The ‘Midas of business’ is now hanging on by the tips of his fingers
With his brand in tatters, Donald Trump’s return to corporate life looks increasingly difficult
DONALD TRUMP’S reputation as a businessman was built on his belief he had the Midas touch.
He turned everything to gold: from the taps and sinks at his Taj Mahal casino in Atlantic City to the bottles in which he sold Trump Vodka.
There was the odd financial hiccup – such as filing for corporate bankruptcy four times. But for millions of Americans who watched The Apprentice and propelled him into the White House, his image was one of financial success.
But recent events have turned the Trump brand toxic, making the outgoing president’s return to corporate life more difficult.
“The big question is what damage the Trump political brand will do to the Trump business brand,” said Stephen Greyser, a professor of marketing at Harvard Business School and an expert on reputation management.
Mr Greyser said there was “no doubt” that what had happened in recent weeks, with Mr Trump becoming the first president to be impeached twice, “would have an impact”.
It raises the possibility Mr Trump may leave the White House poorer than when he entered – a feat not matched by any of his recent predecessors, who have gone on to earn millions from after-dinner speaking and book deals.
Rejected by voters, Mr Trump is free to take over the Trump Organisation, a family business with around 500 companies, which has been run by his sons, Eric Trump and Donald Trump Jr.
However, he faces a mountain of debt, which, according to an analysis of his tax returns by The New York Times, totals $421 million (£309 million) – mostly due within the next four years.
His organisation has a massive portfolio of hotels, golf courses, and apartment blocks, which could be sold off.
That may well prove tempting, with even Mr Trump claiming that the presidency has cost him and his businesses between $3billion and $5billion.
The Covid-19 epidemic hit his hotels business badly. Last month, executives at the Manhattan hotel operated by the Trump organisation admitted that last summer’s brief recovery had ground to a halt with the new coronavirus surge.
“The hotels and golf courses are performing badly and they have been performing badly for some time,” said Phillip Braun, a professor of finance at the Kellogg School of Management.
With a likely blizzard of court cases linked to his tax and business affairs, Mr Trump’s return to civilian life was certain to be difficult. But these problems paled into insignificance after a pro-Trump mob stormed the US Capitol in Washington DC in an attempt to overturn Joe Biden’s election victory.
Officials at Deutsche Bank told Bloomberg that it would halt doing further business with Mr Trump and his family beyond overseeing the repayment of $300million in earlier loans.
Then Signature Bank, which called on Mr Trump to resign, said it was closing his personal accounts and also refusing to do business with any members of Congress who voted to overturn the presidential election result.
Florida-based Professional Bank, which once provided Mr Trump with an $11million mortgage, said it would cease doing business with his organisation. Things got worse. The PGA of America voted to strip Mr Trump’s golf course in Bedminster, New Jersey, of a blueriband tournament next year.
In Britain, the R&A golf club announced that the British Open would not be staged at Turnberry as long as the course was owned by Mr Trump.
“The one thing [the PGA] and their sponsors don’t want is continuing controversy,” Prof Greyser said.
Just to add to Mr Trump’s woes, his attempt to offload the lease on his 263room Washington DC hotel is going nowhere, with the organisation unable to find anyone willing to stump up $500million reported asking price.
And even his native New York is looking to sever business ties, with the city council examining ending his organisation’s contracts to operate two skating rinks, a carousel and a golf course.
None of this will stop Mr Trump pursuing new ventures, with speculation rife he will launch a media company.
Rich Greenfield, a Wall Street media analyst, said Mr Trump would not have trouble attracting subscribers, as there was “a large group of consumers willing to support Trump after he leaves office”.
But even that could be awkward if big tech companies, such as Amazon Web Services, follow Twitter’s example and decline to give him a platform.
And he has to raise the capital.
It all bodes badly for Mr Trump, according to Prof Braun. “There will be a lot of lawsuits and he is going to find it hard to raise credit,” he said. “He is going to face a financial crunch.”