The Greatest (and Most Lucrative) Show on Earth

Barbara Walters cogently observed in a 2011 interview with the Kardashians (of the reality show and sex tape fame) that the daughters of celebrity attorney Robert Kardashian were more famous for being famous than for having any talent. In fact the lack of talent was a virtue. “We’re still entertaining people,” Khloe Kardashian said without any sense of irony. And that’s the key to the Kardashians’ business success—you don’t need talent when you’ve got an entertaining personal brand.

That made me think of Republican presidential candidate Donald Trump. Trump has arguably made more money claiming to be successful than in actually creating new businesses or technologies. His bankruptcies and failures are legion: several casinos, an airline, and even the USFL’s New Jersey Generals. The end of the 20th century found him essentially broke. But in 1999 he inherited a fourth of his father’s estate, a get-out-of-jail-free card worth about $65 million.

He invested wisely, eschewing the highly leveraged projects that ruined him before and making the most of his public persona, licensing his name in exchange for equity or recurring fees in real estate deals. When the housing bubble burst and the Great Recession made new real estate deals impossible, he doubled down on his name by hosting a reality TV show minting new entrepreneurs. He even owns the Miss Universe and Miss USA pageant, and holds title to a 58 story office building in Manhattan.

Now he has split his blackjack hand and doubled down again, running for president. His popularity among the anti-Washington crowd has exploded, and his maverick commentary and unorthodox viewpoints has scored him millions of dollars of free publicity. It has cost him millions too—an anti-immigration stance has resulted in several contract cancellations that Forbes figured cost him $125 million in losses.

So what is Donald Trump worth? It is hard to say. His finances are an illiquid black box that defy analysis. Forbes figures his brand is worth about $200 million. His federal election filings shows a net worth of about $1.1 billion.

In 2005, only six years after his fortuitous inheritance, New York Times journalist Tim O’Brien took a stab at researching Trump’s estate and seeking professional opinions as to the real estate mogul’s real worth. The verdict? $150-$250 million. Not a bad result starting from $60 million, but certainly not billions. Trump was so incensed by O’Brien’s analysis that he sued him for libel, and lost.

Another high profile businessman, Mark Cuban, weigh in recently on Trump’s claim of being a multi-billionaire. Characteristically tactful, Cuban commented:

“While it’s a big number (Trump’s claim of $10 billion in net worth), it’s not an important number. In fact, it’s a play number,” Cuban said. “Let’s say you own a painting that gets appraised at 10 billion dollars. That gives you a net worth of 10 billion. But that does not mean you have a lot of cash,” Cuban added. “In fact, it’s possible to be worth billions, but not be able to pay your rent.”

My analysis: Trump was able to show about $70 million in securities in his FEC filing. Throw in the $200 million brand and another $200 million for the Trump Tower, I figure he can claim about $450 million to $500 million in the clear. The rest of the tangle of claims are subjectively-valued assets tied to minority stakes in illiquid properties and concessions. Hey, $500 million is still a heck a lot of money, and a pretty good increase in ten years of tough financial conditions after O’Brien’s 2005 estimate. But it doesn’t make him a billionaire.

But give credit where credit is due. No one has made more money being famous than Donald Trump, not even the Kardashian clan. And if Trump wins the Republican nomination, he’ll become the Greatest Show on Earth. Now that’s a sobering thought.

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