Modern financial arts get special exhibition
By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Modern financial arts have been given a special exhibition. Washingtonâs estimable Corcoran Gallery, with its de Koonings and Twomblys, is being carved up like a common conglomerate. Los Angeles played host to a hostile museum takeover bid and Detroitâs restructuring features the paintings and sculptures of the cityâs art institute. A blank spreadsheet is proving just as able to inspire as a canvas.
Museums have been enduring what could be called a Red Movement. The Corcoran, for example, watched its deficit swell to $7 million on a $32 million budget as the amount of visitors and contributions waned. Its Beaux Arts building also is in need of a $130 million renovation. Meanwhile, its major competitors in the nationâs capital are federally subsidized.
Such truths have galvanized a newfound appreciation for realism. The Corcoran agreed this week to a breakup, with the National Gallery of Art taking primary responsibility for the 17,000-piece collection while George Washington University absorbs its small college and assumes ownership of the landmark edifice. The decision may have been eased by earlier bold strokes straight from a corporate raiderâs playbook. A local arts patron angled for the Corcoran chairmanâs seat and proposed offloading some of the museumâs art.
Across the country, cultural institutions put other M&A tactics on display. The Los Angeles County Museum of Art last year made an unsolicited approach for the cross-town Museum of Contemporary Art, whose modest endowment had left it vulnerable. In an act of defensive jujitsu worthy of Corporate America, the MOCA board said a few weeks ago it had in 10 months raised the fund to a record high of over $100 million.
Meanwhile, the Detroit Institute of Arts has been eyed as a possible source of cash for the bankrupt Motor City. The sale of civic art may be spared, but other inventive structures, including surrendering ownership of the museum to a nonprofit organization, might be part of any rescue plan.
The presence of some old masters probably helps. Hedge fund manager Steve Cohen, activist investor Dan Loeb and real estate mogul Eli Broad sit on MOCAâs board, venture capitalist Harry Hopper chairs the Corcoran and Deloitte managing partner Mark Davidoff is a director at DIA. What hangs on the walls may have wider appeal, but the financial creativity used to preserve them can also be a thing of beauty.