By David Fahrenthold and Jonathan O’Connell,
Jeenah Moon Reuters
Former president Donald Trump is pitching his new social network as a mold-breaking “media powerhouse” set to challenge Big Tech, but the venture could also echo an old Trump strategy — lending his name and reputation to other people’s businesses, producing revenue for Trump with little work or overhead.
At a time when the Trump Organization is facing unprecedented challenges — including mounting losses at some businesses and an indictment of its chief financial officer — the social media venture could allow Trump a way to enter the tech sector without much risk.
“Avoiding being responsible, in any ultimate sense, is a constant in his strategy,” said Michael D’Antonio, who has written biographies of Trump. D’Antonio said he saw the new social media venture as an extension of that strategy: “If you think of him always looking for ways to try businesses without being truly responsible — combined with his sense that he can do anything — then this is kind of natural.”
On Wednesday, the former president announced a new company, Trump Media & Technology Group, and immediately said it had merged with a company called Digital World Acquisition Corp. — an entity set up to raise money for investments.
The company announced grand ambitions to “unify” the conservative media market and compete with tech and media giants as varied as Facebook and Disney. But in the short term, the company’s product was less than impressive: Its social network, called Truth Social, was defaced by pranksters within hours of its launch. Visitors saw a video of a pig defecating, supposedly posted by “donaldjtrump.”
Though many details of the new venture were still unclear Thursday, its structure and business plan does differ from Trump’s other companies. Most are privately owned by Trump, based at Trump Tower, and run by a set of executives who are either Trump’s relatives or his longtime employees.
This company, by contrast, is intended to be publicly traded and run by executives who don’t have a long history with Trump. In documents filed with the Securities and Exchange Commission, its CEO is listed as Patrick Orlando, a finance executive who is also CEO of a company in Wuhan, China. He has listed an office address that corresponds to a WeWork co-working space in Miami.
Its chief financial officer, Luis Orleans-Braganza, claims to be a member of the defunct Brazilian royal family and a member of the Brazilian Congress from the party of hard-right president Jair Bolsonaro.
It is unclear what Trump’s role will be in the company, or if he will have an ownership stake. Neither the new company nor the Trump Organization responded to requests for comment from The Washington Post on Thursday.
Trump began his career in the high-risk, high-reward business of buying and selling New York real estate. But, after he achieved TV fame on “The Apprentice,” he entered another line of business with far less risk: selling his name to people who wanted to slap it on their products.
In the heyday of that merchandising business, Trump was paid to lend his name to apartment buildings, eyeglasses, cologne, mattresses, vodka, steaks, coffee, chandeliers, suits — even a brand of urine test. Many of these products failed, but that was not Trump’s problem. It was the people who had bought Trump’s name who made the products and took the risk.
That revenue from licensing streams was reduced, sharply, after Trump entered politics in 2015 and brands seeking a broad market sought to distance themselves from his rhetoric.
But this venture seems to show Trump again lending his name and reputation — to a business that may see his politics as a plus and not a minus. While it’s not clear yet whether Trump is investing his own money or how much, experts said the new media company looks more like the post-“Apprentice” merchandising deals than his capital-intensive real estate projects.
“There’s nothing surprising. The only surprising thing would be if he actually put his own money into it. He’s always an other-people’s-money people guy,” said Gwenda Blair, who wrote a biography of Trump, his father and his grandfather. If Trump doesn’t have to invest money, she said: “What’s the downside. It’s all upside.”
Trump has previously run one publicly traded company, which included many of his Atlantic City casinos and was called Trump Entertainment Resorts. The company operated for roughly two decades, starting in 1995. For Trump’s investors, it was a disaster: The company lost more than $1 billion, its stock price nosedived, and it filed for bankruptcy three times, in 2004, 2009 and 2014. The company was eventually taken over by investor Carl Icahn.
But Trump himself did well: The struggling company paid him more than $44 million in salary, bonuses and other compensation. Tim O’Brien, another Trump biographer, said this demonstrated Trump’s willingness to try new ventures while reducing his risk — but also his struggles to succeed while running a complex operation.
“They’re asking anyone who might invest in this to simply trust that, because Donald Trump’s involved with it, it might make money,” O’Brien said.
Trump has ventured into new industries in the past, including airlines, education and casinos, and struggled. If Trump’s role in the new venture is bigger than simply lending his name, O’Brien said, he may find the tech sector equally complex: “When push comes to shove, he’s going to have to prove that he can actually manage a media company.”
This new venture comes at a time when Trump’s old business — the Trump Organization — is facing problems on multiple fronts.
The Trump Organization is heavily invested in bricks-and-mortar operations — hotels, golf courses and office buildings — many of which suffered from political backlash and the covid-19 pandemic. Several of the company’s biggest properties, including Trump’s hotel in downtown Washington, have lost millions of dollars in recent years, according to financial filings.
The company is also facing at least three state-level investigations into its financial practices, including one by the Manhattan district attorney that has already led to the indictment of Trump’s longtime chief financial officer on charges of felony tax fraud. Two of Trump’s corporate entities were also indicted at the same time. Both the companies and the executive, Allen Weisselberg, have pleaded not guilty.
Trump appears to remain the owner of the Trump Organization, but he has left day-to-day leadership to his sons Donald Jr. and Eric — continuing an arrangement he set up when he entered the White House.
Under their leadership, the previously fast-growing company began to shrink: The Trump name has come down from hotels and apartment buildings, and the company canceled plans for domestic hotel expansion.
Since his election, Trump and his family repeatedly bemoaned the deals the company had forgone to prevent the appearance of a conflict of interest. Upon being elected to office Trump promised no new deals abroad and that his company would only honor “normal and customary arrangements” made before his election.
“We walked away from billions of dollars’ worth of deals and ceased virtually all expansion,” Eric Trump said in 2019.
Now that Trump is out of office, however, the company does not seem to have resumed expansion. The company has again put its D.C. hotel lease on the market, hoping to recoup its more than $220 million investment in the property, which lost more than $70 million while Trump was president. It has lost a number of tenants from the office space at its landmark New York property, Trump Tower. And it has seen its name come down off apartment buildings in New Jersey and Connecticut.
There has been no evidence that the company is attempting to restart expansion plans for its hotel line, either in America or abroad.