Donald Trump's best and worst business decisions
Trump's actual record from the 70s to the present
From bankrupt to billionaire and back again, Donald Trump’s business journey has been a rollercoaster ride of highs and lows. He made his wealth and business credentials a key part of his presidential campaign and pledge to “make America great again”. From the young Trump of the 70s to the mogul he is today, we put this to the test, revealing the best and worst business decisions throughout his life.
Worst: Paris Is Out, 1970
Aged just 24, Trump attempted to break into the Manhattan entertainment elite by investing $70,000 to bag a co-producer’s position for the Broadway comedy, Paris Is Out! It was an unlikely move at the start of a career in property. Despite good reviews, the play closed after just 96 performances.
Best: Grand Hyatt Hotel, 1974
Four years later, Trump made one of the best investments of his life. He bought the rundown Commodore Hotel for $10 million, and in six years turned it into the Grand Hyatt Hotel right in the centre of New York City. The 34-storey hotel remains a huge success and Trump cashed in his share of the property in 1996 for a whopping $142 million.
Best: Trump Place, 1974
Trump was on a roll in 1974, enjoying a breakthrough after years of negotiating for an enormous residential complex on the Hudson River. The huge development included 25 acres of outdoor space and 5,700 apartments. He named the complex Trump Place, though after he was elected President residents at three of the complex’s 18 buildings successfully campaigned to remove the name from their facades.
Best: Trump Tower, 1980
In the early 1980s, Trump expanded his property empire with perhaps his most famous building, the 58-storey Trump Tower. He opened the lavish high-rise in 1983, complete with fine dining restaurants, shops and luxury apartments. It was, and remains to this day, highly-desirable real estate. By 1987, Trump claimed to have made $240 million from apartment sales alone and millions more from restaurant and retail rent.
Worst: USFL, 1983
Trump’s business acumen took a huge hit when he bought the New Jersey Generals of the United States Football League (USFL) for $9 million in 1983, losing $30 million by the fall. Some even accuse Trump of folding the entire USFL. Trump’s lawyers filed a $1.69 billion lawsuit against the NFL over its monopoly of the TV networks. It backfired spectacularly, with the jury ruling that the NFL did have a monopoly but the USFL had caused its own downfall by overspending.
Best: Mar-a-Lago, 1985
Two years later, Trump was back on track, buying the famous Mar-a-Lago, Palm Beach, for just $5 million after the market unexpectedly slumped. He turned it into a private club, built a $7 million gold leaf ballroom and charged new members a $100,000 initiation fee. In 2014 alone, Trump profited to the tune of $15.6 million from the club.
Best: Wollman Rink, 1986
With over five million annual visitors, the famous Wollman Rink in Central Park stills pulls a healthy profit. Trump renovated the rink in 1986 after convincing then-mayor Ed Koch he could do it for $3 million. He actually finished the project $750,000 under budget and by 2015 had made over $8.6 million from the site.
Best: Books Deals, 1987 onwards
Trump has a lengthy list of 20 titles he has co-written including “Surviving at the Top”, his bestselling “How to Get Rich” and his presidential campaign book, “Crippled America: How to Make America Great Again”. However, his writing career started in 1987 with “The Art of the Deal.” The book sold a million copies and remained on the The New York Times best-seller list for 51 weeks.
Worst: Trump: The Game, 1989
Although his books proved entertaining, Trump’s board game Trump: The Game was, by all accounts, a failure. It launched in 1989 with the tagline, "It's not whether you win or lose, it's whether you win!" Trump starred in a TV commercial, anticipating it would sell over two million copies. It sold only 800,000 – which Trump put down to it being “too complicated” – and was pulled.
Worst: Trump Shuttle, 1989
1989 was not Trump’s year, with another fortune lost on a failed business venture, the Trump Shuttle. In an attempt to have his own slice of luxury air travel, Trump secured a $245 million loan to buy air carrier Eastern Air Shuttle for $365 million. Within two years, and after a very expensive rebrand and upgrade, he was unable to make his $1.1 million loan interest payments and the company lost $128 million.
Worst: Casinos,1990
In 1990 Trump racked up such ginormous debts on his Atlantic City casinos he filed for bankruptcy four times. Just one year from opening the Taj Mahal casino he had racked up $3 billion in debt, ending up in bankruptcy court for the Taj, the Trump Marina and Trump Plaza casinos. Four year later, having reorganised the company, Trump Entertainment Resorts missed another interest payment on a $53.1 million bond, declaring bankruptcy again.
Worst: Trumpnet, 1990
1990 was proving to be a nightmare year for Trump’s business credentials. He decided to try his hand at telecommunications and, once again, failed. Having trademarked the name “Trumpnet” nothing came of his misadventure into the corporate telecom market. Luckily it costs only $400 to file a trademark request, so this business failure didn’t leave too much of a hole in Trump’s wallet.
Best: 40 Wall Street, 1995
In his book “Never Give Up”, Trump described 40 Wall Street as one of his “favourite deals” – and it’s not hard to see why. Trump purchased the leasehold to this landmark address in 1995 for just $1 million. By 2015, Bloomberg valued the leasehold at about $550 million. Trump also receives up to $30 million a year in rent from tenants of the 72-storey building. A business triumph!
Worst: Beverages, 1997
In another unsuccessful departure from real estate, Trump trademarked two beers, a lager and an American pale ale, both of which failed to materialise into anything profitable. Despite this, he tried his luck in the beverage market again a few years later, with soft drinks called Trump Fire and Trump Power, neither of which got past the planning stages.
Best: Trump Models, 1999
Before its closure last year, Trump Models had more than 100 women on its books, calling itself "the brainstorm and vision of owner, Donald Trump". With a $2 million annual income from the agency and use of his models in episodes of The Apprentice, this was a successful business decision. However, the agency is involved in multiple lawsuits which could prove costly. Former employees have made allegations that models worked without US visas, and lived in very poor conditions.
Worst: Trump University, 2004
Trump University is perhaps the most well-known and controversial of Trump’s business failures. In 2010, four former students sued Trump University for “offering classes that amounted to extended ‘infomercials’” and employing convicted felons as educators. The New York Attorney General sued Trump $40 million for allegedly defrauding students. Trump tried to leave the incident behind, renaming the business The Trump Entrepreneur Initiative, but operations soon ended.
Best: The Apprentice, 2004
Premiering on NBC in 2004, The Apprentice enjoyed huge ratings across the US. Putting contestants through their paces as the business mogul host and executive producer of the show, Trump took home a huge $1 million per episode. The show also did wonders for Trump's fame and brand worldwide.
Worst: Trump Tower Tampa, 2005
Although he wasn’t directly involved with the business, Trump’s brand and wallet took a hit when he leant his name to a condo tower that went bankrupt. This was just one of many lost investments during the housing market crash. The Tampa developers declared bankruptcy with only $3,500 in assets.
Best: Trump International Tower Chicago, 2005
Bought for $73 million, Trump converted this iconic tower into the second tallest building in Chicago. Now a combination of 5-star hotel and private residence, the 98-storey structure was supposed to be the tallest building in the world, but this was substantially revised after the September 11 attacks. Still, it was Travel+Leisure’s best large city hotel in North America in 2010, and in 2012 the 89th-floor penthouse alone sold for $17 million – in cash.
Worst: Go Trump, 2006
Clearly Trump could renovate and run a highly successful hotel, but a travel website was a different matter. With the industry worth $80 billion a year, Trump sough his own slice of the cake by launching his GoTrump travel website. The experiment flopped, and the URL now redirects to his current website.
Worst: Trump Mortgage, 2006
When launching his mortgage business at the height of the housing market boom, Trump boasted to CNBC: “Who knows more about financing than me?” Yet the man Trump selected to run the business had worked on Wall Street as a registered broker for only six days. Trump’s anticipated first-year profits of $3 billion quickly slumped to $1 billion. With outstanding debts of $298,274 to a former employee and $3,555 owed in unpaid taxes, the entire enterprise was out of business by September 2007.
Worst: Trump Magazine, 2006
Unfortunately for Trump, 2006 was about to become one of his worst years in business. The complete failure of his first attempt at running a publication, Trump World, should have served as a warning of things to come. But ever the optimist, Trump re-launched the magazine as “Trump” in 2006, attempting to advertise luxury living through the financial crisis. With $7.3 million in debt, the magazine had folded entirely by 2009.
Worst: Trump Vodka, 2006
Trump’s brand took yet another hit in this shaky business move. Despite being teetotal and having no previous success in the alcohol business, Trump fancied his luck as the face of a vodka brand. As the slogan suggested, this was supposed to be “Success Distilled”. However, after poor sales the business folded five years later.
Worst: Trump Steaks, 2007
Having been stung from several poor business moves, you’d have thought Trump would return to his forte, real estate. Instead Trump decided to launch a line of steaks. Strange move? Not when you consider that his beef was sourced from Buckhead Beef, to whom he owed $715,240 after his Atlantic City properties filed for bankruptcy. Sales were abysmal and the company was discontinued, as was the Trump Steakhouse in Las Vegas due to 51 health code violations.
Best or Worst? Turnberry Golf Course, 2014
Just before being sworn in to office, Trump made one of his biggest and riskiest purchases yet. He bought Turnberry Golf Course in Scotland for more than $60 million, spending a further $200 million remaking the site. Turnberry lost $23 million in 2016, with some questioning its ability to pay back the $300 million owed in investment, let alone make a profit. Bad business move? Only time will tell.
Best and worst: President of the United States, 2017
Trump's ultimate business 'success' came in January 2017 when he won his place in the White House. Promising to run it like a business, he's had his fair share of public ups and downs, both close to home and all over the world. Question is, how long will he remain in office and will his reputation survive?
Comments
Be the first to comment
Do you want to comment on this article? You need to be signed in for this feature