David Dixon spent his working years dreaming of ways to turn his passions—art, sports, and his beloved hometown of New Orleans—into businesses. By 1961, he had built a prosperous life as an art dealer. As he looked at the landscape of professional football, with its short fall season and relatively small number of cities with teams, he saw an opening for a new league that would play in the spring. He hired a market research firm, which found support among football fans for spring ball. Armed with data, Dixon traveled the country pitching wealthy men on the merits of spending money to start a league and own a team.
A convincing salesman, Dixon had great success signing potential owners. But he hit a wall trying to secure a broadcast contract with any of the three national networks, so he dropped his plan for spring football. In the coming years, Dixon helped secure an NFL expansion slot for the New Orleans Saints, served as a leading figure in the construction of the Louisiana Superdome, and cofounded the World Championship Tennis tour.
Then, in 1979, he saw a new opportunity for his old idea. The introduction of cable television created scores of new stations, including a twenty-four-hour sports channel called ESPN. Dixon went on the road again, convincing wealthy men to buy a team for $6 million each. His travels led him to the doorstep of a young developer who, although he was then working on his first new building in Manhattan, had been identified in New York newspapers and on television as extremely rich. Donald Trump attended several meetings with other prospective owners. But he backed out. He was in the middle of trying to buy the Baltimore Colts of the NFL. Dixon hired a media broker, who secured a contract with ABC to broadcast seventeen games in each of the first two spring seasons for a total of $18 million. ESPN soon followed with an $11 million deal. Those figures looked tiny compared to the $2 billion deal the NFL had just signed with the networks. But the numbers were big enough to schedule opening day in the spring of 1983.
Dixon advocated a slow and steady buildup, with teams keeping salaries in check as revenues increased. The owner of the New Jersey Generals franchise, Oklahoma oilman J. Walter Duncan, did not completely abide to that guidance. He pushed the Generals ahead of many teams in signing a three-year, $5 million contract with Herschel Walker, the running back who had won the Heisman Trophy at the University of Georgia and still had one year remaining of college eligibility.
In the league’s first season, television ratings and ticket sales exceeded expectations. Teams fielded talented players, most of whom had been overlooked by the NFL. A style of freewheeling play emerged, with spontaneous lateral passes and bombs that lent shock and more excitement to a game that had grown predictably precise in the NFL.
But for Duncan, that first season proved too demanding. He grew weary of traveling from Oklahoma to a different city every week, so he asked Jimmy Gould, a young man who had worked with several teams during the league’s formation, for help finding someone to buy the New Jersey Generals.
Gould turned immediately to the guy everyone said was rich but who had refused to buy a team in the first year. Donald Trump by then had been rebuffed by the Colts, as he had by the Dallas Cowboys and other major sports teams. Gould eventually reached Trump on the phone and made his pitch: become the owner of the New Jersey Generals for only $8.5 million. A cheap way to get into the game.
“Get to New York,” Gould remembered Trump telling him.
On a September day in 1983, a crowd of several dozen reporters and photographers assembled in the atrium of the new Trump Tower, waiting for what had been billed as a major press conference. An aide passed out biographical information about the proprietor to reporters. All eyes veered upward as Donald Trump, wearing a dark blue suit, a blue-and-white striped shirt, and a dark tie, appeared at the top of the escalator for a smooth glide down to his shiny marble-and-brass lobby. He walked to a podium in the shape of a T and announced what everyone there already knew: he had purchased the New Jersey Generals of the United States Football League. He had committed to pay about $10 million for a team that had lost $3 million the year before and said he would spend whatever it took to make the team the winner. “We’re really not doing this as an economic venture,” he told reporters. “I would really like to be an exciting owner.”
With the purchase, Donald left behind the self-restraint and personal and financial discipline that had been the hallmarks of his father’s career. He entered a period of frenzied acquisitions, assembling an eclectic conglomerate untethered from any core competency. He had completed just a couple of successful projects, both with more experienced partners, in the profession that had been the focus of his entire life. Almost overnight he saw himself as capable of running any type of business.
“What I like is for people to tell me that something can’t be done, when I think it can,” he told The New York Times.
“They read that the Grand Hyatt would never be built, but it was,” he told Sports Illustrated. “They read that Trump Tower would never be built, but it was. Now they see me buy a football team. They’re gonna believe.
“When I want something, I want victory, completeness, results,” he added.
Three months after buying the Generals, Trump appeared on a panel for major New York–area sports team owners. He sat on the dais with Fred Wilpon, who had won the bidding for the New York Mets that Trump had lost, and George Steinbrenner, the owner of the New York Yankees and most recognized sports team owner of his era. Steinbrenner’s face and latest comments regularly graced the sports pages of the city’s newspapers, most recently for firing his manager, Billy Martin, for the third time. During the panel discussion, Trump described his league as at war with the NFL and said he welcomed a coming “bloodbath” over players. That position was too provocative for even a famous provocateur like Steinbrenner. “War is not a good thing,” Steinbrenner said in response. “I’d worry about getting this thing together.”
Trump’s purchase of the team spawned a wave of profiles in major newspapers and magazines and on television shows. He began appearing as a commentator during broadcasts before NFL games. He generated more media attention by offering Don Shula, the legendary Miami Dolphins coach, a $1 million contract, which Shula rejected. He publicly vowed to lure Lawrence Taylor, the All-Pro linebacker, away from the New York Giants, which never happened either.
George Young, the Giants general manager, described Trump’s promises as more like “what he’d like to do as opposed to what he’s doing.” Young presented a test to news organizations that most would fail for years to come. “Donald Trump can say what he wants to say. It’s up to you [the media] to decide how credible he is.”
Breaking with Dixon’s plan to keep costs down while building a following for the league, Trump signed several NFL players at greater salaries than the NFL was willing to pay, most notably Gary Barbaro, the safety for the Kansas City Chiefs with three Pro Bowl appearances, and Brian Sipe, the onetime MVP quarterback for the Cleveland Browns. Sipe’s new two-year contract would pay him $1.9 million, about double the Browns’ offer. Before the year ended, Donald had signed four other NFL players, as well as Walt Michaels, the former coach of the New York Jets, to a three-year deal worth $500,000.
He quickly set the upstart league on a collision course with the NFL. On January 17, 1984, four months after he bought the Generals, he wrote a letter to his fellow owners saying that the USFL would be “foolish” to keep playing in the spring. He revealed what some owners began calling his grand plan to trick the NFL into converting their lesser teams into full NFL franchises through a merger. “If we expect the networks to pay us a great deal of money for a period where there is a small television audience, then we are being foolish,” he wrote. “The N.F.L. knows this and are just waiting. Their only fear is a switch of our league to the winter—an event which will either lead to a merger, or, in the alternative, a common draft with a first-class, traditional league.
“I did not come into this league to be second rate,” he continued. “We are sitting on something much bigger and better than most people realize. We had better get smart and take advantage of it.”
The more direct interpretation might have been that there was a smaller television audience for spring football not because of some inalienable seasonal limitation but because it was a new idea with mostly unknown and unproven players. There was never any evidence that the NFL, with its massive television contracts and control of stadiums in major cities, was cowering at a clearly second-tier league. It had fended off two other alternative leagues in the prior two decades.
The letter did encapsulate what became Donald Trump’s three-step rhetorical style, a pattern so predictable and unique it could be branded “Trump Logic.” First, he confidently makes an assertion that often oversimplifies or ignores the truth of the matter. He builds upon that soft foundation with an act of clairvoyance, claiming to know what large groups of people fear, or at whom they laugh, as proof that his original assertion was true. Finally, he closes the deal by making clear that disagreeing with his un-facts or his psychic vision is prima facie evidence of stupidity.
The day after Trump sent his letter to fellow owners, they all assembled in New Orleans for a league meeting. In a conference room at the Hyatt Regency Hotel, Trump set out to persuade everyone to move their schedule to the fall and go head-to-head with the NFL. “People don’t want to watch spring football,” he told them, a bald-faced assertion for which he provided no evidence. He assured the assembled owners that he could singlehandedly control the business of sports broadcasting.
“I guarantee you folks in this room that I will produce CBS, and I will produce NBC, and that I will produce ABC, guaranteed and for a hell of a lot more money than the horseshit you’re getting right now,” he told the football executives. He pitched the outcome of the war he wanted to wage as sealing the inevitable legacy of every owner, especially himself. “I don’t want to be a loser. I’ve never been a loser before. And if we’re losers in this, fellas, I will tell you what, it’s going to haunt us…Every time there’s an article written about you, it’s going to be you owned this goddamn team which failed…and I’m not going to be a failure.”
As he had with his prior project, Donald gave Ivana a visual design role with the football team: uniforms for the cheerleaders. She worked with a fashion designer to come up with an outfit she described as “partly Star Wars, partly military type.” The top bore three bars of color across the front, epaulets on the shoulders, braided rope, and cowgirl boots.
Ivana was also traveling to Atlantic City periodically to review interior-design choices for the coming Trump casino in partnership with Harrah’s. And she was nine months pregnant with their third child. She scheduled an appointment to induce labor late on a Friday, hoping to miss as little work as possible. A boy, whom they named Eric, was born in the early evening of January 6, 1984.
She missed only five workdays. On the Sunday nine days after Eric’s birth, she and Donald appeared together in the lobby at Trump Tower at a private event staged to bring attention to the football team. A panel of judges would select thirty young women from a group of finalists to become the Generals’ cheerleading squad, a job that paid thirty-five dollars per home game. The young women who tried out wore tiny and tight red leotards with sashes bearing the team’s name and danced to a playlist heavy with Michael Jackson songs. The judges added to the surreal atmosphere: LeRoy Neiman, the famous painter of the sports world with a mustache as subtle as a warthog’s tusk. Joey Adams, the seventy-three-year-old comedian who got his start in vaudeville. And, as if to make the whole thing seem like an absurdist commentary on the links between celebrity and culture, the artist Andy Warhol judged the unknown fame seekers through his bush of white straw bangs.
Waiters served caviar sandwiches on silver platters. An eight-foot-long floral football, covered in red carnations and white daisies, rested on a podium. A man wearing a kilt played a bagpipe from the top of an escalator.
“This is a natural place for the tryouts,” Ivana said during the event. “We have a lot of charity dinners and other parties here.” It was true that the Trumps frequently closed the atrium for private events. And each time they did, the cheerleader tryouts included, they broke the agreement Donald had signed with the city. The atrium was a public space that Donald used as a private banquet facility.
Trump Tower had become not just his base of operations but his place for everything. He lived on the top three floors and commuted to his office on the twenty-sixth floor. He frequently ate at the restaurant in the lobby. His parents, Fred and Mary, came in from Queens for lunch and a visit at the restaurant. Trump gave his parents an apartment in the building, should they want to stay in Manhattan after a visit, which they said they never did.
Ivana and the influential interior designer they hired, Angelo Donghia, had just completed work on their seven-bedroom apartment. The look reflected Donghia’s signature mix of understated elegance and comfort. Donald described it as “warm modern” and told Architectural Digest that they “wanted it decorated as an important apartment.” The shimmer and shine of the tower’s public spaces could be found in the residence as well. The living room featured a marble fireplace and windows nearly twenty feet high, leading up to a gold-leafed ceiling. Some pieces were upholstered in understated neutral tones, others in gold-painted fabric. The stairwell was lined with bronze mirrored panels and brass handrails. Their bedroom was bathed in the “feminine” feeling Ivana requested, with peach-pink mirrors and peach-colored suede walls. On the top of the three floors there were bedrooms for each of their three children, along with a second kitchen and dining room. There was a separate bedroom for their two nannies, both Irish-born women who worked alternating shifts.
Millions of dollars had been spent on the renovation. Donald publicly spoke of the importance of the design. He had gone along with the decisions as they were presented to him on paper. But in the end, he did not like what he saw. He would soon order a complete redo on the décor, which he came to see as insufficiently glitzy.
While Ivana worked to win his approval for her design savvy and substance as a businessperson, there were signs that Donald had soured on the marriage. Out of public view, he ordered changes to the prenuptial agreement that Roy Cohn had crafted prior to their wedding. Now, should they split, he would be the sole owner of the triplex, and she would own the mansion in Greenwich. Ivana would also receive a lump sum of $2.5 million.
The evening of the cheerleader finals, Donald and Ivana were featured on the second special of Lifestyles of the Rich and Famous, hosted by Robin Leach. The opening sequence presented the show’s signposts of extravagance: a country estate, a yacht, a helicopter, and a jet, and young women in bikinis. The five-minute segment on the Trumps began by introducing him with the wrong middle initial: “Rome wasn’t built in a day,” an unidentified announcer said. “But it might have been, and at a handsome profit, if this man lived there. Donald S. Trump, head of a billion-dollar real estate empire.” The scene cut to Donald, sitting at his desk in Trump Tower with a window behind revealing treetops across Central Park. He earnestly introduced himself to viewers using a phrase similar to the one he had used two years earlier to introduce himself to his new business partners at Harrah’s: “At an age of thirty-seven, I don’t believe anyone’s really ever built more things than we have, in terms of the business that I’m in.”
Donald would make recurring appearances on the show. Leellen Patchen, a director on Lifestyles for its entire run, later recalled that Trump, unlike most people they approached in the business world, could always be relied upon to open his life to the show’s prying cameras and say things that would make viewers’ heads snap. “Trump made great TV,” she said. “Great TV to me is something people will watch and go, Oh, my gosh, did that really just happen? Or, did he just really say that? Or, does he just really have that? You know, it’s excesses.”
During that first appearance, Donald described a business philosophy that the show dubbed “Trump’s Money-No-Object Motto.” He posited that any amount he spent to create a business would generate an even larger increase in revenue. “I believe in spending extra money,” he said. “I believe in expending maybe more money than other people would think almost rational. Because in the long run you’re talking about a very small difference in terms of the money spent, but you’re almost guaranteeing success.”
One USFL team owner emerged as the leading foil to Donald’s plan. John Bassett, owner of the USFL’s Tampa Bay Bandits, believed in David Dixon’s model of growing expenses only as revenue increased. Bassett had owned a team in the World Football League, which had failed in the 1970s in large part because it could not compete with the NFL for television contracts, and he was not looking to repeat that failure by rushing things. The payroll of his entire team was less than Herschel Walker’s contract.
Bassett had always been passionate about sports, having played four sports in college and been a local squash champion in Ontario. He had been born to wealth, the son of a Canadian media mogul and sports team owner, but never hid that fact. He went on to produce films and own a cable television network, along with several other professional sports teams in Canada. But he came away from those experiences with an entirely different approach to business, and publicity, than Donald Trump.
In October 1983, he wrote a letter to his fellow owners warning that salary escalation had reached “a point where our biggest market could not break even if it sold out every seat.” It was a business “structure that strangled us financially and took our fate out of our own hands.”
Bassett was not alone in that view. Another owner, Tad Taube of the Oakland Invaders, also warned that inflated spending on salaries threatened the league’s existence. “If we are not successful in establishing player caps,” Taube wrote in a letter to other owners, “I can guarantee that there will not be a USFL within three years, irrespective of improved television revenue.” He concluded by saying, “We have sighted the enemy, and they are us!”
As frustrated as he grew with what he saw as Donald’s undisciplined approach, Bassett became just as exasperated with the news organizations that broadcast his every utterance. As a young man, Bassett had worked at a newspaper owned by his father, becoming the third-generation newspaperman in his family. He read The New York Times with a mix of awe and anger on April 15, 1984. An article on the front page of the sports section quoted an unidentified league executive who announced that “people who control the league” had made “an executive decision” to move the USFL to a fall schedule. Bassett, identified in the article as a member of this amorphous grouping, knew it was entirely untrue.
“The New York Times is supposed to be the most respected newspaper in the world and all they listen to is Donald Trump, who has duped them,” Bassett told The Sporting News. “[The story] is absolute nonsense. I hate to see [the Times] used by a con man. It upsets the hell out of me. Donald Trump is trying to manage the news and browbeat the rest of the owners in this league. In the end, his philosophical view may be correct, but his tactics stink. At this point there is absolutely no basis to [the story] whatsoever.”
“We haven’t even come close to considering something like that,” Myles Tanenbaum, owner of the Philadelphia Stars, told The Sporting News. “It’s not even responsible to talk about it. The guy who came up with the idea is wonderful. He never lets himself become encumbered by facts.”
Around that time, Trump rented a room at the Pierre hotel in Manhattan, four blocks uptown from Trump Tower, for a meeting with Pete Rozelle, the commissioner of the NFL. The meeting remained a secret for several years. Rozelle, who took notes, said Trump issued a passive threat to file an antitrust lawsuit against the NFL unless he was granted an expansion NFL team in New York. If that happened, Trump said he would “find some stiff” to buy the Generals and drop any lawsuit plans.
When asked about the meeting later, Trump presented an opposite account. It was Rozelle who offered a sort of bribe: keep the USFL on a spring schedule, drop the lawsuit plans, and I’ll get you an NFL franchise. Trump’s account did not comport with the agreed-upon facts: it was Trump who set up the meeting; and Rozelle did not have the power to award an NFL franchise. That would have required approval of twenty-one of the twenty-eight team owners. The two did not reach an accord.
Despite what Trump had told the Times, less than half of the owners supported his plan. The USFL hired McKinsey & Company, a leading management consulting firm, to explore the potential risks and rewards of moving to the fall. It was the type of standard business process, consulting with experts, that Donald Trump increasingly did not respect.
In August 1984, after the end of Donald’s first season as an owner, Sharon Patrick of McKinsey presented the findings to the league owners during a meeting at the Hyatt Regency Hotel in Chicago. She urged a measured path, keeping costs in line with revenues and the schedule in the spring, through at least the 1986 season, and not considering a major change to the fall until at least then. She added that the market research study had found that the public disputes between the owners over when to play and spending on players had created doubts in the minds of fans about the league’s long-term prospects. Taking on the NFL, she said, would spell near certain death for the league.
Once Patrick left the room, Trump told the owners that the McKinsey report was “bullshit.” Move to the fall now, he said, or he would likely bail out and take all the attention with him. He assured them again that rich television contracts were a sure thing. Several, including John Bassett, thought McKinsey’s cautious plan made sense. But with several clubs in financial trouble after spending money on players to keep up with Trump, enough owners bought into Trump’s mix of threats and promises to vote in favor of moving to the fall in 1986.
Despite Trump’s promises, the television networks vowed only to take a look when, and if, the USFL finalized its plans for a fall schedule. ABC made clear that the move would jeopardize its contract with the league. “We don’t think it makes sense to go head-to-head with the NFL on Sunday afternoons,” Jim Spence, the ABC Sports senior vice president, told the Times.
Trump pushed for one final move, hiring Roy Cohn to file an antitrust lawsuit against the NFL and perhaps the three national television networks. It was not a novel idea. The NFL had been sued, unsuccessfully, under antitrust laws by the upstart American Football League in 1960 and the new World Football League in 1979. Both lawsuits failed. Trump was sure this time would be different.
Cohn called a news conference to announce the lawsuit at the Upper East Side townhouse that served as both his home and his office. He and Trump both wore red-and-white-striped shirts and sat next to each other on a sofa while speaking to reporters. Cohn, his sun-leathered skin taut around squinty eyes, accused the NFL of operating a “secret” committee “created exclusively for the purpose of combating the USFL.” Extracting the menace from those words left the plain meaning that the NFL was running a competitive business. Trump told reporters he was sure that the NFL was “petrified.”
“If you are going to play football in the spring, you cannot get the monies necessary to make it an economic, to make it a viable, a really viable enterprise,” Trump told the assembled reporters. “So, we have to go into the fall. We go into the fall and what do we find? We find the NFL is on all three networks.”
Trump could have discovered that fact by buying a copy of TV Guide instead of a football team. Yet he continued to spend without any apparent concern about the need for increased television revenue. After being knocked out of the 1984 playoffs in the first round with Brian Sipe as quarterback, Trump pursued an even bigger deal with Doug Flutie, who had become a national sensation in his senior year at Boston College with a Hail Mary pass in a nationally televised game. At five foot ten, Flutie was generally considered too small for the modern NFL. But Trump signed him to an $8.2 million contract over six years, with the first two guaranteed.
In the 1985 season, Flutie struggled in his early games. A reporter from UPI received an unsolicited call from one John Baron, Donald’s alter ego, complaining that other USFL owners had not come through on a verbal promise they had made to cover part of the cost of Flutie’s contract. “When a guy goes out and spends more money than a player is worth, he expects to get partial reimbursement from the other owners,” Baron said. “Everybody asked Trump to go out and sign Flutie…for the good of the league.”
The wire story ran in newspapers across the country. Other owners scoffed at the idea and said they had never been asked to cover Trump’s costs, and they would not have agreed if they had been. Flutie, for his part, was not pleased at being called overpaid. Donald called reporters again, this time in his own name, to complain that his man John Baron had been misquoted: Donald wanted the money from the other owners, but he had not overpaid for Flutie.
Following up on the Flutie stories, Bob Sansevere of the Minneapolis Star Tribune called Trump’s office and asked to speak with John Baron. He noticed that Baron’s voice was “shockingly similar to Trump’s.” He called back to check the basic facts and was given three different spellings of the name Baron. One secretary told him Baron had only recently been hired and another said he had been with the company “a long time” and “absolutely” exists. Sansevere wrote a brief story pointing out that no beat reporters had ever seen Baron and suspected the name was “an alias Trump uses.” But the local story received no national coverage. It caused no moment of shame for Donald, no moment of reputational reckoning. He would continue hiding behind the name for years to come with impunity.
The league was now running with Donald Trump’s playbook. The lawsuit, Trump’s final gambit, would need to produce a win before the league spent itself into oblivion.
As he pushed to change professional football, construction on the casino neared completion. He had signed off quickly on the design by Alan Lapidus, a design that broke with tradition by locating the casino on the second floor, making it not the first thing arriving guests would see. The silhouette of the casino resembled a white shoebox with a narrow thirty-nine-story hotel tower rising at one end. On the boardwalk side, the windowed walls tilted back at staggered angles, creating a glass pyramid for the first few floors. The tower had a saw toothed design similar to Trump Tower to maximize ocean views from the 614 hotel rooms. The day he first saw the sketches in Lapidus’s office, Donald quickly blurted out what was becoming a signature phrase: “Don’t change anything.”
His company’s payroll, overseen by his father’s accountant in Brooklyn, would remain small even as he took on another large-scale project. He chose a big construction company, Perini Corporation, to build the casino, and then hired a dozen temporary construction managers to watch over Perini. He relied heavily on his brother, Robert, to be a regular presence at the site. As at Trump Tower, Ivana would be involved with interior-design choices. And the gaming floor and lobby would be dominated by shiny surfaces. Harrah’s executives began referring to the Trump aesthetic as “brass, glass and class.”
Harrah’s booked big-name entertainers, including Sammy Davis Jr. and Bob Hope, for the 750-seat showroom to fill the casino in the first couple of weeks. An enclosed catwalk had been built connecting the gambling hall to the giant old Atlantic City Convention Center next door. For the grand opening in June, Harrah’s rented the convention center for three nights and booked Neil Diamond, the singer-songwriter whose eight prior albums had each gone platinum. The 17,000-seat arena sold out for all three nights, guaranteeing a rush of potential gamblers.
Diamond had enough hits in his pocket to bring down the house—“Sweet Caroline,” “Cracklin’ Rosie,” “Forever in Blue Jeans.” He opened with “America,” a pean to immigrants:
Far,
We’ve been traveling far,
Without a home,
But not without a star
Holmes Hendricksen, Harrah’s director of entertainment, looked out across the floor of the barrel-roofed hall, thumping from the power of Diamond’s voice and his eight-member band. He saw thousands of fans singing and dancing along. A success, he thought. He expected that Harrah’s partner, Donald Trump, who would receive half the profits without performing any further work, would be pleased as well. But when he found Donald and Ivana watching the performance, Donald’s face was knotted in a scowl.
“How much is this fucking guy costing me?” Trump shouted above the music.
Trump had expressed anger with his partners over the last month. The casino’s soft opening in mid-May, tightly controlled by casino regulators, revealed problems with the operation of slot machines. Regulators would not let all 1,734 slots open for nearly a month, resulting in the loss of millions in potential revenues. The opening of large casinos rarely came off perfectly, but Donald used the blip to attack Harrah’s management abilities and set the stage for a potential breakup.
Though he was willing to spend any amount to bring attention to his football team, and described almost irrational spending as his business model on Lifestyles, Donald would object to almost all spending by his partners on the Plaza casino. Satre, Harrah’s gaming executive, pushed Donald to meet his commitment to build a parking garage with thirty-two hundred spaces on land Trump controlled across the street from the casino. The Plaza was intended to attract higher-end gamblers, and Harrah’s had the lower-end bus crowd covered at their other Atlantic City casino, in the marina area about one mile away.
Just as with the McKinsey report on the USFL, Donald showed contempt for Harrah’s market research. Darrell Luery, Harrah’s general manager at the Plaza casino, regularly showed Donald the company’s research. Harrah’s knew their customers’ net worth, how many minutes they were likely to spend gambling, even the intervals at which they would take bathroom breaks. “We would get into a certain amount of detail, and he would dismiss it,” Luery remembered years later. Donald would say, “Never mind that crap,” and change the subject.
Under the partnership agreement, Donald and Robert had no voice in operational matters other than the approval of budgets. From Harrah’s perspective, there was no reason for them to be on-site once construction was completed. But they were both there. And Donald complained. A lot. He would even complain when he learned a gambler had been on a winning streak. In his mind, that represented lost money, not the cost of running a casino. He complained because eighty-five suites built with amenities aimed at high rollers were often sitting empty, but he refused to build the parking lot that might help fill those rooms. He complained about Harrah’s plans to spend more on services to make the casino stand out in a marketplace that had quickly grown competitive. The Plaza was the city’s tenth casino, and three more were under construction.
Donald grew increasingly frustrated with the Plaza casino barely breaking even month after month, while he read that Harrah’s Marina was recording significant profits. He began demanding that Harrah’s somehow push their Marina customers to instead go play at the Plaza. Satre made clear that would not happen. “That caused a lot of, how do I put it, angry responses from him and disagreements over how the properties should be run,” Satre later recalled. “He didn’t want to do what was necessary in order to be competitive, and from a standpoint of both wages, but also product and the customer’s experience.”
Robert periodically tried to smooth things over. Luery met with Robert Trump at least weekly and considered him “a lot more calm and reasonable” and “a joy” to be around. Unlike his brother, Robert saw the value in the extensive research that a large public corporation can pull together about the marketplace and its customers. But, ultimately, Robert answered to his brother. During one lunch at the casino, Robert suggested that Donald deserved as much attention from the Holiday corporation as the company devoted to all its other shareholders combined.
In October 1984, Harrah’s agreed to rechristen the casino without its name, as Trump Plaza Hotel and Casino, ostensibly to help eliminate any possible confusion among customers between the Plaza and the Harrah’s Marina casino a mile away. Some confusion would remain. The original $500,000 sign that read “Harrah’s at Trump Plaza” would stay atop the building for months. The slot machines would carry the Harrah’s name, though the cocktail napkins would bear only the Trump brand. None of it would assuage Donald. He repeatedly accused Harrah’s, considered to be one of the best-run casino companies in the industry, of tarnishing his name, which he had for several years been referring to as something that added value to everything it touched. Someone identified only as an “associate of Trump” told The Philadelphia Inquirer: “He built them a Lamborghini and they didn’t know how to turn the key. And his name was on it. And his success is his name.”
Satre and other Harrah’s executives came to believe that Trump, who had once recognized that he needed their expertise to get the casino up and running, now wanted to become a major casino figure on his own, something he thought would not be possible as a second to Harrah’s. So he began undermining the partnership as soon as construction ended.
Satre traveled to New Jersey for a meeting with Trump at the new casino. With staff members watching, things quickly devolved into a “vicious argument” about money. Both wanted the Plaza positioned as a higher-end casino, but Trump loudly refused to approve any expenditures. He still refused to build the parking garage.
As Trump battled with his partners at Harrah’s, the Hilton corporation was putting the finishing touches on another Atlantic City casino and hotel directly across the street from Harrah’s casino in the marina district. But the Hilton corporation, one of the country’s premiere hotel companies, was having trouble obtaining a license to operate. The Casino Control Commission, which was created to keep the mob out of Atlantic City, raised questions about Hilton’s thirteen-year business relationship with Sidney Korshak, a lawyer, on labor issues. Government reports had described Korshak as a senior adviser to organized crime groups in several states, though he was never formally charged with any crime.
After examining the relationship, the commission’s investigative arm, the state’s Division of Gaming Enforcement within the Attorney General’s Office, recommended that the commission grant Hilton’s application, and the commission’s chairman followed suit. But two commissioners refused to go along, and in February 1985 the Hilton application was denied, just as the company’s $308 million casino neared completion. In the history of the commission, it was the only time that it had denied a license to a publicly traded corporation.
It was a tremendously lucky break for Donald Trump. Hilton needed to sell its new casino, and quickly. Donald’s license to operate in Atlantic City meant he was one of the few people in the world who could buy a casino without risk of being denied. Some other casino operators were slowing down out of concern that it was not clear how many more casinos Atlantic City could support. Donald sped up.
The Hilton company and Donald negotiated a deal in ten days. Trump agreed to pay $320 million. He put in no cash of his own. He funded the purchase with $351.8 million in bonds, which brought him only $300 million after the expenses of issuing the bonds. He put everything else he owned up as collateral. Another $50 million from a bank loan covered the rest of the purchase price and other preopening expenses. The high interest rate of 13.75 percent on the bonds meant interest payments of $40 million a year, plus interest on the bank loan—big bills to cover. And that problem would grow in 1990, when Trump would also have to start paying back the principal on the bonds.
Satre called Donald, concerned about what this new hotel would mean for their partnership at the Plaza. He asked Donald what he intended to call the new hotel, and he warned Donald that placing the Trump name on the hotel would violate his partnership contract with Harrah’s.
“I wouldn’t do that to our partnership,” Satre later remembered Trump saying.
But he did just that. He soon announced that he would call the new casino Trump Castle. He wrote Satre a letter striking a very different note than he had on the phone. “The Trump name has been so badly bloodied by your management of the facility,” Trump wrote, “that hopefully Trump’s Castle Casino Hotel can do something to bring it back.”
On the day the Castle opened in June 1985, Trump’s partners at Harrah’s sued him for breaching a noncompete clause. Satre complained that Harrah’s had already spent $8 million promoting the Trump name in Atlantic City, and now Trump was opening a casino that would compete with Trump Plaza, in addition to their Marina casino across the street. Trump countersued, arguing that the problems with the slot machines at the Plaza opening, and a small outbreak of salmonella poisoning among customers, threatened to damage his name. He now spoke of his name as a product of great worth, portable to any sort of business.
“I have created the value that exists in my name by investing an enormous amount of skill, time, energy, effort and resources in developing highly successful and highly publicized real estate and other business ventures that have made the name Trump famous and synonymous with me,” he wrote in an affidavit.
He increasingly saw no value in working with partners, or in heeding the advice of others, whether prominent business consultants, experienced sports team owners, or executives with one of the best-run hotel and casino companies in the world.
A year after finishing construction on the Plaza casino, and having never run a casino on his own, he had taken on enormous and expensive debt in buying the Castle. If he prevailed in the lawsuit with Harrah’s, he would have to come up with hundreds of millions of dollars more to buy them out, a further gamble on his unproven operational abilities. And none of that had very much to do with developing real estate, his primary area of expertise.