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How Trump's Self-Worth Became His Net Worth

Stephen Mihm, an associate professor of history at the University of Georgia, is a contributor to the Bloomberg View. Follow him on Twitter at @smihm.
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The Personal Financial Disclosure form that Donald Trump filed earlier this week with the Federal Elections Commissiom shows that the real estate holdings he has defined as the source of his vast wealth actually may be relatively modest. Rather, his most valuable asset is the Trump name, which the mogul has previously claimed to be worth $3 billion.

How did something as intangible as a family name come to acquire such value, on par with, or exceeding that of brick-and-mortar buildings or plots of land? A century ago, this question wasn’t remotely settled. 

In the 19th century, celebrities didn’t own the rights to their own name or self-representations. Jenny Lind, a Swedish opera star who was one of the first global pop icons in the 1850s, became fodder for a host of manufacturers and advertisers. Entrepreneurs hawking everything from chewing tobacco to parasols slapped her face and name on their products, without any compensation to the celebrity herself.

That one could own one’s name and profit from it was a bizarre concept with no basis in law. And so it remained for the rest of the century. All kinds of public figures, including presidents, were fair game for advertisers, and while there was much grumbling about this practice, no one thought it possible for the famous to get a piece of the action.

The first critical shift in thinking took place in the 1890s. It involved ordinary people, not celebrities, but as the legal historian Stuart Banner has argued, it helped clear the way for the famous to profit from their fame. 

The key case involved a pretty teenage girl named Abigail Robertson. A local photographer took a picture of the young beauty that ended up in the hands of Franklin Mills, which sold flour. The company liked what it saw and put her face on posters hawking their wares. Robertson, aghast at her newfound celebrity, suffered a nervous breakdown -- and then she sued.

The court that heard her case sided with Robertson, citing a novel legal doctrine: the right to privacy. Robertson’s visage "is a property right which belongs to her,” the judge declared, “owing to its beauty as a trade-mark or an advertising medium."

The public sided with Robertson, too, and when the state Court of Appeals reversed the decision, the outcry was immediate. Within a year, Donald Trump’s home state of New York passed the first law in the nation to recognize a person’s right to control -- under certain conditions -- the commercial use of one’s name and representation, with criminal penalties imposed on anyone who appropriated those assets without prior agreement. Other states quickly followed suit, and the U.S. Supreme Court endorsed the idea in 1909.

But all of this, as Banner noted, “was not intended to help celebrities capitalize on their fame.” Instead, the laws were predicated on the idea of privacy, particularly the right that ordinary people possessed to protect themselves from the predations of advertisers.

Laws, of course, are rather malleable. A doctrine designed to protect one group in society can readily be expanded to benefit another, even if the motive for doing so is entirely different. And so it was with this new law on privacy. Celebrities eager to capitalize on the commercial value of their name soon filed suit under the new statutes. And legal theorists quickly endorsed the idea.

In an article published in 1913, the Michigan Law Review captured the emerging consensus: “Why should a stranger be permitted to appropriate the value which a party has, by his efforts and industry, caused to become attached to his name, any more than he can appropriate the value of a personal likeness, the writings of another, or trade-goodwill?”

In this new environment, advertisers foolish enough to appropriate the names and faces of the famous without their consent found themselves in court. More often than not, the courts sided with the celebrities. In the process, the law moved beyond the original preoccupation with privacy.

But it wasn't until a 1953 court opinion that the right of well-known public figures to earn money off their good name was codified. The case, Haelan Laboratories v. Topps Chewing Gum, involved two chewing-gum companies, each of which sold baseball cards with the pictures of athletes. Haelan had purchased the exclusive right to some of these images; Topps had used them without permission.

When the case reached the federal appeals court in New York, the judge upheld the existing consensus, declaring that the grant of a person’s name and likeness was an exclusive one, capable of being transferred to a third party (in this case, a chewing-gum company). This marked the end of a convoluted evolution in the law. Instead of the original “right to privacy,” the judge endorsed something new: a “right to publicity.”

Since that time, the right to make money off one’s name has only expanded. In Trump’s case, the value of his name is a complicated notion, resting on both the “right to publicity” as well as the more conventional foundations of trademark law (Trump has filed more 200 trademark applications, including Donald J. Trump, The Fragrance).

But the value of a name can change, depending on the fortunes of the person who stands behind it. It is not a solid, fixed asset. All of which begs an obvious question:  How much will the Trump name be worth after the election?

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Stephen Mihm at smihm1@bloomberg.net

To contact the editor responsible for this story:
Max Berley at mberley@bloomberg.net