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'The Indicator from Planet Money': The U.K.'s most famous family firm in crisis


The British royal family is often called the firm. It is arguably one of the U.K.'s biggest brands. How is that brand doing having been battered by scandals, including the exit of Prince Harry and his wife, Meghan Markle? Stacey Vanek Smith at The Indicator From Planet Money has been looking into the finances of the royal family, along with NPR's London correspondent, Frank Langfitt. Here they are.

STACEY VANEK SMITH, BYLINE: In Britain, people refer to the royals as the firm, and that is because the monarchy is a family enterprise with a support staff, which includes everything from press secretaries to engineers. And keeping the firm running costs hundreds of millions of dollars a year. Expenses range from, you know, new boilers for Windsor Castle to travel on the royal train. And a lot of that money comes from taxpayers. Some of it, though, comes from these huge property portfolios called the duchies.

FRANK LANGFITT, BYLINE: Yeah. So in order to make sense of all of this, I met up with this guy named David McClure. He wrote a book called "The Queen's True Worth."

DAVID MCCLURE: An awful lot of rubbish is written by the royal family. There are a lot of things that are just made-up half-truths. The thing about finances is that they're objective.

VANEK SMITH: So the queen draws funds from a couple of big sources. One of them is called the Sovereign Grant, which is based on the earnings of a collection of properties known as the Crown Estate.

MCCLURE: It includes Regent Street in the heart of London, but it also includes horse racing grounds and a lot of the offshore Britain where, at the moment, they're building wind farms on it. So it's a very lucrative part of real estate.

LANGFITT: Now, the British taxpayers, they provide the queen with the equivalent of 25% of the Crown Estate's annual profit. That comes out about $115 million a year. Royals help bring in a lot of money in palace ticket sales and foreign tourism, but they're also something of what we would call a cost center in that many of the firm's functions don't directly generate revenue.

VANEK SMITH: The royal family's other big money machines are the two duchies, those property portfolios that we talked about. The first is the Duchy of Lancaster. It includes more than 70 square miles of farmland, a private airfield, 10 castles and two acres of prime London real estate, including the land beneath the Savoy Hotel. Altogether, the duchy generates about $30 million a year for the queen. And the monarchy seized most of this land way back in the 13th century from a rebel baron who tried to topple the king.

MCCLURE: In many ways, the queen shouldn't own the Duchy of Lancaster. It really should be owned by the state. But because it's gone on for so long and it's embarrassing, no one has done anything about it. You know, it's a cash cow.

LANGFITT: And, Stacey, as of this year, the net assets of the duchy - more than $760 million.

VANEK SMITH: That is a lot of money for a family to have.

LANGFITT: And that's not all. The second property portfolio is the Duchy of Cornwall, which includes 130,000 acres of land, net assets of nearly $1.3 billion. And it provides about $27 million annually to Prince Charles.

VANEK SMITH: So, OK, that is the funding. So let's talk about the function. The queen, of course, is the head of state as opposed to Prime Minister Boris Johnson, who is the head of the U.K. government. A lot of people in Britain, of course, do not like Boris Johnson, and so they are very happy to have the queen represent the country to the wider world with her very distinctive royal brand.

LANGFITT: Do you think she's been a good steward of the brand?

MCCLURE: I think she's been an excellent steward of the brand. I think history will regard her as one of the most successful monarchs of all time.

LANGFITT: Her kids, though, they're another story. The divorce from Princess Diana still shadows Prince Charles 25 years later. His brother, Prince Andrew, was forced out of royal duties in 2019. A woman says she was forced to have sex with the prince back when she was 17, which he denies. All of this is connected to Andrew's friendship with the late sex offender Jeffrey Epstein.

MCCLURE: There have been an awful lot of scandals that have really diluted the brand, so if the rationale of the royal family is to be a model of good behavior, it hasn't done very well.

VANEK SMITH: Still, the polls show that most British people support the monarchy. Celebrity is part of the attraction.

LANGFITT: But, Stacey, the queen, of course, is not going to live forever, and people wonder if Prince Charles can keep the firm going after she's gone.

VANEK SMITH: And unlike Elizabeth, who became queen in her 20s, Charles is already 73.

LANGFITT: And, Stacey, there's one more worrisome indicator. The queen pulls considerably higher than the monarchy itself.

MCCLURE: People who aren't necessarily monarchists say, I'm a queenist (ph). People have been not supporting the monarchy. They've been supporting the queen. And so when she dies, there'll be an enormous void.

LANGFITT: What are you - a monarchist, a queenist, neither?

MCCLURE: I don't have a corgi in the fight.

VANEK SMITH: A corgi in the fight - The queen loves corgis.

LANGFITT: Her favorite animals, along with horses.

VANEK SMITH: So, Frank, this brings up the question, can the monarchy survive after the queen is gone?

LANGFITT: I think in the short run, the answer is yes, but so much hinges on Charles and how he handles the job of king. I mean, let's face it, if the firm really were a normal business, it wouldn't choose someone like Charles to save the brand.

VANEK SMITH: Stacey Vanek Smith.

LANGFITT: Frank Langfitt, NPR News, London.

(SOUNDBITE OF POPPY ACKROYD'S "TIME") Transcript provided by NPR, Copyright NPR.

Stacey Vanek Smith is the co-host of NPR's The Indicator from Planet Money. She's also a correspondent for Planet Money, where she covers business and economics. In this role, Smith has followed economic stories down the muddy back roads of Oklahoma to buy 100 barrels of oil; she's traveled to Pune, India, to track down the man who pitched the country's dramatic currency devaluation to the prime minister; and she's spoken with a North Korean woman who made a small fortune smuggling artificial sweetener in from China.
Frank Langfitt is NPR's London correspondent. He covers the UK and Ireland, as well as stories elsewhere in Europe.