In the year that Donald Trump was transformed from a long-shot presidential candidate into the presumptive Republican nominee, he took on more debt and sold at least $50 million of stocks and bonds. At the same time, the value of his golf courses and his namesake Manhattan tower soared.
Those are the findings of an updated assessment of the wealth of the man poised to accept his party’s nomination Thursday night in Cleveland. While the performance of Trump’s major assets was uneven, his net worth rose to $3 billion on the Bloomberg Billionaires Index, up from $2.9 billion a year ago.
Trump’s riches have been debated for decades, and the billionaire’s estimates have been higher than those made by others. Since becoming a candidate, he has repeated his assertion that he’s worth more than $10 billion, which he says is proof of his success as a businessman. Estimates in the past year by Fortune and Forbes magazines have come in at less than $5 billion.
Bloomberg’s calculation was conducted in line with its methodology for valuing the fortunes of the world’s richest billionaires. It uses information compiled from Trump’s financial disclosure to the Federal Election Commission in May, mortgage filings, property records, leasing agreements, annual reports from Trump’s European golf courses, market data on rent, occupancy and capitalization rates, sales of hotels and condominiums and interviews with people familiar with the assets who asked not to be identified because they’re closely held.
Brand Value
“There are numerous, generally acceptable ways to value regular and trophy properties, of which we have many,” the Trump Organization said in an e-mailed statement disputing Bloomberg’s methodology and valuation. Bloomberg “substantially undervalues our properties by failing to account for key value-generating components.”
One difference between Trump’s estimates and Bloomberg’s is the value of his personal brand. Trump has said his ability to license his name and likeness to everything from international hotels to mattresses is worth $3.3 billion. Bloomberg assigns it a value of $35 million, or one times sales from ongoing licensing deals.
While Trump hasn’t explained how he arrived at his figure, it would indicate a sales multiple of almost 100, based on the average revenue he disclosed for management fees and royalties, adjusted for 12 months. The highest price-to-sales ratio for any company in the S&P 500 Index is 18 times sales. Bloomberg values the licensing enterprises lower because their structure and profitability is unknown, and because some agreements from which Trump derived such revenue last year have been suspended amid controversy generated by his campaign.
As Trump’s licensing revenue diminishes, his brand derives most of its value from cost-savings in earned media for his campaign, said Edgar Baum, chief executive officer of Toronto-based brand-valuation firm Strata Insights.
“If he does not win, all the cost savings value from earned media becomes null,” Baum said in an interview. “I doubt anyone is going to give Trump positive earned media to the remaining Trump-branded revenue streams he’ll need after that.”