Tax havens, Prince Harry and a $190bn media machine, uncovered
Behind the renewed and tiring British royal family drama, there’s some serious business going on and FN intends to follow the money, avoiding the emotional outcry surrounding Prince Harry’s forthcoming book, Spare. Let’s stick to the financial facts, as best as we can, and explore the mega media companies involved in this unfolding story and one of the biggest publishing events of 2023.
For starters, we should look no further than the Duke of Sussex himself. It has been widely reported since July 2021 that he landed a $20m advance from Penguin Random House for the book. The original journalism behind the figure came from Page Six, the gossip/celebrity section of The New York Post (a News Corp company) which has its own dedicated website.
At the time it was also revealed that ghostwriter J.R. Moehringer was reportedly receiving $1m upfront for the project. It was later claimed this year that Prince Harry had signed a multi-book deal with the publisher, totaling up to $40m.
Penguin Random House (owned by German multinational conglomerate Bertelsmann) gave more details about the memoir in October last year, announcing a launch date of 10 January 2023, unveiling Spare’s cover and revealing that it will be published in no less than 16 languages (it has leaked in Spain). We also know now that Spare isn’t simply a traditional hardback book, but a collection of media products, including:
An audio book
An audio CD
An e-book
It is not clear what other potential revenue, including further licensing deals or royalties, Prince Harry will receive from the deal with Penguin Random House and what tax he might have incurred from the alleged $20m advance or future sales.
The money
As a resident of Santa Barbara, California, he could face an upper personal income tax rate of 13.3% (this kicks in around $1m). The federal income tax rate, meanwhile, goes up to 37% for top earners (the starting rate depends on your marital status). Equally, we don’t know if these payments are received through his and Meghan Markel’s non-profit, Archewell Inc, or a limited liability company (LLC).
The couple are reportedly linked (though the latter’s business manager and lawyer) to 11 such companies registered in Delaware, a state the FT and other outlets have branded as “America’s tax haven”.
Speculation has surrounded one of the companies, Orinoco Publishing (which shares the same address as Archwell), and whether this entity holds the rights to Spare or not. Another known unknown surrounding the book.
We do know, however, that Prince Harry has promised to support charities with proceeds from Spare. So far public pledges have amounted to nearly $2m:
$1.5m to Sentebale
$360,000 to WellChild
The popularity game
It should be stressed that the $20m advance is a considerable sum in the publishing world and follows the reported $30m Spotify gave the couple and the $100m from Netflix for as part of a multi-year deal, including the recently aired six-part ‘documentary’. Harry & Meghan.
The investment from Penguin Random House came as interest in the couple continued to wane over the past five years, peaking in both the US and the UK around their May 2018 wedding and then later around the broadcast of Oprah Winfrey’s interview with the Duke and Duchess of Sussex in March 2021, attracting an impressive 17m viewers. There is a noticeable downward trend.
As an interesting historical aside, Massachusetts, the state which is synonymous with the American revolution (the Boston Tea Party, Bunker Hill and Liberty Tree) and Irish-Americans, has shown most interest in Prince Harry over the last 12 months and ranked in the top five states between 2018 and the present day looking him up.
But before he can relax with a pint of Guinness, Prince Harry and Penguin Random House will have to hit some heady numbers. Andy Lewis, the former books editor of The Hollywood Reporter, has crunched the figures in his The Optionist newsletter, estimating that a total of 1.7m units must be sold for Spare to wash its face. Lewis believes it can be achieved this way:
“Spare becomes just a modest hit in the U.S., say the 14th or 15th bestselling book of the year, with about 650k print sales (and another 200k ebooks).
Add in an equal amount of foreign sales.
Harry will appear far short of earning out his $20 million advance, BUT, the house always wins: that would make the next three books, if they happen, gravy for PRH.”
To put those figures into perspective, the bestselling title in the UK last year, Colleen Hoover's It Ends with Us, sold 693,850 copies. Richard Osman’s The Bullet That Missed came in second with 586,466. Jamie Oliver’s latest cookbook, ONE, led the non-fiction charts in 2022 with 354,000 copies sold.
In the US, it’s a similar story, with Hoover’s follow-up It Starts with Us surpassing 1.8m copies sold in 2022, and Michelle Obama’s The Light We Carry selling more than 733,000 since its publication in November.
No live interviews
To help increase awareness and sales of Spare, Prince Harry has subsequently embarked on a very public but seemingly careful media round. In the US, he has returned to CBS (owned by Paramount) with a pre-recorded interview on flagship current affairs show 60 Minutes with Anderson Cooper, going live on Sunday 8 January.
A day later another pre-record with ABC’s Good Morning America co-host Michael Strahan will be broadcast, followed on Tuesday with CBS’ The Late Show with Stephen Colbert.
Colbert’s questioning of Prince Harry will be the closest thing the royal potentially comes to a live interview since the show is ‘live-to-tape’, meaning it is typically recorded with little editing the same evening that it is aired.
In the UK, another pre-recorded interview with ITV’s Tom Bradby will be broadcast on Sunday at 9pm local time. Bradby is a 20-year-long friend of the prince and documented Harry and Meghan's royal visit to South Africa in 2019, when the couple publicly raised concerns about the media’s scrutiny.
“ITV will show an exclusive interview with Prince Harry, The Duke of Sussex, next Sunday in which he will talk in-depth to Tom Bradby, journalist and ITV News at Ten presenter, covering a range of subjects including his personal relationships, never-before-heard details surrounding the death of his mother, Diana, and a look ahead at his future.
The 90-minute programme, produced by ITN Productions for ITV, will be broadcast two days before Prince Harry’s autobiography ‘Spare’ is published on 10 January, by Transworld.”
Each network will no doubt hope to see a bump in ratings thanks to Prince Harry’s revelations as part of a wider $190.6bn media machine.
Those market caps in full:
Disney (ABC parent) $171bn
Paramount (CBC parent) $12.4bn
ITV Plc $3.8bn
Penguin Random House $3.6bn (Dec 2019 valuation)
📺 Media and tech questions to think about
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Amid cuts, what will BBC News output look like in a couple of years time?
How long will the chip shortage last for and what are its second order impacts?
📖 Essays
📧 Contact
For high-praise, tips or gripes, please contact the editor at iansilvera@gmail.com or via @ianjsilvera. Follow on LinkedIn here.
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