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Mark Cuban Says Trump Will Go Bankrupt If He Loses

“If @realDonaldTrump loses this election, im betting he personally goes bankrupt w/in 7 yrs. Thats how toxic his brand now is.” So tweeted self-made billionaire Mark Cuban yesterday, and while I take no position on the bankruptcy forecast, Cuban’s point about Trump’s brand is valid and important. Trump’s presidential run – unlike virtually all his previous attention-seeking behavior – may cost him significant money.

Trump deserves credit for hatching a genuine business innovation: branded high-end real estate. No one had previously created a brand that could be put on an office building or a hotel or an apartment building or a golf course and that would give any of those properties a patina of luxury and success. Trump did it, and the brand was his name. His business strategy over the past 40 years has been to keep himself in the public eye because every mention of his name in the media built the value of the brand.

At least that’s how it worked until now. Over the past 12 months Trump has almost certainly been devaluing his brand among the customers who are most important to his businesses – high-income individuals plus the corporations that rent space in his office buildings and hold conferences and meetings in his hotels or hotels that have licensed his name. Trump’s supporters in the election tend to be less educated and poorer than voters overall; they’re not his customers. By contrast, he’s losing heavily among college-educated voters, a group that includes most of his individual customers. Corporate customers find it increasingly difficult to associate themselves with Trump-branded real estate because of his astonishing ability to offend assorted groups – Latinos, Muslims, women, the disabled. No mainstream corporation wants to offend those groups by occupying space with Trump’s name in shiny gold capital letters on the front.

There’s evidence that Trump’s brand devaluation is happening. Bloomberg cites research showing that among consumers earning over $150,000 a year, the Trump brand’s value had plummeted by the end of last year. Other research finds that the market share of Trump casinos, hotels, and golf course plunged 14% from July 2015 to July 2016.

If Trump the brand were put on mass-market consumer products, time might heal the wounds that Trump the man has inflicted on it. But corporate customers won’t forget what he has said, nor will many high-end individuals. Quite a few Latinos, Muslims, women, and disabled, regardless of income, won’t forget either.

It would be a mistake to think that Trump hasn’t thought about all this. He has been a skillful brand steward for decades. Maybe he has a plan for repositioning his brand, or maybe he’s so confident of winning in November that he believes he’s about to ascend into a higher realm entirely. But it would be ironic if the man who once bragged that he could be the first person ever to turn a profit on running for president instead decimated his fortune by running.

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What We’re Reading Today

Salesforce calls for EU to study Microsoft’s purchase of LinkedIn 
Marc Benioff‘s company says allowing Satya Nadella‘s Microsoft to buy LinkedIn could threaten innovation. Salesforce claims Microsoft would deny competitors data from LinkedIn’s 450 million users. It’s an awkward request, since Salesforce had also sought to buy Jeff Weiner‘s LinkedIn. Microsoft will likely seek EU approval for the deal in a few weeks. Reuters

Stumpf and Buffett talk
At a House hearing, Wells Fargo CEO John Stumpf was grilled by upset lawmakers who called the bank “a criminal enterprise.” Stumpf said he had one conversation with Warren Buffett, whose Berkshire Hathaway is Wells’s largest shareholder. Buffett reportedly spoke to the company’s board, making clear that the bank’s ethics need a radical change. Buffett denies the report. Fortune

Hedge funds pull billions out of Deutsche Bank 
Concerns about the stability of John Cryan‘s Deutsche Bank heightened yesterday as hedge funds began withdrawing funds from the firm. While the withdrawals may total billions, analysts say they’re only a small portion of the hundreds of billions the bank has in its prime brokerage business. The news summons images of 2008, when hedge funds fled Bear Stearns and Lehman Brothers. But Deutsche says the comparison is unfair, and analysts say the bank doesn’t face a liquidity problem like the failed banks did. MarketWatch

Philippines president likens himself to Hitler 
Speaking of his efforts to rid the country of drug addicts, Philippine President Rodrigo Duterte cited the Holocaust. “Hitler massacred three million Jews … there’s three million drug addicts. There are. I’d be happy to slaughter them.” Over six million Jews were killed in the Holocaust. The rhetoric is consistent with Duterte’s statements that he wouldn’t punish police who execute drug dealers on sight. Guardian

Building a Better Leader

Air pollution could lead to poor productivity
It’s true even for indoor workers. Researchers find that employees working inside an office are 5% to 6% more productive if the air quality outside is”good” based on EPA criteria. Harvard Business Review

If you’re forgetting names, checking your phone during conversations,…
…and not looking people in the eye when you talk, there’s a good chance you’re leaving a bad impression and don’t know it. Fortune

And if you have trouble remembering names…
…write them down or type them into your smartphone after a conversation. Do this especially if you think you will interact with the person again. Inc.

Worth Considering

Airbus reshuffles
In an effort to make as much profit as Boeing, Airbus CEO Tom Enders will combine headquarters for its jetliner operations with HQ for the overall group, which also includes defense and space businesses. Enders will also eliminate a number of management positions, though he didn’t specify how many. It’s an effort to focus the company more on its commercial aircraft division.  WSJ

Congress has second doubts about the Obama override
On Wednesday, Congress overwhelmingly voted to override President Obama‘s veto of a bill that would allow 9/11 victims’ families to sue Saudi Arabia. Obama was concerned that the law could allow other nations to do the same to the U.S. Now Republicans, including Senate Majority leader Mitch McConnell and House Speaker Paul Ryan, have said the bill may need another look in order to protect U.S. troops. Fortune

Fallout from Och-Ziff bribery scandal 
As Daniel Och‘s hedge fund agrees to pay a fine of more than $400 million for bribing government officials across Africa, attention turns to Och’s former protege, Michael Cohen. He led the European division and spearheaded efforts in Africa during an oil and mining boom. The SEC says a senior employee that headed Europe knew about the bribes. Cohen left the firm unceremoniously in March 2013, potentially to open a hedge fund. While he hasn’t been charged, the U.S. investigation is continuing. Bloomberg

Up or Out

Zynga has hired Gerard Griffin as CFO.  Fortune

Fortune Reads and Videos

Howard Schultz pushes ‘get out the vote’ message
It’s the latest message the Starbucks CEO is propagating through the coffee chain. Fortune

Elizabeth Warren finds her next target
She’s wondering why the Department of Education continues to collect debt from Corinthian Colleges’ students when the agency knows their debt might be eligible for forgiveness. Fortune

77% say prescription drug costs seem unreasonable
That’s up from 72% last year, according to a new survey by the Henry J. Kaiser Family Foundation. The survey also showed support for caps on drug prices. Fortune

The Cleveland Cavaliers aren’t the only ones getting championship rings
Owner Dan Gilbert plans to give the rings to over 1,000 full- and part-time staff members, including ticket takers and ushers. Fortune

Happy Birthday

Jimmy Carter turns 92 on Saturday Biography

Alex Karp, co-founder and CEO of Palantir Technologies, turns 49 on Sunday CNBC

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