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Donald Trump: a brand in danger or a daring re-invention? Donald Trump: a brand in danger or a daring re-invention?
(35 minutes later)
Donald Trump has very clear views as to his net worth. Unsurprisingly. So clear, in fact, that when the Republican presidential candidate issued a press release trumpeting the fact that he had filed his personal financial disclosure forms with the Federal Election Commission, he put his estimated total net worth in block capital letters: “TEN BILLION DOLLARS.” Donald Trump has very clear views as to his net worth. Unsurprisingly. So clear, in fact, that when the Republican presidential candidate issued a press release trumpeting the fact that he had filed his personal financial disclosure forms with the Federal Election Commission, he put his estimated total net worth in block capital letters: “TEN BILLION DOLLARS”.
The FEC released Trump’s forms on Wednesday, giving us the clearest insight yet into the man’s wealth. Although his team warned the forms were “not designed for a man of Mr. Trump’s massive wealth”. The FEC released Trump’s forms on Wednesday, giving us the clearest insight yet into the man’s wealth – although his team warned the forms were “not designed for a man of Mr Trump’s massive wealth”.
Interestingly the snap shot already needs updating. The reality show and real estate billionaire’s vitriolic presidential campaign has so far cost him business deals. His candidacy raises some intriguing questions about the value of someone’s “personal brand” – and about the difference between their net worth and their income. Interestingly the snapshot already needs updating. The reality show and real estate billionaire’s vitriolic presidential campaign has so far cost him business deals. His candidacy raises some intriguing questions about the value of someone’s “personal brand” – and about the difference between their net worth and their income.
Even if we accept Trump’s estimate of what he is worth (and I’ll come back to that in a minute), there’s the question of his income. It’s still gargantuan by the standards of most Americans: $362m in 2014, according to the press release, not including dividends payments or interest that he earns on his investments, capital gains on any properties or investments that he sells or rents, and royalties.Even if we accept Trump’s estimate of what he is worth (and I’ll come back to that in a minute), there’s the question of his income. It’s still gargantuan by the standards of most Americans: $362m in 2014, according to the press release, not including dividends payments or interest that he earns on his investments, capital gains on any properties or investments that he sells or rents, and royalties.
The problem? The way that Trump has waged his presidential campaign is likely to send that income into a tailspin.The problem? The way that Trump has waged his presidential campaign is likely to send that income into a tailspin.
Related: John McCain: Trump's 'offensive' comment merits apology to military familiesRelated: John McCain: Trump's 'offensive' comment merits apology to military families
One after another, the companies that once lined up to get Trump to endorse everything from clothing lines to mattresses are pulling back, viewing his seal of approval on their products or services as anything but a positive factor in the wake of his rabble-rousing.One after another, the companies that once lined up to get Trump to endorse everything from clothing lines to mattresses are pulling back, viewing his seal of approval on their products or services as anything but a positive factor in the wake of his rabble-rousing.
Why would NBC continue to fork over an estimated $250,000 per episode to Trump to host The Celebrity Apprentice, knowing that advertisers view him as toxic? Trump has stated – repeatedly – that he believes Mexican immigrants are “bringing drugs” and “bringing crime”; that some “are rapists” and murderers. His diatribes have left many within the ranks of his own party – not always known for their warm, fuzzy attitudes toward immigrants – aghast. Why would NBC continue to fork over an estimated $250,000 per episode to Trump to host The Celebrity Apprentice, knowing that advertisers view him as toxic? Trump has stated – repeatedly – that he believes Mexican immigrants are “bringing drugs” and “bringing crime”; that some are “rapists and murderers”. His diatribes have left many within the ranks of his own party – not always known for their warm, fuzzy attitudes toward immigrants – aghast.
Understandably, Univision, the giant Spanish-language broadcasting network in the US, promptly announced it wouldn’t carry any of Trump’s content going forward, including the Miss USA and Miss Universe pageants. (NBC won’t air those, either.) Trump previously pegged a value of $14.8m on those pageants, jointly owned with NBCUniversal, but what are they worth if there’s no place to air them in some of the largest advertising markets? Will independent cable network REELZ be able to pay Trump nearly as much as he would have earned from Comcast and NBC for airing Miss USA, especially since some judges and contestants have announced their intention of dropping out? Understandably, Univision, the giant Spanish-language broadcasting network in the United States, promptly announced it wouldn’t carry any of Trump’s content going forward, including the Miss USA and Miss Universe pageants. (NBC won’t air those, either.) Trump previously pegged a value of $14.8m on those pageants, jointly owned with NBCUniversal, but what are they worth if there’s no place to air them in some of the largest advertising markets? Will independent cable network Reelz be able to pay Trump nearly as much as he would have earned from Comcast and NBC for airing Miss USA, especially since some judges and contestants have announced their intention of dropping out?
And so it goes, drip, drip, drip, drip: a few million dollars here, a few million dollars there.And so it goes, drip, drip, drip, drip: a few million dollars here, a few million dollars there.
And it adds up. One media outlet estimated that Trump’s income has fallen by $50m. Forbes, meanwhile, has long disputed Trump’s own calculation of his net worth, pegging it at closer to $4.1bn. The difference? The value of the Trump brand. Trump himself reckons that this is $3.3bn; Forbes has calculated it to be a mere $125 million. Until, that is, Trump decided to be his abrasive self in his campaign, after which Forbes wrote down the value of that brand to precisely zero. And it adds up. One media outlet estimated that Trump’s income has fallen by $50m. Forbes, meanwhile, has long disputed Trump’s own calculation of his net worth, pegging it at closer to $4.1bn. The difference? The value of the Trump brand. Trump himself reckons that this is $3.3bn; Forbes has calculated it to be a mere $125m. Until, that is, Trump decided to be his abrasive self in his campaign, after which Forbes wrote down the value of that brand to precisely zero.
And that was before the presidential candidate decided to deride his predecessor as a presidential candidate, a longtime bastion of the Senate, Arizona Republican John McCain. “He’s not a war hero” just because he was a prisoner of war, Trump told a gathering in Iowa last weekend. “I like people who weren’t captured.”And that was before the presidential candidate decided to deride his predecessor as a presidential candidate, a longtime bastion of the Senate, Arizona Republican John McCain. “He’s not a war hero” just because he was a prisoner of war, Trump told a gathering in Iowa last weekend. “I like people who weren’t captured.”
But in both politics and finance, Trump appears to be playing a long game.But in both politics and finance, Trump appears to be playing a long game.
Related: Trump remains in poll position despite comments on John McCain's serviceRelated: Trump remains in poll position despite comments on John McCain's service
Advertisers and specific groups may not like what he says, but his inflammatory comments about Hispanic immigrants clearly resonated with some American voters – or at least didn’t offend them enough to drown out the rest of his message. In a Washington Post/ABC News poll taken largely before his comments about McCain hit the headlines, Trump had taken over the lead in the Republican presidential race, with support of 24% of respondents – nearly twice as much as the next candidate.Advertisers and specific groups may not like what he says, but his inflammatory comments about Hispanic immigrants clearly resonated with some American voters – or at least didn’t offend them enough to drown out the rest of his message. In a Washington Post/ABC News poll taken largely before his comments about McCain hit the headlines, Trump had taken over the lead in the Republican presidential race, with support of 24% of respondents – nearly twice as much as the next candidate.
And while Trump’s income may be falling precipitously, by any standards, he’s the most affluent American ever to seek a presidential nomination. Since he’s financing his own campaign, he doesn’t need to worry about his ability to attract donors any more than he seems anxious about his ability to retain business sponsors. And while Trump’s income may be falling precipitously, by any standard he’s the most affluent American ever to seek a presidential nomination. Since he’s financing his own campaign, he doesn’t need to worry about his ability to attract donors any more than he seems anxious about his ability to retain business sponsors.
Other celebrities have recovered from dents to their brand value. Consider Martha Stewart, who at the height of her fame as a domestic diva served prison time for charges related to insider trading. Viacom dumped her television show, just as it has severed its relationship with Trump. She had to resign from the board of the company named after her and fork over nearly $200,000 in fines and penalties to regulators. After her release, Stewart promptly went back to work and restored some of the luster to her brand. But the changes to the media landscape finally took their toll on the business, which she sold to Sequential Brands last month – for a 20% premium over recent values, but at a fraction of its peak value.Other celebrities have recovered from dents to their brand value. Consider Martha Stewart, who at the height of her fame as a domestic diva served prison time for charges related to insider trading. Viacom dumped her television show, just as it has severed its relationship with Trump. She had to resign from the board of the company named after her and fork over nearly $200,000 in fines and penalties to regulators. After her release, Stewart promptly went back to work and restored some of the luster to her brand. But the changes to the media landscape finally took their toll on the business, which she sold to Sequential Brands last month – for a 20% premium over recent values, but at a fraction of its peak value.
Trump’s income is already damaged; his brand, too. Trump’s net worth is another matter. While the Forbes estimate is almost certainly closer to the truth than the TEN BILLION DOLLARS proclaimed by Trump himself – given that his net worth is made up of assets that can’t be readily sold, and whose value depends on what a market specialist thinks they could fetch – many of those assets are in premium locales. Some high-end tenants may not want to be in buildings with “Trump” on the outside any more, but those buildings continue to occupy premium locations, on New York’s Fifth Avenue, for instance, or Columbus Circle. In real estate, location dictates value – and thus Trump’s net worth. Trump’s income is already damaged; his brand, too. Trump’s net worth is another matter. While the Forbes estimate is almost certainly closer to the truth than the TEN BILLION DOLLARS proclaimed by Trump himself – given that his net worth is made up of assets that can’t be readily sold, and whose value depends on what a market specialist thinks they could fetch – many of those assets are in premium locales. Some high-end tenants may not want to be in buildings with “Trump” on the outside anymore, but those buildings continue to occupy premium locations, on New York’s Fifth Avenue, for instance, or Columbus Circle. In real estate, location dictates value – and thus Trump’s net worth.
In the process of damaging his business brand, however, Trump is building a new and entirely different brand for himself – a political brand. It’s one that can’t be monetized in any kind of conventional way, and indeed may cost him money, but that seems to matter less and less to Trump. The remaining question is whether there are enough voters out there who share his views to result in his political brand becoming more closely aligned with that of the country as a whole.In the process of damaging his business brand, however, Trump is building a new and entirely different brand for himself – a political brand. It’s one that can’t be monetized in any kind of conventional way, and indeed may cost him money, but that seems to matter less and less to Trump. The remaining question is whether there are enough voters out there who share his views to result in his political brand becoming more closely aligned with that of the country as a whole.
That’s something that could be costly in an entirely different way.That’s something that could be costly in an entirely different way.