How Donald Trump Made Millions As Partners Ditched His Brand

Forbes

The Trump name doesn’t mean what it once did. But when hotels dropped the brand, the former president got hefty payouts anyway. Forbes money in politics reporter Kyle Khan-Mullins joins "Forbes Talks" to discuss.   Read the full story on Forbes: https://www.forbes.com/sites/kylemullins/2024/09/30/how-trump-made-millions-as-partners-ditched-his-brand/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Hi, everybody. I'm Brittany Lewis, a reporter here at Forbes. Joining me now is my Forbes

00:07colleague, money and politics reporter, Kyle Kahn Mullins. Kyle, thanks so much for joining

00:11me. Always great to be here, Brittany. Thanks for having me. You have some interesting reporting

00:17on former President Donald Trump and his finances. You're reporting how Trump made millions as

00:23partners ditched his brand. So you set the scene at the start of your Forbes piece the

00:28summer of 2017 out front of a Trump Manhattan property. Take us there.

00:35Yep. So summer 2017, you might be thinking this is one of Trump's properties in Midtown

00:42Manhattan, his famous Trump Tower, one of his big hotels. This is another one of his

00:46hotels. He used to own a hotel called Trump Soho down in down in the Soho neighborhood

00:50of Manhattan. And at this hotel, a group of protesters dressed up in Russian army uniforms

00:57played the Russian national anthem, flew a Russian national flag and projected an image

01:02of Vladimir Putin on the side of the hotel, giving a thumbs up and saying, happy to help,

01:07bro. This was a reference to the alleged help that the Russian government gave Donald Trump

01:13in getting elected in 2016. This was a kind of a poke, trying to poke him, trying to make

01:22him mad about these Russian connections. Regardless, you know, the rejection came down.

01:29But Trump's name came off the hotel pretty soon afterwards. And I think that this anecdote

01:33is a kind of an illustration of some of the stressors that his hotel empire was facing

01:38right after he became president.

01:41Let's talk about some of those stressors, because in the Forbes piece, you pose this

01:45question. How did Trump make money by taking his name off a building? And why were the

01:50buildings taking his name off? You point out some of the disadvantage of the Trump

01:54brand. What were they specifically when he was in the White House?

01:58Yeah, so the Trump brand before he was in the White House was this sort of epitome of

02:04luxury. That's the classic association. After he went to the White House, it still had that

02:08association, but it also had all of the controversies that were tied up with, I think we could probably

02:13safely say the most controversy laden president in recent memory.

02:17And so as Trump continued to make these very controversial comments, say things about

02:23certain groups of Americans and other people in other countries, and was constantly attracting

02:28sort of negative media attention, his brand started to suffer. We see this in his condos.

02:33You see this in his hotels. You know, the value of the brand seemed to go down a little

02:40bit.

02:41So how was he profiting off of these breakups? Take us through the agreements he had with

02:45some of these buildings.

02:48So Trump got this managing and licensing company that basically the way it worked is a hotel

02:53would come to the company and say, we want you to manage the hotel for us, and we want

02:57to put your name on the hotel. Use the, you know, so it's Trump Soho on this hotel. But

03:02Trump didn't actually own this hotel, to be clear, but he managed it and he put his name

03:05on it, at least his brand. Now, that's totally normal. There's plenty of hotel companies

03:10that do that. Hilton, Hyatt, Marriott, a lot of these big hotel chains do the exact same

03:14thing. They own some hotels and then other ones. They're just licensing and managing.

03:19But what Trump when when when you sign these contracts and then if you want to back out

03:24of those contracts, often you have to buy out the rest of the contract. And so what

03:29appears to have to have happened in a couple of cases is that the owners of these hotels

03:33paid Trump, it seems like millions of dollars to get out of the contracts with his with

03:39his company.

03:40Did he get a payout every single time that a building took his name off? Or sometimes

03:45did he lose money? What did that look like?

03:49So we don't see evidence of a payout every single time there was a that someone took

03:56a name off his building. We're actually not even 100 percent sure that these payouts were

04:00in fact from the contract buyouts. But the key thing we see is I think there are five

04:06hotels that we looked at where Trump's name came down, that he was this was a hotel that

04:11he did not own, but that he managed and licensed. Right. And we see in the in his financial

04:16disclosures a big spike in income around the time that the name comes down. That tells

04:24and that's in three of the cases, not all five, but in three of the cases we see that

04:28that tells us that there was probably a contract buyout going on.

04:33Talk about how big of a spike that was. How much is Forbes estimating he received in these

04:38buyouts?

04:40So I'll take you through all three hotels real quickly. So there was the Toronto in

04:432017. That's actually the first hotel to take his name off. And we see a spike from about

04:48five hundred thousand dollars a year in management revenues to two point two million. That's

04:51pretty big jump for just one year. In Soho, that was the next one. We see a jump from

04:57about three million dollars a year to 17 million dollars a year. Again, pretty sizable

05:02jump in those revenues. Again, just in the course of one year. And both both of those

05:08were in 2017 and both of the spikes happened in 2017. The third, Hawaii, a little bit more

05:13complicated. His name actually came off the hotel in 2024 earlier this year. It was announced

05:20that his name was going to come off the building in 2023. But we see the spike in 2022. We're

05:25not really sure what to make of that. But again, we don't have a better explanation

05:29than they bought out the contract and announced it later.

05:32So he's making millions and millions just by other properties getting rid of his name.

05:37So how does this stack up to the other money he's made in the licensing and management

05:41business?

05:43So yeah, we're estimating that this is anywhere from 15 to 25 million dollars that he could

05:47have potentially made from these three hotels taking his name off again. And this is based

05:51on the spikes in revenues that we see immediately following or around the time that his name

05:56is taken off. That's out of total profits from his operating management licensing business

06:02of 110 million dollars between 2017 and 2023. So you can do the math there. That could be

06:08as much of a quarter of his money from his brand company was coming from taking his name

06:14off of buildings, not putting it on.

06:16So post White House stint, how is his licensing and management business doing? Is his name

06:22and is his brand as radioactive now as it was in 2017, 2018, when he was president?

06:30Even shortly thereafter in 2021?

06:35So I wouldn't say that his brand is quite as radioactive. I mean, obviously, he's running

06:38for president again. He's actually significantly more popular than he used to be. And he's

06:43significantly richer than he used to be. My colleague, Dan, just reported that he's

06:48the first person to make a billion dollars off of politics. So clearly something is going

06:51right for him in that regard.

06:54He's also after years of his hotel management empire shrinking, again, taking his name off

06:59of five hotels. He also sold his D.C. hotel and a project in Rio never actually came to

07:05fruition.

07:07He's actually expanding now. And there are two new Trump hotels that are supposed to

07:11open in Oman and in Dubai in the next couple of years. And he's already millions of dollars

07:17from those deals.

07:19The properties that took his name off, essentially, they're thinking must have been based on your

07:23reporting. We can make more money without your name, without this association. This

07:28is dragging down our revenue. After they cut ties with the Trump name for those properties,

07:34making more money.

07:36Again, it's hard to say. The hotels wouldn't give us financial figures to tell us exactly

07:42whether they made more money before and after. There was some reporting from Bloomberg a

07:47couple of years ago that suggested that the Soho hotel did benefit significantly from

07:52being able to take Trump's name off, even as other luxury hotels in New York were actually

07:56seeing a slight decrease in revenue per room. Theirs was going up.

08:01And there's some anecdotal evidence that people who didn't want to stay at Trump hotels

08:05would be totally fine to stay at a hotel that didn't have Trump's name on it. So you can

08:09take that with a kind of a grain of salt.

08:12Kyle Kahn Mullins, per usual, I appreciate your reporting. Thanks for coming back on.

08:18Always great to be here, Brittany. Thanks so much.

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