Monday, January 11, 2021

Something to Know - 11 January

There are enough videos, online media articles, and other narratives on the election, the attempted coup, and potential security issues for the inauguration to keep you busy all day trying to keep up.  All of them are interesting, and some are very thought provoking and scary.  What I was looking for was something like this blip I got from CNN, and it concerns the diminishing value of the Trump Brand.   There are a whole host of legalities involving impeachment, the 25th Amendment, pending and upcoming criminal charges involving the future of Donald J. Trump.   The most immediate effect is the marketing star power of the Trump business organization; it is fading right now, and will continue to do so, especially if attempts to impeach, indict, prosecute, and jail time (in part or in total) result.   With a $400 million debt payment due, legal costs, and the flow of red ink on all of his businesses, he is going to go broke in due time.   It may be that prosecution for tax evasion and punishment (like Al Capone), from the non-federal domain of New York, will be all that may result from all of this.  However, there is orange jump suit time in a state penitentiary, and a totally bankrupt Trump company that will be the end result.   Will that be enough to satisfy those who want him to receive his due justice?  We shall see.  The CNN article ends with a brighter and sunnier prospect for his future, however, I feel that the financial burden and stain he will carry will dramatically force him into his last bankruptcy with no chance to return.

New York (CNN Business)
A growing number of businesses suddenly want very little to do with Donald Trump after he incited a mob to attack the Capitol. That could make it more difficult for the Trump Organization to do business after he leaves office.
"I think it's a huge problem for him," said Michael D'Antonio, a CNN Contributor and a Trump biographer. "He created toxicity for an important part of his market. I don't know if some will ever come back. Most brands try to avoid controversy. I feel like he's forced the hands of the companies that decided to disengage."
Since last week's siege of the US Capitol by Trump supporters, a growing list of businesses have cut ties with him, citing violations of their rules against promoting violence -- or concerns about associating their brands with Trump.

Twitter and Facebook banned Trump indefinitely, taking away his biggest megaphones. Stripe is no longer processing credit card payments for his campaign, Shopify stopped operating online stores for the Trump Organization and the campaign and the PGA announced it is pulling a major golf tournament from one of his properties.
It's unclear which, if any, banks will want to loan money to the Trump Organization. Deutsche Bank (DB) had loaned the company more than $300 million over the past decade. But New York state criminal investigators looking into Trump's business practices have subpoenaed the bank about its lending relationship with the Trump Organization. Late last month the two private bankers at Deutsche who worked most closely with Trump resigned their positions.

Properties at risk
Some of the Trump properties could be particularly hard hit by last week's events, top among them the Trump hotel in the former post office building in Washington, DC. During the last four years businesses and foreign governments that wanted to curry favor with the Trump administration booked rooms or other events at the hotel.
"It could be that the opposite will be true now," said D'Antonio. "Anyone going to DC on business would be crazy to stay at the Trump hotel unless all their business is with the Republican National Committee."
Trump's contract to operate the hotel in the government-owned property could even come under attack. Critics have argued it was improper for him to be operating it during his administration. Last week's events could increase the calls on the government to end its contract with the Trump Organization.

"As we view it, for four years he violated the terms of that agreement by having a federal office holder benefit from that contract. There should be consequences of that," said Noah Bookbinder, executive director for Citizens for Responsibility and Ethics in Washington (CREW), a watchdog group that has been a frequent critic of Trump and his businesses.
Bookbinder said that Trump was already likely to lose some business at his hotels, including his Washington property, when he is no longer president. But the actions of last week only accelerated companies deciding to no longer do business with Trump, Bookbinder said.
"I think unquestionably he would have held on to more of it without last week's events," he said. "If he had emerged from this as the power center for the Republican party and the likely candidate in 2024, there would have been a lot of incentive for the RNC and others to keep holding events at his hotels."
Bookbinder said the violence at the Capitol could also give businesses that have contracts with the Trump Organization a way to get out of those commitments.
"It's standard for a lot of contracts to have outs if there is illegal or immoral conduct," he said. "My guess is that a lot of companies will be eager to take advantage of those kinds of legal openings."
Other properties with the Trump name on them could be at risk going forward. Many of those agreements are marketing deals, in which he licenses the use of his name -- and brings in big bucks for doing so.
"Those branding deals were worth millions to him. Not having them would be significant," D'Antonio said.
But it's not clear how long lasting the backlash against Trump from last week's riot will last.
"There are many times in recent years that it seemed the president crossed a line and yet things quickly went back to normal," said Bookbinder. "I suspect that won't be the case here."

New opportunities
Trump does leave office with tens of millions of fervent fans, D'Antonio said, opening up the possibility for new business ventures and new sources of revenue, even if he's closed the door on other business relationships.
There was a lot of speculation before last Wednesday that Trump would start his own media company upon leaving office. Despite the blowback from the Capitol attack, that's still a possibility D'Antonio said.

Conservative networks OANN and Newsmax have picked up viewers since the election from Trump fans who felt that Fox News was not being supportive enough of the president. If he were to have a show on either network it would instantly become their best rated program, D'Antonio said.
"How long would broadcasters or others be able to resist the money?" he said.
And there is a chance he could start a streaming network of his own, even if he doesn't go on a cable system that might be resistant to air a Trump TV network. If he attracted 7 million subscribers, or less than 10% of his vote total, and they paid $5.99 a month, that would be more than $500 million in annual subscriber revenue, D'Antonio said.

So it's possible that even if Trump severely damaged his brand last week, his overall business outlook is in better shape today than it was before he started his campaign for president in 2015, just because of the loyalty he's built up with a large part of the country over the last five years.
"I don't know that the demographic of his absolute die hard base is a good fit for his high end businesses," D'Antonio said. "They can't pay hundreds of dollars a night to stay at some of his properties or belong to his country clubs. But the whole campaign was started as a branding exercise. I think in terms of mass market, he's better off."

I do solemnly swear that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States.

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