Inside ‘The Firm’: How the Royal Family’s $28 Billion Money Machine Really Works
After Prince Harry and Meghan Markle’s devastating interview with Oprah Winfrey on March 7, “The Firm” is on shaky ground. The senior members of the House of Windsor should have seen the tectonic consequences coming. “I don’t know how they could expect that after all of this time,” Markle told Winfrey, “we would still just be silent if there is an active role that The Firm is playing in perpetuating falsehoods about us.”
The menacing moniker dates back more than 80 years to the period following the most divisive episode in modern royal history—the 1936 abdication of Edward VIII. Alternatively attributed to Queen Elizabeth II’s father, King George VI, who succeeded his older brother, and her husband, Prince Philip, the darkly accurate nickname for the senior members of the family stuck. The Firm—also known as “Monarchy PLC”—are the public faces of a $28 billion empire that pumps hundreds of millions of pounds into the United Kingdom’s economy every year. The lavish televised weddings (the boost to the U.K. economy from Harry and Meghan’s royal wedding was an estimated $1.5 billion), buzzy tours of Commonwealth countries and public displays of pomp and circumstance generate massive interest—and profits—for a global business enterprise that spans from prime real estate in central London to remote farmlands in Scotland.
The saga of the royal family has also been a mother lode for the British media. In the Oprah interview, Markle spoke of the “invisible contract” with the tabloids, describing a relationship that is at once symbiotic, sycophantic and sinister. It’s also been great for newsstand sales and TV ratings. Three years ago, Brand Finance, a U.K.-based brand valuation firm, estimated The Firm’s contributions to the media industry at nearly $70 million. That number seems small after Harry and Meghan’s interview was broadcast in more than 60 countries. And even the prince acknowledged that they have watched the acclaimed Netflix series The Crown.
Who gets to be part of The Firm and reap the benefits has become a point of great contention over the years. Following Harry and Meghan’s departure from official duties, the number of full-time senior royals has been winnowed down to eight. Aiding Her Majesty as members of The Firm are an elite group of seven royals: Prince Charles, who is next in line for the crown, and his wife, Camilla, the Duchess of Cornwall; Prince William, second in line to the throne, and Kate, the Duchess of Cambridge; Princess Anne, the Queen’s daughter; and Prince Edward, the Queen’s youngest son, and his wife, Sophie, Countess of Wessex. According to historian and royal commentator Carolyn Harris, the move to narrow the inner circle is as much about consolidating resources as it is about maintaining reputational control.
“These efforts to streamline are clearly trying to counter public opinion concerned about the Sovereign Grant going to too many people and there being too much funding for minor royals,” Harris says.
The organizational chart of The Firm is a testament to the 1,000-year-old family business, and the public perception that sustains it is vital to its success. “It is a very formalized influencer business,” explains David Haigh, chief executive of Brand Finance. Unlike a celebrity family such as the Kardashians, however, the Windsors don’t personally profit from the business itself—although they contributed an estimated $2.7 billion annually to the U.K. economy prepandemic. The impact the royal family has on the U.K. economy is mostly through tourism, but Haigh notes there are other financial benefits, such as free media coverage of Britain (which was an estimated $400 million in 2017). There are also many valuable royal warrants granted by the monarch—essentially a stamp of approval on high-end consumer products like Barbour jackets and Johnnie Walker whisky. Haigh estimates that a royal warrant can boost the holder’s revenue by as much as 10%. The economic advantages for companies and institutions in the royal family’s orbit far exceed the $550 million cost associated with the family’s massive operating expenses, according to Haigh.
Not everybody wants to be a part of the monarchy machine, however. The enormous pressures that come with the job have driven members out of the family, including, of course, Princess Diana and now Harry and Meghan. It has not always ended well for those who leave—or are pushed out—but armed with powerful celebrity friends in America and several Hollywood deals, Harry and Meghan may find themselves far better off financially (and emotionally) than those, in the words of Prince Harry, who remain “trapped.”
Since she inherited the throne from her father in 1952, Queen Elizabeth has chaired The Firm—even if she doesn’t have the final say over how the business is managed. Prince Philip, the 99-year-old patriarch of the Windsor family, was once a powerful member of The Firm, but he has formally stepped back from his official duties. In addition to losing Prince Harry, the Firm ousted another senior member in the past year, after Prince Andrew’s close relationship to late pedophile financier Jeffrey Epstein was exposed—and he had a disastrous television interview of his own in 2019.
Beyond the extended family, the House of Windsor has thousands of employees around the world. Buckingham Palace alone employs some 1,200 people—even if they aren’t always paid a Queen’s ransom to work there. An entry-level IT specialist can make upwards of $40,000 a year, as well as benefits, at Buckingham Palace, according to a recent job listing on an official palace portal. The Crown Estate, the institution that oversees the assets of the monarchy, also employs an additional 450 people, including a board of directors that make the financial decisions for the monarchy.
Being a member of The Firm also comes with high expectations for keeping the moneymaking machine running for generations to come. The crown holds, but cannot sell, nearly $28 billion in assets through the Crown Estate ($19.5 billion), Buckingham Palace (est. $4.9 billion), the Duchy of Cornwall ($1.3 billion), the Duchy of Lancaster ($748 million), Kensington Palace (est. $630 million) and the Crown Estate Scotland ($592 million). Forbes also estimates that Queen Elizabeth has another $500 million in personal assets.
In the fiscal year ending March 31, 2020, the Crown Estate pulled in more than $700 million, with more than $475 million in profits. The royal family receives 25% of the Crown Estate income, which is also known as the Sovereign Grant, and the remaining 75% goes to the British Treasury. The latest Sovereign Grant received by the royals was roughly $120 million, which the family uses solely for official expenses, which include payroll, security, travel, housekeeping, maintenance costs and IT expenses. The private expenses of the Queen, and her extended family, are also supported by another allowance through the Duchy of Lancaster called the Privy Purse. In the latest fiscal year, the Duchy of Lancaster reported a net profit of $30 million.
As with any business, the pandemic has taken a toll on royal revenue. In September, the Keeper of the Privy Purse acknowledged that the royal balance sheet faced a potential $45 million shortfall, mostly due to a major drop in tourism and visits to royal landmarks in the U.K. because of lockdowns. He also added that the royals wouldn’t be asking for extra funding from the Treasury. Not that the Queen needs to fill her coffers. Her Majesty’s $500 million in personal assets is thanks to her investments, art, jewels and real estate, including two castles: Sandringham House and Balmoral Castle. The bulk of that will pass down to Prince Charles when he finally ascends the throne. And like his mother, he won’t directly own most of that $28 billion, which includes the Queen’s personal wealth, the assets under the Crown Estate, its holdings in Scotland, the Duchy of Lancaster, the Duchy of Cornwall and two palaces: Buckingham and Kensington.
Now 72, Prince Charles has the second-biggest operation within the royal family. As the Duke of Cornwall, Charles gets an income from the Duchy of Cornwall in addition to what he already receives from the Sovereign Grant. The Duchy was founded in the 14th century by Edward III to keep his first-born son occupied (and flush) while waiting to become king. Nowadays, the Duchy has a staff of 150 managing a portfolio of more than 130,000 acres of property across southwest England worth nearly $1.3 billion.
As with the Crown Estate, Prince Charles cannot sell the assets belonging to the Duchy, but he can earn money from them. By renting out property to retailers, farmers and residents, the Duchy brought in more than $50 million in revenue last year, $30 million of which went to the Prince of Wales and his descendants to support their respective staffs and operations. Even without the crown, the Duchy of Cornwall is far more lucrative for Charles than the Sovereign Grant, which paid him less than $2.5 million last year. Of that, $7.3 million funded the Prince’s 132 personal staffers, $6.75 million went to taxes and $4.4 million was dedicated to charitable activities, including the Prince’s Trust, Charles’ charity to help unemployed youth.
A good portion of this income has also been used to support his sons. Prince William and Prince Harry received a combined $7.8 million last year to support their own operations, but as Harry suggested in the Oprah interview, that is no longer the case for him. In the same interview, Meghan also suggested that part of what fueled the couple’s departure was the family’s intention to deny their son, Archie, from assuming the title of prince, along with the financial support from being a working royal. This, royal historian Harris says, is the manifestation of Charles’ particular focus on limiting the number of senior members—and consolidating the resources—of the family. Even if the decision to shut out Archie was strictly business, Harris notes that “the optics of that are not good, as that could be interpreted as excluding a mixed-race member of the royal family.”
“The worst possible accusation in their speech to Oprah was that the royal family is racist,” Brand Finance’s Haigh says. “That would damage the economic effect [of royals].” In her first statement after the Sunday interview, the Queen addressed the matter in an effort to mitigate the gallons of negative press ink spilled covering the scandal. “The issues raised, particularly that of race, are concerning,” Her Majesty said in her official announcement. “Whilst some recollections may vary, they are taken very seriously and will be addressed by the family privately. Harry, Meghan and Archie will always be much loved family members.”
The first son of Prince Charles and third in line to the throne, Prince William, does not have a direct source of income through his father’s Duchy—but he and his wife, Kate, certainly have the power to boost the sales of brands without the royal warrant, which, according to Brand Finance, added more than $165 million to the U.K. economy annually in 2017. Kate’s halo effect has often increased the sales of brands she is seen wearing or even those that emulated her style. In 2015, G.H. Hurt & Sons, which made Princess Charlotte’s baby shawl, recorded 100,000 visits after photos of the newborn appeared in the British press.
The Duke and Duchess of Cambridge don’t receive any money from their influence, however. Now 38, William receives an annual income from the Duchy of Cornwall to cover his family’s private expenses. In the fiscal year ending March 2020, the prince received a portion of nearly $8 million, which he had to share with Prince Harry and Meghan Markle before they announced they were stepping away from their royal duties. Yet the Duke of Cambridge is not fully dependent on the income from the Duchy—neither is Harry. Part of the estate of their late mother, Princess Diana, went to the princes on their 25th birthdays. Thanks to what he inherited from Diana—which Forbes estimated to be $10 million—Harry and his family were able to settle down in California, he told Oprah on Sunday, after his family “literally cut [him] off financially.”
Being cut off from the British royal family is hardly a financial death sentence. Now settled down in a $14.7 million Santa Barbara mansion in California, Harry and Meghan have several sweet deals to sustain them over the next few decades. The income will be necessary to fund round-the-clock security, which could cost as much as $4 million per year.
They also have multiple revenue streams. In December, the couple released their first podcast with Spotify, called Archewell Audio. That same month, the couple signed a three-year podcasting deal with the music giant that could be worth from as much as $15 million to $18 million, Forbes reported in February. This is in addition to the Apple TV+ series on mental health that Harry will executive produce with Winfrey for an undisclosed sum and a $100 million, five-year Netflix deal the royal couple signed in September. They are expected to produce documentaries, docuseries, feature films, scripted shows and children’s programming for the streaming service, and also rake in nearly four times the allowance they received from the Duchy of Cornwall.
Choosing Winfrey to conduct their first post-royal interview was as good for their future endeavors as it was for television. When Meghan opened up about her struggles with suicidal thoughts during her time at Frogmore Cottage and not having access to mental health support, Oprah mentioned her partnership with Harry. “No one should have to go through that,” she said instantly. “You know Harry and I are working on this mental health series for Apple, so we hear a lot of these stories.”
Free from the constraints of The Firm, Harry and Meghan will not likely struggle financially as his great uncle, King Edward VIII, did when he gave up the crown to marry an American divorcée, Wallis Simpson, in the 1930s. As Brand Finance’s Haigh notes, if they expand beyond their Netflix and Spotify deals and delve into jewelry and apparel, “Harry and Meghan could become a $1 billion brand.”