Trophy Museums Are Not Just for Billionaires

Harvard Museum Renovations
Harvard Museum Renovations

The New York Times ran a thin, a poorly reported piece on the trend of big new museums underwritten by billionaires like Carlos Slim, Francois Pinault, Bernard Arnault and Elie Broad.

What does it take to become a world-class art collector? These days, you need to build not only a great collection, but a great museum to house it in. Over the past few years, a rash of art-loving billionaires have dedicated themselves, or their foundations, to the construction of spectacular new venues to show off their finest acquisitions.

That’s really not a trend. Or, to be more precise, the trend is much bigger and deeper than the Times’s silly, vamping story. The newspaper’s staff knows that there’s a decade and a half trend toward private collectors building their own museums. From the clutch of competing Contemporary collectors in Miami to the heartland and DC, there is a large number of private museum projects going forward by billionaires and lesser mortals alike.

And those who don’t build their own museums are donating their works to universities—like Stanford, Harvard, Yale, University of Chicago and Princeton—that are expanding and renovating their museums in an effort to attract the best students and more alumni donations:

Elite campuses across the country have emerged from the recession riding a multibillion-dollar wave of architecturally ambitious arts facilities, even as community arts programs struggle against public indifference. The current tide of building developed over years, as universities reassert the essential value of the arts to a well-rounded education, aided by deep-pocket alumni willing to underwrite elaborate new facilities “for noble and not always so noble reasons,” Mr. Lentz said. […]

The university is building “a beautification project,” said Stanley N. Katz, the director of Princeton’s Center for Arts and Cultural Policy Studies. “So far as I can tell, the expansion contributes in only modest ways to the intellectual mission of the university.” The prominent refocusing on arts is to some extent lip service, Mr. Katz added. “Arts appeal to certain wealthy alumni who are more likely to give money to this sort of thing than something else.”

A New Status Symbol for Billionaires: Art Museum  (NYTimes.com)

On Elite Campuses, an Arts Race   (NYTimes.com)

Inside Ruprecht’s Decision to Let Go

Bill Ruprecht

The New York Times has added to their story on Bill Ruprecht’s decision to move on from his role as CEO. Although they take a poke at Dan Loeb and suggest the hedge fund manager is too thin-skinned to have worked with Ruprecht over the long term, “Of the various counterpunches that Sotheby’s threw during the boardroom battle,” the Times says, “criticisms of Mr. Loeb’s art expertise proved some of the most irksome to the financier.”

Art expertise is hardly the point at this juncture in Sotheby’s history. The firm faces tremendous pressure from its position as an independent company and one that is public. It’s chief rival is a wholly owned subsidiary of a much larger luxury goods retailer and it seems to be evolving into an online luxury retailer under the big tent of its prowess in the Contemporary art market.

That Artemis, Christie’s owner, is a luxury goods conglomerate is far more important than the fact that it is a private company. Those who imagine taking Sotheby’s private would material improve the company’s value would have to ask themselves, how? A private independent Sotheby’s would need a great deal of capital investment to pursue a broader retailing strategy.

It’s hard to remember now, but the great imbalance between Sotheby’s and Christie’s in Contemporary art is only a very recent phenomenon. One could date it to 2011 or possibly back to the Yves Saint-Laurent/Pierre Bergé sale in the depths of the financial crisis. Whatever the sign post, the firms diverged in strategy some time ago. The irony is that Sotheby’s strategy was to focus on the higher value lots but they were outflanked by Christie’s aggressive focus amping up Contemporary art.

And, the Times makes a point of telling us that the decision has been long in the works, not that it was a reaction to last week’s sales much in the way that Tobias Meyer exited the company a year ago:Continue Reading

Wealth-X Puts Global UHNW (Assets of $30m or More) Population at 211,275, Up 6% from 2013

UHNW Luxury Spending

Wealth-X has released it’s 2014 report on the Ultra High Net Worth population. These 211,275 households with $30m in liquid assests or more are huge drivers of the global luxury business and cultural markets that are bound up in their emergence. As the chart above suggests, art is a central part of their identity. Owning globally recognized art, is a badge of membership in this rapidly growing global class and one reason the auction houses are seeing a strong influx of new buyers, often at the very top of the market.

Here’s Wealth-X on the luxury market in general:Continue Reading

Ruprecht to Leave Sotheby’s

Bill Ruprecht

The New York Times’s Dealbook is reporting that Sotheby’s CEO William Ruprecht has confirmed that he will relinquish his position:

Mr. Ruprecht, 58, who has led the company for the last 14 years, had been under fire during the battle with Mr. Loeb that lasted for months. Its board, which now includes Mr. Loeb, has been considering changes to the company’s leadership since August, people briefed on the matter said.

Here’s Sotheby’s release:

Ruprecht, who has served as CEO since 2000, will continue as Chairman, President and CEO until his successor is in place to ensure a smooth transition.

The Board has formed a Search Committee to oversee the recruiting of a new CEO and has retained Spencer Stuart, a leading executive search firm, to assist in the process.  The Committee is led by Domenico De Sole, Lead Independent Director.Continue Reading

Week of Warhol = $290m

Week of Warhol Nov 2014We now have the results on the biggest Week of Warhol ever. Karolina Prawdzik put together this chart from the three auction houses showing their 64 Warhol works of art that were offered ranging from the top lot of the week, Triple Elvis [Ferus Type] to some early illustrations from the 1950s.

Altogether 64 Warhols were offered. 54 of those sold. Remarkably, all of Christie’s Warhols found buyers and only one of the three at Phillips was bought in.

$290m is the total for all of the Warhols. Chistie’s sold $215m; Sotheby’s $71m and Phillips $4m. Lest we give Christie’s too much credit, removing the two top lots from the equestion leaves Christie’s with $63.7m in Warhol sales. So one consignment had a dramatic effect on the entire week’s returns.

For some perspective, it’s worth noting that May of  2011, all three auction houses sold 54 Warhols for a total of $179m. Eighteen months later, In November of 2012, it was 65 Warhols making $200.8m. Two years on, we’re at $290m, a 45% rise.

However, sellers’s appetites were greater than buyers’s. The low estimate without fees was $231m and you can see from the chart, that only about 23 works exceeded the estimates even with the fees added.

Georgia O’Keeffe Jimson Weed = Record $44.4m

Georgia O'Keeffe, Jimson Weed 44.4m USD

The Georgia O’Keeffe museum in New Mexico sold Jimson Weed at Sotheby’s today and got a huge surprise:

Sotheby’s New York auction of American Art, Georgia O’Keeffe’s iconic flower painting Jimson Weed/White Flower No. 1 achieved a remarkable $44,405,000, more than three times the previous world auction record for any female artist*. Seven bidders immediately jumped into the fray, but it was a prolonged battle between two determined bidders that drove the price to this record height – nearly three times its high estimate of $15 million

The New York Times adds this interesting bit of price history:

Sotheby’s sold the painting twice before, first in 1987, when it was included in property from the estate of the artist’s sister and went for $990,000, and again in 1994, for $1 million.

A White Flower by O’Keeffe Blooms Green: $44.4 Million  (NYTimes.com)

Swiss Museum Debates Expensive and Unsought Responsibility of Gurlitt Hoard

Cornelius Gurlitt

The Bern Art Museum seems to have decided to accept the Gurlitt Hoard and the research responsibility that comes with it. The decision will be a relief to those who have become overwhelmingly frustrated with the German government’s inability to make progress on this festering problem, Swissinfo explains:

US litigation lawyer, Nicholas O’Donnell, who specialises in wartime restitution claims and produces Art Law Report, has been following the case closely. He believes that the Bern museum will accept the gift, but would likely request some kind of indemnification from Germany to face either the expense of receiving the collection, or restitution costs.

“Germany must be considering the possibility just to get rid of the problem,” he told swissinfo.ch.

The Wall Street Journal gets behind the doors to hear what’s at issue with the museum’s decision:

The Kunstmuseum Bern’s legal team has been researching the artworks’ provenance since the museum was informed of the bequest on May 7. Barring a last-minute legal discovery that could scuttle the deal, the museum’s board of directors will accept the gift at its meeting on Saturday, the last of half a dozen deliberations regarding Mr. Gurlitt’s bequest. […]

Much of the delay in accepting the trove has come because the tiny museum needed to secure seven-figure private funding from Swiss donors to be as free as possible of German funding that the museum thought could taint the neutrality of their provenance research, people familiar with the deliberations said. […]

“It was obvious from the start, and a huge source of angst, that accepting the works would fundamentally change the identity of our museum forever,” said one major decision maker at the meetings. […]

“Either way you’re screwed. Not taking the works still leaves you with no paintings to bargain for exhibitions with. Taking them makes you ’the museum with the Nazi-Gurlitt art,’ ” said an art historian close to the Bern situation.

But for many voting Saturday, the temptation to establish a new identity for the museum overrides any qualms.

“If you had told us before he died, ‘Would you like to deal with the collection of some recluse whose father worked for the Nazis and have that tied to you forever?’ then we would have said ‘No way,’” said a person at the board meetings. “But ultimately when something like this falls into your lap of course you’re going to vote to take it.”

The Gurlitt art collection no one – and everyone – wants  (SWI swissinfo.ch)

Swiss Museum Close to Accepting Nazi-Era Art Bequest   (WSJ)

I’ll Trade You Three Urinals for that Rubens

Robert Gober, Three Urinals (3.5-4.5m) 2.5m USD
Robert Gober, Three Urinals (3.5-4.5m) 2.5m USD

It’s a shame to see such a brilliant, thoughtful and valuable art historian like Bendor Grosvenor succumb to splenetic envy in the Financial Times. It’s worse that the editors of the Financial Times have egged him on to write this screed about Robert Gober and mock his work because it’s easy to snigger at someone paying a lot of money for three urinals. Eeeew!

Ostensibly, Grosvenor is upset at the way the market assigns value. (“[A] Gober urinal will buy you a fine Rubens.”) Gober is a fascinating and important artist. He’s hardly the market-driven fraud Grosvenor makes him out to be. And Gober’s gain need not be Rubens’s loss. This is especially poignant because Bendor Grosvenor is one of the best equipped persons to help revive interest in Old Masters and make them relevant, a project that seems worthy and needful.Continue Reading

Bonhams Sells Hepworth Sculpture for $849k

Hepworth, Cantate Domino (500-700k) 549k GBP

As sculpture sales go, Barbara Hepworth’s Cantate Domino making a sale below the low estimate of £500,000 is not big news. But Bonhams led its British and Irish sale with the work of this artist who seems ready to leave the British and Irish category and take a more prominent place in the story of Modern sculpture.