All of those things came together over time and at the right time. That helped us be in the right position when the right on-the-court moves were happening to be able to take advantage of it." 

The 2010 valuation period also reflected a time in which Portland had perhaps its most favorable salary cap situation in recent memory, as Roy and Aldridge were still on their rookie deals and the last of the truly heinous contracts had been scuttled. Effective salary cap management is at the top of Mensah's list of financial goals for the franchise and at the top of the list of explanations for the Forbes figures as well. "No question that cap management is really tricky, it's difficult, it's not for the faint of heart. It's a very, very important part of running your business and running your business right. I think the team has put a lot of focus and effort into doing that, when you build through the draft it's easier to have a good cap because of rookie contracts." 

Mensah also pointed to the team's merchandise sales and in-arena food and beverage sales as important drivers of growth but said that "by far the largest pie in any team's revenue development comes from the sale of tickets and suites followed closely behind our broadcast or sponsorship revenue." Both ticket sales and sponsorship revenue were tabbed as "huge growth areas" boasting "really great momentum."

"Every year is different, every year is a new page," Mensah said. "Every year has a new set of challenges. We signed Camby, we brought on Wes Matthews, prior to that the signing of Brandon and LaMarcus, those are all significant investments that Mr. Allen has made to this team."