President Donald Trump’s love of golf is siphoning away a huge portion of his already-dwindling wealth.
On Sunday, the New York Times published an astonishing report detailing Trump’s tax returns from a period spanning more than 20 years—elusive documents that have been considered a white whale for many a prosecutor and investigative journalist. Among the most eye-opening revelations were that the president paid just $750 worth of income taxes per year in 2016 and 2017, that his businesses have been operating at huge losses, and that he personally owes $421 million in loans over the next four years.
One of the biggest sinkholes contributing to Trump’s losses and debts is his numerous golf courses. According to his tax filings, the president has lost more than $315.6 million total since 2000 from his 15 golf resorts in the U.S., Ireland, and Scotland. Trump spent $150 million in 2012 to purchase his largest resort, the National Doral in Miami, and lost $162.3 million on the property over the next six years. He also has a $125 million mortgage due on it in the next three years. He lost an additional $63.6 million on his three golf courses on the British Isles. Since running for and winning the presidency, however, Trump has seen a revenue windfall for his golf properties.
But let’s get back to that $315.6 million in losses. Is it par for the golf-resort industry course to blow through that much money?
Golf courses have generally been a tough business over the past 10 to 15 years, so the owners I spoke to for this piece weren’t particularly surprised that Trump has been operating at a loss. There was a big upswing for the industry at the end of the last century, which led a lot of people to build courses, but the enthusiasm eventually waned, and supply has generally outstripped demand ever since. Trump notably bought his first golf property, the Trump International Golf Club in Palm Beach, in 1999. “An explosion in demand occurred in the late ’90s when the economy was booming and when Tiger Woods came into the game,” said Joe Hills, the developer and owner of golf courses in Illinois and Maryland. “Everything got overbuilt.” The economy also struggled, and golf became less a part of business networking. Hills estimates that the U.S. has lost somewhere between 7 million and 8 million golfers since 2007.*
Given these broader trends and challenges, actually making money from a golf course over the past two decades has generally meant being very lean with expenses, an attribute that Trump’s opulent properties certainly are not known for. Trump “puts more money into his golf courses than anybody I know,” said Mike Hatch, a golf consultant and owner of multiple courses in Virginia. “He’s buying distressed golf courses at a very cheap price and putting a substantial amount of money into them, so most of them are losing would be my guess.” Buying a property and shelling out a huge chunk of change for renovations—like palatial clubhouses, extravagant landscaping, and million-dollar waterfalls—likely means that a club will have to operate at a loss for decades until membership and initiation fees from high-end clientele catch up to the costs.
Hills and Hatch both posited that much of these golf course losses were likely due to depreciation, the decline in an asset’s value that comes with use and other ravages of time. “I do not know many of Mr. Trump’s [properties] personally, but the ones I have seen, he had invested millions to make them premier facilities, so I would have thought his depreciation was substantial,” said Hatch. Trump has long attributed his losses to depreciation whenever tidbits of his tax returns reached the press in the past. Yet, as the Times piece pointed out, “Depreciation, though, is not a magic wand—it involves real money spent or borrowed to buy buildings or other assets that are expected to last years. Those costs must be spread out as expenses and deducted over the useful life of the asset.”
After more than a decade of flagging demand, the golf course industry has been making a comeback over the past of couple years—thanks, in part, to the pandemic, since golf is one of the few sports safe under social-distancing guidelines. “We’ve been the only game in town for the last six months and everyone is coming in and playing,” said Hills. “We’ve never seen anything like this. We’ve been packed every single day.” The Times was not able to obtain Trump’s tax returns from 2018 and 2019, and 2020 is still in progress, so it’s unclear whether this bump has similarly benefited his properties.
Hills and Hatch think that the losses are big, but explainable. However, Adam Davidson, an economics writer for the New Yorker who’s reported on Trump’s businesses, has suggested that the president may have used his golf courses for something more nefarious. As Davidson laid out in a Twitter thread, Trump’s tax returns indicate that by 2011, he expended most of the funds he received from his father and from Apprentice producer Mark Burnett. At that point, Trump seems to have secured a new source of money, right around the time he started doing business with the likes of barons in Azerbaijan and was “flirting with Georgians and Kazakhs with ties to Putin,” as Davidson puts it. “All of these groups are—between 2011 and 2016—known to be laundering money through golf courses.”
Correction, Sept. 28, 2020: This piece originally misstated that the estimated number of golfers fell by 22 million to 23 million. It was actually 7 million to 8 million.