‘New Money’ Squeezes Out Museum Buys
Not too many years ago, people in the know began to say that museum directors needed training in business as well as art history to cope with an art world that was increasingly concerned with money. But almost as soon as that notion became conventional wisdom, the price of doing art business escalated so abruptly that the wisdom seemed futile.
“An MBA won’t do it anymore. A lottery ticket is what you need,” Tom Freudenheim, assistant secretary for museums at the Smithsonian Institution, told participants at the 1989 Artnews World Art Market Conference.
Speaking Friday on a panel called “The Future of Museums,” at the Grand Hyatt Hotel in Manhattan, Freudenheim and other museum administrators warned that spiraling costs may cripple operations in the future.
Even a winning lottery ticket probably wouldn’t provide sufficient funds for museums to continue presenting international loan exhibitions of Vincent van Gogh and other artists whose work has brought record prices at auction. Insurance alone, which can account for half the cost of an exhibition, is prohibitive.
And no museum is likely to get lucky enough to buy the loaned artworks that are leaving their walls and going off to auction.
The latest is “Portrait of Duke Cosimo I de’Medici” by Jacopo da Carucci, a Florentine Mannerist known as Pontormo. After hanging for 19 years at the Frick Collection in Manhattan, the painting will go on the block May 31 at Christie’s. Valued at more than $20 million, the Renaissance portrait is “the finest Old Master painting in private hands in the country,” according to Richard L. Feigen, a leading Old Master dealer in New York.
Like Van Gogh’s “Irises” at Westbrook College in Portland, Me., and the Hal B. Wallis collection at the Los Angeles County Museum of Art, the Pontormo is an asset of a charitable organization (in this case, the Homeland Foundation) and has become too valuable to give away. A spokesman for the Frick has said that the owner of the Pontormo, the late Chauncey Devereaux Stillman, had indicated in writing that he intended to give the painting to the museum. But before his death, on Jan. 24, Stillman notified the Frick that circumstances had forced him to change his plans.
Very few museums have annual acquisitions budgets that exceed $1 million, noted moderator Myrna Smoot, director of the American Federation of Arts. Frustrated over their inability to compete in the market place, some museums are selling works from their own collections to buy others that seem more desirable. While the panelists didn’t object to judicious pruning, they lamented pressures to sell and warned against hasty decisions based on fashion.
Art museums have been “a growth industry” in the ‘80s, Smoot said. About 100 American museums have been built or significantly expanded during the past 10 years and an equal number of plans are in the works for the next decade, she said.
But Smoot listed a familiar litany of financial problems that will continue to face museums in the future: competition for grant dollars as corporations shift charitable donations from culture to social welfare, decreasing government support, income-tax laws that discourage donations, and legislation (now under consideration in Congress) that could remove the tax-free status of museum gift shops and other sources of income.
Museums have been successful as businesses, said Jim Snyder, director of planning and programs at the Museum of Modern Art. “In a sense, we are victims of that success.”
Programming pays the price of success when exhibitions reflect what can be sold to corporate supporters and ticket buyers, Freudenheim added. “It ends up being a beauty contest. The homely but intellectually exciting creature that doesn’t look good in a bathing suit” can’t compete, he said.
Most of the two-day conference dealt with art’s problematic “success” as a commodity. In a session on “Investing in Art--Strategies for the ‘90s,” panelists talked about the scope of the art boom. “There’s a worldwide surge of money coming into the marketplace,” said John L. Marion, chairman of Sotheby’s auction house. “It’s not just the Japanese,” he said, citing Switzerland, Germany, Italy and the Middle East as other pockets of free-flowing wealth.
‘We haven’t yet heard from the Koreans and the Taiwanese, but look out because here they come with wagonloads of money,” he said.
Most of the “Investing in Art” panelists--all of whom make their livings by selling art--agreed that art as investment is a loathsome notion. “Let’s remember we’re not buying pork bellies. The idea is to love what you buy,” said Harry A. Brooks, president of Wildenstein & Co. galleries.
But Feigen cut short such protests when he declared, “We are at a watershed point in the art market. There has been a sea change and we have to learn how to live with it.”
Noting that Chase Manhattan Corp. plans to launch a $300-million art-investment fund and that Citibank already makes loans based on the value of its clients’ art collections, Feigen said, “Art has been monetized.”
As long as art was regarded as a luxury, even by the rich, there were limits to how much would be spent on it, he said. But that has changed. “Art is now considered a safe place to put money.”
Whose money? Since the time of the Medicis, it has always been “new money” that fuels the art market, dealer Andre Emmerich said.
And if this new money--coupled with escalating prices and changes in tax laws--has made it extremely difficult for museums to collect art, the situation is not all bad, according to Emmerich.
“The great moral contribution we (dealers) can make is to imbue art with value. If museums have to struggle to get a work of art, they will take better care of it. Our society takes care of only the things it values,” he said. “When art has financial value, it will be preserved; when it does not, it will rot and molder.”