In Ernest Hemingway’s “The Sun Also Rises,” someone asks Mike Campbell, the troubled Scottish war veteran who is engaged to Lady Brett Ashley, how he ended up bankrupt. “Two ways,” Campbell replies. “Gradually, and then suddenly.” Campbell’s interlocutor goes on to ask what brought about his collapse. “Friends,” Campbell says. “I had a lot of friends. False friends. Then I had creditors, too. Probably had more creditors than anybody in England.”
It’s too early to determine whether Donald Trump might be headed for the same fate as the wretched Campbell, but there are intriguing parallels. Not so long ago, Trump also had lots of friends and creditors. Many of these friends held powerful positions in the worlds of business and politics. His most important creditor was Deutsche Bank, which, during the past decade, had defied internal dissension and extended hundreds of millions of dollars of loans to him. On top of these invaluable relationships, Trump had nearly ninety million Twitter followers, a vast audience that appeared to provide lucrative possibilities for monetization after he left office.
But, in the week since Trump incited a mob of his supporters to attack the Capitol, he and his businesses have suffered a series of blows. Key corporate partners have abandoned him; some of his fellow-billionaires have spoken out against his sedition; Deutsche Bank has let it be known that it doesn’t want anything more to do with him; and Twitter stripped him of his following. When Trump leaves the White House, next week, he may have his eyes on planning a return to the political stage, but surely his first priority will be stabilizing his business empire—if he can manage it.
If the corporate shunning of Trump persists and expands to other businesses owned by him, it could do immense damage. Trump’s hotels and resorts, such as the Trump National Doral, in Miami, depend on big businesses to fill their ballrooms and function spaces. They also rely on wealthy individuals to book the tee times, hotel rooms, and weddings that provide daily revenues. His condo developments cater to wealthy buyers. Other Trump ventures, particularly his licensing deals around the world, are even more dependent on the enduring appeal of the Trump brand, which is now in question. It’s hard to believe this reputation problem didn’t play at least some role in his decision to put out a video on Wednesday, hours after the House of Representatives voted to impeach him for a second time, in which he said, “Violence and vandalism have absolutely no place in our country and no place in our movement.”
Trump’s attempt at a Presidential “self-coup” came at what was already a troubled time for the Trump Organization, which has consistently struggled to eke out much in the way of taxable profits. As the coronavirus ravaged the travel and hospitality industries in 2020, Trump-owned hotels and golf resorts suffered along with other businesses in these sectors. Like other companies, the Trump Organization shuttered some of its properties for several months, including a hotel in Las Vegas and golf courses in Florida, Scotland, and Ireland. The virus also impacted two of Trump’s most valuable real-estate assets: a pair of prime office towers that he co-owns with Vornado Realty Trust, which is run by a fellow New York mogul, Steve Roth. Last year, Vornado was planning to sell the two towers—1290 Sixth Avenue, in New York; and 555 California Street, in San Francisco—in a deal that could have produced a big payday for Trump. In November, Vornado put these sale plans on hold.
Shortly after Trump lost the election, according to the Washington Post, one of his closest business associates, the real-estate investor Tom Barrack, called Trump and advised him to abandon his efforts to overturn the result, and to opt, instead, for an “ ‘elegant’ exit.” The Post story said Barrack told Trump that, if he agreed to leave office quietly, he could “preclude what could be a painful future: millions of dollars in legal costs, rampant investigations and more boycotts of his businesses.” Barrack’s advice turned out to be sound. Trump ignored it.
After the deadly violence at the Capitol, on January 6th, the financial blowback on Trump came quickly. Within twenty-four hours, Shopify, the e-commerce provider, shut down a number of online stores affiliated with Trump, including ones that sold Trump campaign merchandise. A bigger blow for the President came last Sunday, when the P.G.A. of America, which has had a long-standing relationship with him, announced that the 2022 P.G.A. Championship, one of professional golf’s four major tournaments, would no longer be held at the Trump National Golf Club in Bedminster, New Jersey. Twenty-four hours later, the R. & A., the ruling body of golf outside of the United States, followed the P.G.A.’s lead and announced that, for the foreseeable future, the British Open would not be played at Turnberry, a famous old course that Trump owns in Scotland.
Trump’s passion for golf is well known: since becoming President, he has played more than three hundred rounds. But the passion also extends to his wallet. Over the past two decades, he has spent hundreds of millions of dollars purchasing and upgrading more than a dozen notable golf courses dotted around the globe, with the goal of establishing the world’s leading golf-resort brand. Hosting a major championship would have been a marketing coup for Trump, but it’s no longer a realistic prospect. “It has become clear that conducting the P.G.A. Championship at Trump Bedminster would be detrimental to the P.G.A. of America brand,” the P.G.A.’s president, Jim Richerson, said, in explaining the organization’s decision.
In addition to making himself a pariah in the industry that he perhaps cares most about, Trump has also seriously damaged his standing in two other areas vital to his livelihood: the real-estate business and on Wall Street. On Monday, Cushman & Wakefield, one of the world’s largest brokers of commercial real estate, said that it had “made the decision to no longer do business with the Trump Organization.” In the past, Cushman & Wakefield has leased office space at several Trump properties, including Trump Tower and 40 Wall Street, in New York, and the Trump International Hotel & Tower, in Chicago. Going forward, Cushman & Wakefield won’t be finding any more tenants for Trump properties.
The same day, Signature, a New York-based bank that was once so close to Trump that his daughter Ivanka served on its board of directors, said that it was closing Trump’s personal accounts, and called on him to resign “in the best interests of our nation and the American people.” Because Trump has personal accounts at other institutions, Signature’s move by itself shouldn’t hurt him much. The larger question is whether, going forward, Trump’s businesses will have ready access to credit, which is the lifeblood of all real-estate companies.
In another potentially ominous sign, Deutsche Bank said that it won’t lend any further money to the Trump Organization after its current loans—which are worth more than three hundred million dollars—come due, in 2023 and 2024. Deutsche Bank would seemingly like to immediately cut its ties to Trump, which have long created controversy, but it can’t find a way to make this happen. “The bank has concluded that, short of forgiving the debt, it has no way to extricate itself from the Trump relationship before the loans come due,” the Times reported. Trump has personally guaranteed these loans, according to an earlier Times investigation, which means that Deutsche Bank could seize his other assets in the event of nonpayment. To avert such a possibility, Trump needs to find enough cash to pay down the loans or find another lender that will refinance them.
In an interview with the Associated Press, a few days ago, Trump’s son Eric, who works at the Trump Organization, dismissed the wave of boycotts and distancing as part of a “cancel culture.” He also insisted that they don’t represent a major threat to the family company, which he described as financially sound, or to the ambitions of his father. “You have a man who would get followed to the ends of the Earth by a hundred million Americans,” the younger Trump said. “He created the greatest political movement in American history and his opportunities are endless.”
That was typical Trump bluster. It was also in line with suggestions from the Trump camp that, after he leaves office, the President might try his hand as a media mogul, perhaps by setting up a new company to challenge the likes of Fox News or Twitter. It remains to be seen whether any of these ideas come to anything. Right now, though, the Trump name is so toxic that virtually no one in the business world wants to be associated with it, and neither do major municipalities. On Wednesday, New York City announced that it is ending Trump’s contracts to run two ice rinks and a carousel in Central Park and a golf course in the Bronx.
The Trump Organization is a private company and doesn’t publish its financial statements, so it is hard to judge definitively whether it would be capable of withstanding a broad and lengthy boycott. From the outside, its most reliable fallback appears to be its stake in the two Vornado-run buildings, which, in a crisis, it could use to raise substantial sums of cash. Ultimately, this might save Trump from suffering the same fate as Hemingway’s character. But, with all the financial and legal challenges that he is facing, Trump’s post-Presidency existence seems unlikely to be a settled one.