Trump's campaign is bleeding cash. Here's why he could win anyway.

By Chris Matthews

The former president's finances have improved in recent days, but he remains far behind Biden in fundraising

Donald Trump has struggled to match President Joe Biden's fundraising pace, and much of the money his campaign and related groups have raised has gone to fund his legal defense in several criminal and civil trials in jurisdictions across the country.

The former president received some welcome financial news Monday, when a New York appeals court ruled that he could post a smaller bond of $175 million while he awaits a ruling on an appeal of a $454 million judgment against him for fraudulently inflating his net worth in business dealings with lenders.

In addition, Trump's stake in the parent company of his Truth Social network has ballooned to more than $5 billion after it debuted on the Nasdaq stock exchange, though how much of that wealth he'll be able to access before the November election is unclear.

The financial lifelines could help Trump at least temporarily avoid selling real estate and fire-sale prices to satisfy civil judgments against him. But his mounting legal bills could put him at a permanent fundraising disadvantage in his attempt to beat President Joe Biden in a November electoral rematch.

See also: Trump scores two financial victories with appeals-bond ruling and Wall Street stock listing

The Trump campaign and the pro-Trump SAVE America PAC reported raising a combined $15.9 million in February, ending the month with more than $37 million in the bank. Meanwhile, the Biden campaign raised $53 million and ended the month with $155 million saved, according to filings with the Federal Election Commission last week.

The Associated Press reported that a new fundraising agreement with the Republican National Committee will divert funds to the Save America PAC, which has paid Trump lawyers $76 million in fees over the past two years, before the RNC gets a cut.

How much does that financial disadvantage really matter, though?

The answer could be "not much," given Trump's unique political strengths and a fracturing media landscape that has diminished the efficacy of expensive television advertising, experts said.

"Donald Trump's personality and his campaign is sort of masterful at getting earned media attention, which is definitely not something that most candidates can take for granted," said Erika Franklin Fowler, a political scientist and co-director of the Wesleyan Media Project, which studies advertising in federal elections.

Fowler told MarketWatch that studies of the effects of political advertising suggest it only matters at the margin and has very little impact on how most Americans decide how to vote. Of course, campaigns are won and lost at the margin, which is why political campaigns seek to raise and spend as much money as possible to saturate voters with campaign messaging.

The efficacy of political advertising is further reduced the higher up a ballot you go, given that high-profile races like presidential contests typically feature candidates that are well known and for which it is easy for voters to glean information about them.

"Especially in a presidential cycle like this year, where we have two very well-known candidates, there's very little that advertising will probably do to change very many people's minds," Fowler said.

There's evidence that political advertising was particularly ineffective during Biden and Trump's first presidential contest in 2020.

Vanderbuilt political scientist John Sides told MarketWatch that he and his colleagues found no evidence of any diminishing returns to general election political advertising between 2000 and 2018, but that things changed in 2020.

"We didn't find any correlation between Biden's advantage over Trump and how well he did," Sides said. "Now, 2020 is a little weird. Biden's advertising advantage over Trump was massive ... perhaps there were diminishing returns simply because Biden's advantage was large. Or there could be other idiosyncratic features of that election" that diminished TV ads' effectiveness.

Complicating the analysis further is the fact that campaigns are spending more money than ever online, the effects of which are difficult for researchers to measure.

Trump's campaign made history in 2016 when it revealed that it spent half its advertising budget on digital ads, and the Biden campaign appears to be taking a page out of that playbook this cycle.

So far, Biden has spent $14.9 million on TV ads and $32 million on ads on Google (GOOG) platforms and Meta (META) platforms like Facebook and Instagram, according to an analysis by the Wesleyan Media Project.

Unlike with television ads, it's very difficult for anyone outside the campaigns and the digital platforms to understand the reach of digital ad spending - and whether and how these ads are effective at persuading voters to head to the polls.

The usefulness of campaign ad spending has been further eroded in recent years by a process of "calcification" of the electorate, according to Sides. His research has shown that political polarization combined with parity in the two parties' electoral strength has shrunk the number of persuadable voters to levels not seen in decades.

A calcified politics may mean a smaller share of persuadable voters, but it also results in elections won by razor-thin margins, increasing the value of each individual voter who may be influenced by advertising.

So while Trump's cash disadvantage may not matter much for the outcome of the election, don't expect the campaigns to let up on their fundraising and advertising efforts.

"From a campaign's perspective," said Fowler, "the worst thing you can do is have money left in your coffers the day after an election."

-Chris Matthews

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03-26-24 1216ET

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