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How Harry and Meghan could bankroll break from ‘the firm’

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Via Financial Times

Drawing inspiration from the Obamas, the Clintons and the commercial savvy of Gwyneth Paltrow, Prince Harry and Meghan Markle this week embarked on a fraught attempt to transform their philanthropic royal brand into a lucrative private business.

Fed up with Britain’s voracious tabloids and frustrated by being reliant on others for their means, the Duke and Duchess of Sussex on Wednesday stunned Buckingham Palace by declaring their intent to find “financial independence”.

The bid for freedom by Britain’s second favourite royal and a Californian known as “America’s Princess” has thrown the family into a serious crisis, testing the foundations of an institution the Duke’s late mother referred to as “the firm”.

Their abrupt announcement — dubbed the “unilateral declaration of independence” in royal circles — prompted an extraordinary rebuke from Buckingham Palace, a hint at the tensions to come as they lay ground rules for sharing a common brand.

While the manner of the rupture came as a shock, the idea of the Sussexes breaking away has long been in gestation, with aides working on it since the couple began planning a separate foundation in the spring.

“This was long in the works. How do you do this and how do you do it tastefully? That’s the question,” said one veteran adviser to the royals. “The real risk will be that the wrong people will be throwing money at them and they will have to resist it. We saw what happened with Prince Andrew and Sarah Ferguson.”

There are few examples to emulate within the royal household. The Duke and Duchess of York’s brushes with business have been blighted by scandal. Prince Edward’s television production business also struggled. Prince Charles enjoys financial independence with the Duchy of Cornwall, but the estate is granted by charter to the heir to the throne.

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To find their way the Sussexes are instead looking further afield to the ranks of ex-presidents, prime ministers and Hollywood stars who have turned personal brands — and championing good causes — into formidable income streams.

Former US president Barack Obama and his wife Michelle wave as they exit the stage during the Obama Foundation Summit in Chicago, Illinois, October 31, 2017. / AFP PHOTO / Jim Young (Photo credit should read JIM YOUNG/AFP/Getty Images)
Barack and Michelle Obama have amassed sizeable income streams with books, films and speaking engagements © Jom Young/AFP/Getty

The post-presidency success of Barack and Michelle Obama is one obvious model. Their political afterlife has included a $65m joint book deal with Penguin Random House, and an agreement with Netflix to produce films, worth tens of millions of dollars. Like Bill Clinton and Tony Blair, Mr Obama and his wife are able to charge hundreds of thousands of dollars for speaking appearances.

While on a smaller scale, the pulling power of the Sussexes is likely to be prized by publishers, the television industry and speaking agents. The Duke’s recent deal to make a film series on mental health with Oprah Winfrey and Apple TV is a possible template for other projects.

More controversial will be any moves to extend the Sussex brand to a lifestyle portal that offers a gateway to promoted products or corporate sponsors. One former courtier likened the idea to “a posh, royal version of Goop”, the lifestyle website of the actress Gwyneth Paltrow.

The Duchess has form in this area from her early acting career, when she set up a lifestyle website called The Tig, named after her favourite wine “The Tignanello”.

On the site, the Duchess interviewed famous friends, recommended holidays and food (the final post on The Tig is devoted to a smoked fish sandwich). With her stamp of approval, it also sold Chloé perfume and Kate Spade cardholders.

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A year before the royal wedding, the Duchess closed the website. But the actor’s ambitions were always there at the bottom of the homepage: “This is the TIG, and this is just the beginning. xx MM”

The groundwork for commercial enterprise has already been laid to some extent. With the announcement of their separate foundation in June, the couple filed trademark applications on “Sussex Royal”. It covered everything from branding “pyjamas, suits, and hooded tops” to “advisory and consultancy services” and “health and wellness training”.

LOS ANGELES, CALIFORNIA - MAY 18: goop CEO Gwyneth Paltrow attends In goop Health Summit Los Angeles 2019 at Rolling Greens Nursery on May 18, 2019 in Los Angeles, California. (Photo by Phillip Faraone/Getty Images for goop)
The actor Gwyneth Paltrow has set up the Goop lifestyle brand © Philip Faraone/Getty

The couple’s online audience — with 10m Instagram followers — also has commercial potential. Mae Karwowski, chief executive of Obviously, an influencer agency, said interest is already “unprecedented” from the world’s biggest lifestyle, beauty and parenting companies to partner with the couple.

“At the very top end you have celebrities like The Kardashians and sports stars like Cristiano Ronaldo, who can get hundreds of thousands of dollars per Instagram post,” she said. “Meghan and Harry are going to be able to set their own price. It’s unprecedented. They’ll break records.”

Just a few of these options could provide the Sussexes with the additional financial freedom they crave, although its sustainability would rely on their brand remaining strong.

At present, the Duke has considerable private means, but depends on trustees or family grants to run his household. Similarly, while the Duchess still has some wealth from her previous career, her independent income as a royal has dried up.

Any attempt to profit from the Sussex Royal brand — even through associations with blue-chip companies — will pose a significant dilemma for the Queen and Prince Charles, who is taking an ever more active role in managing family affairs.

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“This is a major problem for them,” said Pauline MacLaran, a professor of marketing at Royal Holloway, University of London, who has authored a book on the royals. “The family has clearly been managing itself as a brand and its members as a brand complex . . . it relies on control.”

The need for palace approval for any commercial projects will be a sensitive point in discussions with the Queen. So too will be how the Sussexes manage the phase-out of public support, which currently includes security protection for the royals at an unspecified cost.

Advisers are likely to suggest the Sussexes handle the reputational issues raised by blending philanthropy with business but being as transparent as possible about their affairs — exactly the thing the couple are stepping back from public life to avoid.

The difficulty of this road to independence was captured by a friend and adviser late last year. “Even if they decided to withdraw from public life and never take any money and disappear, they would still be pursued because they’d be the ex-you know Duke of Rock or whatever,” said Justin Welby, archbishop of Canterbury. “It is genuinely a life sentence.”

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