Can the British royal family business survive without its CEO? : Planet Money : The Indicator from Planet Money The last couple of years have been rough for most of us, the British royal family included. Due to a pair of scandals and Queen Elizabeth's recent poor health, the future of the royal family feels less certain than it has in years. Today on the show, the finance that drives "The Firm" and can it survive without its CEO?

The U.K.'s most famous family firm in crisis

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SYLVIE DOUGLIS, BYLINE: NPR.

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STACEY VANEK SMITH, HOST:

This is THE INDICATOR FROM PLANET MONEY. I'm Stacey Vanek Smith. And today - I'm so excited - I am joined by the great Frank Langfitt in London, NPR correspondent extraordinaire. Hi, Frank.

FRANK LANGFITT, BYLINE: Hey, Stacey. Great to be here.

VANEK SMITH: And I know you cover all kinds of issues from London, but somehow in my head I always think of you as the royal family correspondent (laughter).

LANGFITT: It's been fun. But I got to say, Stacey, things are pretty shaky these days for the royal family, which of course is Britain's most famous brand. The queen - she's 95. She is very healthy normally. She's very active. But in the past couple of months, she's missed some big public events.

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UNIDENTIFIED REPORTER: Breaking news from here in the U.K. - it's been announced that Queen Elizabeth will not now be attending this morning's remembrance service at the Cenotaph in London.

VANEK SMITH: And, Frank, there are also some other issues brewing.

LANGFITT: Yeah. I mean, there are a lot of problems. The queen's grandson, Prince Harry, and his wife Meghan, the Duchess of Sussex - they quit the royal family last year. And people in the states would have watched this drama play out in that interview with Oprah where the couple accused royal family members of racism, which Buckingham Palace denies.

VANEK SMITH: And I think Prince Harry's now writing a memoir, which is a huge no-no in the royal family, I think.

LANGFITT: And that's not all. You know, there's been this very disturbing sex scandal involving the Queen's second son, Prince Andrew. It's received not that much attention in the U.S., but some of the details now are actually playing out in a New York courtroom this week. And the Queen's eldest son, Prince Charles - of course, he's next in line to the throne - his image has never really recovered from his messy divorce with Princess Diana, which the Netflix series "The Crown" is going to depict in its fifth season, which is out next year.

VANEK SMITH: Oh, "The Crown." I think, you know, a lot of what I know about the royal family - or think I know from watching "The Crown" (laughter). I'm a huge fan.

LANGFITT: And not all of it, of course, is accurate. But in the U.K., the other thing, Stacey, is polls show that really only about a third of people think Charles would make a good king.

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VANEK SMITH: So today on the show, Frank, you and I look at a brand in flux. And we look at some questions. How is the monarchy funded?

LANGFITT: And what exactly is it selling? And the big one, I think, is can England's most famous family business survive without its CEO, Queen Elizabeth?

VANEK SMITH: 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, of course, the senior royals - including the queen and her son, Prince Charles - all pitch in.

LANGFITT: And they do. They do a lot of ribbon cuttings, a lot of charitable events. Occasionally, they throw amazing weddings, like Meghan's and Harry's in 2018. And they also try to serve - and this has been really, really tricky - as the first family of the U.K.

VANEK SMITH: 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. Security alone is estimated to cost well over $130 million a year, and a lot of that money comes from taxpayers. And some of it, though, comes from these huge property portfolios called the duchies.

LANGFITT: 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 about 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. And David McClure - he says the money they receive that's tied to the Sovereign Grant should be based on need, not a percentage.

MCCLURE: In theory, it could always go up and up.

LANGFITT: Which means they could just spend more and more.

MCCLURE: There's no real incentive.

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: Originally, it was going to be a safety net in case the monarch got deposed. 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. It's a wonderful 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. And in this quirk of history, of which there are many when we look at the Royal finances, both duchies receive more than $2 million annually from estates of people in the area who died without a will. And that money then goes to charity.

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.

MCCLURE: Heads of government come and go, but the monarchy has been surviving for a thousand years. So it gives an important sense of continuity and stability and the sense of duty, working hard, diligence of decorum and acting correctly.

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, Stacey - they're another story. The divorce from 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.

MCCLURE: But it's celebrity with great history and great glamour and great palaces. So you can understand how, just in terms of celebrity, it might win over the Kardashians. But that's not the whole story. I think it's also got something to do with the mystique - that everyone projects onto the Queen what they want to see onto her.

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.

MCCLURE: People have often speculated whether he should step down and just miss a generation.

LANGFITT: What do you think?

MCCLURE: No, I think he's waited so long. I think he has a right to be king.

LANGFITT: What would be best for the monarchy, though - skip a generation?

MCCLURE: Probably. But it's not going to happen. He's waited 50 years for this top job. He's not going to suddenly say, I don't want it anymore.

LANGFITT: And, Stacey, there's one more worrisome indicator - the Queen polls 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 has all the corgis, right? 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.

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VANEK SMITH: This episode of THE INDICATOR was produced by Julia Ritchey and Jessica Beck, with help from Kevin Beesley and Isaac Rodrigues. It was fact-checked by Taylor Washington. Our senior producer is Viet Le. Our editor is Kate Concannon, and THE INDICATOR is a production of NPR.

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