Trump Won’t Win, but How Much Could He Lose? (Craig Douglass On Consumers)

Craig Douglass

Donald Trump. Man or myth? Well, 69-year-old Donald John Trump is certainly a living, breathing, human male — a man. But there has also been cultivated over time a mythical-like aura associated with the Trump name. Or, more importantly, the Trump brand name.

What does the Trump brand stand for? What is its worth, its value?

To consumers, there is a difference between worth and value. Worth is mostly associated with cost, while value is synonymous with importance, benefit and usefulness. We suppose one would have to calculate the worth of the Trump brand by comparing the retail cost of Trump-branded items — dress shirts, ties, greens fees, hotel room rates and office space leases — with competitors in the same categories. Their value, though, is derived from the brand name’s importance to the purchaser’s desire to be associated with the name and its perceived character.

The Trump presidential boomlet is being fueled by a combination of curiosity, a gusting wind of summer-doldrums media attention and hard-right accord with public statements about opinions some of this ilk have thought but dared not say. Since many believe, at their core, the opinions espoused by Mr. Trump are passing outrageous and based on emotional conjecture rather than verity, political talking heads mostly agree the rubber-necking will end once “The Donald” is challenged on policy positions, founded in fact. The upcoming Fox News debates may expose as much. Or it may add fuel to the fire. We’ll see.

One thing is sure, the Trump business brand is suffering from all this political bluster. But how do we monetize the impact?

Earlier this year, Forbes magazine estimated Trump’s net worth at $4.1 billion. Business Insider, the news website, in 2014 published a Trump-supplied financial statement showing $8.7 billion in net worth. The same $8.7 billion figure was part of Trump’s announcement for president, a June 16 media extravaganza at Trump Tower in Manhattan. Regarding annual earnings, The New York Times reported that Trump’s late-July Federal Election Commission filing indicated the mogul earned $9.5 million last year in royalties associated with his name. And there is the real exposure: his name.

The FEC filing also states that Donald Trump has “involvement” in 515 business entities, with 264 of them branded with his name or his initials. In the 2014 report provided to Business Insider, of the $8.7 billion in net worth, $3.3 billion of that amount was “represented by real estate licensing deals, brand and branded development.” That means applying the Trump name to the deals and developments, purportedly increasing their value. So Trump himself values his name — his brand — at $3.3 billion. And today that value, that character and quality, is at risk, to wit:

• NBCUniversal has removed Trump from the very successful, 15-year-running “The Apprentice” television franchise. NBC also canceled this year’s broadcast of the Trump-owned Miss USA and Miss Universe Pageants. (Trump owns 50 percent of the pageants with NBC and Univision, which also canceled Spanish-language broadcasts of the events.)

• Macy’s Department Stores removed Trump-branded merchandise from its retail and online operations. Bricks-and-mortar-wise, that’s 850 stores in 45 states, Washington, Guam and Puerto Rico, under the names Macy’s and Bloomingdales.

• The PGA golf organization has relocated the Grand Slam of Golf from Trump National-Los Angeles, while ESPN has moved the ESPY Celebrity Golf Classic from the same Trump National golf course. And Nascar will no longer use the Trump National Doral-Miami for its official awards banquets.

All in all, it is estimated that Trump has so far lost over $78 million in fees, licensing and general income since his June comments about the permeability of the nation’s southern border and the rectitude of Mexican immigrants.

While the presidential campaign (of sorts) may, in the end, increase the saliency of the Trump brand and its conspicuousness, we are not at all sure if consumers will want to continue endorsing the name and associating themselves with the changing Trump brand by buying merchandise or paying fees. Brands are built over time, but can be demolished overnight.

Trump has put his mouth where his money is, and it’s costing him.

Craig Douglass is a Little Rock-based advertising agency owner and marketing and research consultant. Email him at Craig@CraigDouglass.com.