Donald Trump gets a significant portion of his money today from licensing his name, not from actually building anything. He can perhaps thank a little-known Georgia entrepreneur for getting him started in this business, which Trump claims accounts for $3.3 billion of his net worth.
In the 1980s, Edward Zito began selling business cards that included not only names and contact info but also personal photos. “Most people agree they can remember faces better than names; the Trump Card gives you both,” an early advertisement promised.
The name was a reference to “like trump card, game over, high card, done,” Zito tells Heat Street, adding he hadn’t even thought of The Donald when he created the business cards.
Business boomed, and soon Zito had 600 franchises nationwide. But when he filed for a trademark in 1989, Trump’s lawyers took note and sued, claiming Zito had chosen the name purposefully to “benefit … from the worldwide fame, distribution and glamour of Donald J. Trump and his ‘Trump’ name.”
Zito lawyered up, but he decided he’d prefer to be Trump’s business partner than his foe.
“My attitude was that this big promoter didn’t know who we were yesterday, but he did today, and there’s got to be a benefit,” Zito says.
Taking cues from The Art of the Deal, Zito says he tried to go straight to the top guy, The Donald himself. For three months, he sent snail-mail pitch packages to every Trump address he could provide, proposing a product endorsement.
That didn’t work, but sympathetic media coverage did. After People ran a story on Zito’s plight, “I felt like we were kind of playing in [Trump’s] league then,” the small-time entrepreneur recalls. “It was a big article, so I called, and he called back within an hour.”
“I said, ‘This doesn’t make sense, you’re looking bad,’” Zito says. “We were getting all these David and Goliath stories. … One of the very first things he said was, ‘Good press, bad press, it doesn’t matter as long as you’re in the press.’ That tells me he hasn’t changed after all these years.”
After weeks of negotiation, Zito says he finally got exactly what he wanted: Trump dropped the lawsuit and began promoting the business cards, in exchange for a monthly royalty and rights to the “Trump Cards” trademark.
Trump got his own Trump Cards, Zito says, and he even agreed to appear in a national ad campaign.
But Trump’s endorsement “didn’t make a whole lot of difference,” Zito says. “If people were going to spend the money, they wanted to know what was in it for them, not just because Donald endorsed it.”
Trump didn’t aggressively pursue other licensing deals until the early 2000s. He told USA Today in 2011 that he couldn’t remember which was his first, adding that the earliest was likely a 2003 deal with men’s clothing retailer Phillips-Van Heusen for Trump-branded dress shirts and ties. That deal earned him more than $3.2 million in royalties in the first two-year period alone. After Trump’s derogatory comments about Mexican immigrants last summer, Phillips-Van Heusen cut off its agreement with Trump, originally set to extend through 2018.
On his financial disclosure form, released last summer, Trump lists no fewer than 20 licensing agreements, which he claims yield as much as $32 million in annual royalty income. He’s also continued to sue over trademarks.
Zito says it’s “very plausible” his licensing agreement with Trump over Trump Cards was the first in a long, profitable series.
The Georgia businessman remains quiet about his political leanings. But Zito chuckles as he recounts his bygone business deal with Trump. “He’s totally different from anybody else,” he says with amusement.
— Jillian Kay Melchior writes for Heat Street and is a fellow for the Steamboat Institute.