In the last days of his presidency, business partners and supporters distance themselves from Donald Trump. This could put his company in serious trouble.
With the end of his presidency, Donald Trump is facing a huge challenge: He has to look after his corporate network. The situation there is currently unpleasant. Business is not going well, loans in the millions have to be paid back, legal trouble looms – and companies and Republican politicians are distancing themselves from Trump after he made a significant contribution to the storming of the Capitol in Washington.
The "Trump" brand is – to put it mildly – damaged. And at the moment it looks as if she will not be able to fully recover from the presidency and, above all, from its inglorious end. In addition, by banning Twitter, Facebook, Youtube and other platforms, Trump has lost his humming online shop: He lacks the opportunity to advertise free of charge and with a huge range not only for himself, but also for his hotels and golf courses.
The Trump Organization's business model is based on one thing: the name Trump. It stands for a flaunted, golden, glittering luxury for a clientele who wants to adorn themselves with this image. In addition to his hotels and golf courses, Trump is betting on licensing his name. He makes this brand available for the projects of others and collects license fees for it. In addition, Trump spreads the image of a very successful man. At the latest with the defeat in the presidential elections and the start of the second impeachment proceedings, this has been significantly damaged.
In the future, Trump will therefore find it more difficult to maintain his business model. This is not only due to the fact that his brand has lost its glamor – and thus its value. Rather, even long-standing business partners, such as Deutsche Bank, are turning away from him.
Loans are due
The bank's move is likely to be particularly annoying for Trump, as it had lent Trump money when other large institutions had long since turned away from him. In addition, by 2023, according to reports, Trump loans in the amount of more than 300 million will be due at Deutsche Bank alone – loans for which the incumbent US president is largely personally liable.
According to the "Financial Times", however, this is only part of the credit. Overall, the Trump Organization is therefore in the chalk with 1.1 billion dollars. Of this, $ 900 million would have to be repaid over the next four years.
On paper this is no danger for Trump: his debts are compared to a net worth that "Forbes" estimates at around 2.5 billion dollars. But it is completely unclear how much Trump's fortune actually is. It's also found in real estate and golf courses that are used to secure the loans. So the crucial question is how much money Trump can make in cash if necessary.
In view of Corona, the market for office real estate is ailing. And Trump's golf courses and hotels are also suffering. Even before the outbreak of the pandemic, they had posted losses year after year – including his hotel in Washington and his largest golf resort near Miami.
Some of his projects have already flopped. Including three casinos in Atlantic City and the Plaza Hotel in New York. Other projects only survived because they were either sold or creditors came to meet Trump and canceled some of the debt because they would have cost more money to go bust.
His resurrection came through the popular reality show "The Apprentice", in which he was the main character from 2004 to 2015 and portrayed a highly successful businessman. It brought him into the spotlight and made him a lot of money, the New York Times put his income at more than $ 400 million. When the show ended, Trump ran for the Republican presidential nomination – and then the completely unexpected happened: he became not only a candidate, but even president. The Trump brand was suddenly more valuable than ever before. But those times are over since the election defeat, next week Joe Biden will take the oath of office and Trump will become a private citizen again.
Impeachment proceedings started
In addition to the business challenges, Trump faces other problems: He is arguing with the IRS, which could enforce a tax refund of more than $ 70 million. There is also a threat of legal trouble as the Manhattan attorney's office is investigating the Trump Organization on suspicion of white-collar crime and tax evasion.
However, none of this changes the fact that Trump still has opportunities to get money. Millions of Americans have voted for him and still stand by him – many of them unconditionally. Trump has already proven that he can also benefit financially from this support. With his appeal for donations to go to court against alleged election fraud, he has raised more than $ 200 million. The lion's share of the money is still there and can also be used by Trump to pay off debt. In addition, Trump is still popular not only with many Americans, but also elsewhere – for example in Brazil, Israel, India and Saudi Arabia. There are certainly business opportunities there after the end of his term of office.
"No political figure has ever gathered as much energy and support as my father," said Eric Trump. "There will be no shortage of opportunities in real estate and beyond." It is speculated that Trump is building a media platform to offer his followers paid content.
In fact, Trump has proven in the past that he can reinvent himself and monetize his name. But it is open to what extent he will succeed again. It will depend on whether his fans remain loyal and what influence Trump will have in the Republican Party in the future.
The challenge is great: the second impeachment process has begun. Trump is also extremely unpopular in much of the United States. Atlantic City is auctioning the possibility of blowing up a former casino belonging to the outgoing US president at the end of January.