It’s been a mixed bag this week for Eastman Kodak, the storied camera giant that won a now-imperiled $765 million federal coronavirus drug manufacturing deal last month. An independent review commissioned by the company found that executives who cashed out by exercising stock options the day before the deal was announced likely acted legally. But the top watchdog for the agency behind the huge government loan also announced that it’s investigating the deal.
Since the late July announcement of a deal for Kodak to manufacture ingredients for COVID-19 drugs, much attention has been paid to the company’s substantial efforts to ingratiate itself with the Trump administration. And, it turned out, Kodak did dramatically ramp up its lobbying activities in the months prior, dropping an unprecedented $870,000 on its D.C. influence operation in the second quarter of the year. But the company had another unique and less well-known political asset: a longstanding business relationship with Donald Trump himself.
Throughout Trump’s career in reality television, Kodak paid for coveted—and expensive—promotional spots on NBC’s Celebrity Apprentice, securing the company on-air endorsements and product-placement deals that provided incalculable value for the struggling firm. Trump himself plugged the company on the air, and even used Kodak to illustrate business-marketing challenges in materials published by his now-shuttered Trump University.
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There’s no indication that any prior business relationship factored into the administration’s decision to award Kodak a nine-figure taxpayer-backed loan. But that relationship could help explain why Trump was apparently so enamored with the company, which he dubbed “one of the great brands in the world,” and why he got behind the decision to enlist a firm more commonly associated with cameras and film in such a consequential effort to combat the coronavirus outbreak.
Kodak’s work with Celebrity Apprentice began in the show’s seventh season, according to contemporaneous news reports. The company sponsored the full season, and was featured prominently in one episode, during which teams led by KISS frontman Gene Simmons and mixed martial arts fighter Tito Ortiz competed to create the best promotion for a Kodak print shop in New York.
"Anyone who has visited my office in Trump Tower will realize that I’ve had a long relationship with Kodak—there are pictures that go back for decades, especially of my parents, and my mother was big on family photos,” Trump said in a statement on the sponsorship at the time. “They had to be the best quality, so Kodak was a household name. I’m extremely pleased that Kodak will be the biggest sponsor of The Apprentice this season. We expect another tremendous success for everyone!"
It’s not clear precisely how much Kodak paid for its prominent billing on Trump’s show, but companies were reportedly lining up to shell out as much as $2 million per episode for the opportunity, The Hollywood Reporter noted at the time.
For its financial support of a show that was paying Trump himself as much as $3 million per episode, Kodak got tremendously valuable promotional billing at a time that the company was struggling to stay afloat. “Kodak was veering toward collapse, owing to the rise of digital photography,” The New Yorker reported in 2017. “But, on The Celebrity Apprentice, Kodak appeared to be a gleaming model of vigorous corporate muscle, a company that had ‘reinvested in digital.’”
The Kodak episode of Celebrity Apprentice aired in January 2008, at the beginning of a fiscal quarter in which Kodak would post losses of $114 million on revenue of just over $2 billion. Four years later, the company would file for bankruptcy protection.
But the Trump-led promotional efforts continued in the intervening years. In the final episode of Season Eight, Celebrity Apprentice contestants showcased a Kodak digital picture frame, marketed under its EasyShare brand of digital photo and printing products. In Season Nine, the promotion was even heavier: Every episode featured a “Kodak Moment.” At the end of the season, Trump said at the time, “I will personally be choosing my favorite moment at the end of the season, and I can assure you, it will be the Ultimate KODAK MOMENT.”
The company’s chief marketing officer even joined Trump on-air during one episode. The promo made Kodak the first company to sponsor three consecutive seasons of The Celebrity Apprentice.
The episode with Kodak’s CMO aired on March 21, 2009. Two days later, a new book hit the shelves, titled Trump University Branding 101: How to Build the Most Valuable Asset of Any Business. The book was written by Donald Sexton, a Columbia Business School professor whom Trump had handpicked to be an instructor at his now-defunct Trump University. Trump himself wrote the foreword.
A section of the book that examined Kodak seemed considerably less sanguine about the company’s prospects than Trump was in the context of his Kodak-sponsored reality-TV show.
“In many countries Kodak is synonymous with film. That is a powerful position while film is being sold—less helpful when digital cameras are becoming popular,” the book noted. “During one five-year interval, some publicly available brand equity estimates suggested that the value of the Kodak brand fell US$7 billion—a loss of about half the brand’s value. Managing their brand remains a crucial concern for Kodak.”
Brand management for Kodak has suddenly become an even more pressing problem. The stock options that its executives exercised immediately before its deal with the U.S. International Development Finance Corp. drew the attention of investigators with the Securities and Exchange Commission. Now the federal agency’s internal watchdog is investigating the circumstances that led to the award.
Though not generally thought of as a pharmaceutical company, Kodak manufactures a number of chemicals that it’s used to produce film and other products. In recent years, it’s used that capacity to manufacture pharmaceutical ingredients, and the hope was that it could supply crucial chemical components of coronavirus therapeutic treatments.
Accountable.US, a watchdog group, nonetheless pointed to Trump’s prior business arrangements with Kodak as a red flag that something improper may have occurred. “Kodak paid millions of dollars to sponsor Trump’s reality show career," said Kyle Herrig, the group's president, in an emailed statement. “Claims that the president had nothing to do with his administration’s effort to spend nearly a billion tax dollars transforming the company into a pharmaceutical giant is laughable. A thorough, independent investigation is clearly warranted.”
The federal loan isn’t completely dead, but it has been put on hold while the DFC conducts its own review of the award. “The company appreciates and supports the DFC’s decision to await clarification before moving forward with the process,” a Kodak spokesperson said of the move.
Trump, who initially took credit for the deal and hailed Kodak as “such a great name,” has since backed away.
“I wasn’t involved in it,” he said last month.
