More on the Financial Crisis and the Arts
Following up on this post from last week, details continue to unfold on the effects of the Wall Street crisis on the art world.
The Seattle Post-Intelligencer reports that the Seattle Art Museum may be affected if Washington Mutual goes under. WaMu owns the top four floors and rents a further eight floors in the SAM building. If WaMu is unable to meet its obligations as a tenant, SAM may have difficulty finding another one in the current commercial real estate market. Nonetheless, SAM denies any foreseen difficulties:
“Provisions have been made in SAM’s agreement with WaMu that would protect the museum in the event of a change at the bank,” said museum spokeswoman Nicole Griffin. “We have what’s called a change-of-control provision in the lease contract. WaMu has the capacity to sublease the space to another tenant if it needs to. We feel secure.”
Artnet carries two pieces on the collapse of Lehman Bros. Neuberger Berman, Lehman’s asset management unit, was exempted from last week’s bankruptcy filing, and Lehman has put it on the market. Five private equity firms are reported to be bidding, and “whoever wins it will walk away, along with the business, with one of the most distinguished corporate art collections.”
Even more importantly, Lehman is a giant contributor to many of the world’s top museums. A list of the museums that may be affected by the Lehman bankruptcy: MoMA, Guggenheim, Norton Museum of Art (West Palm Beach, Fla), Bruce Museum (Greenwich, Conn).
John F. Akers, a senior board member at Lehman — he chairs the firm’s “compensation and benefits committee,” which now sounds like a misnomer — has served as a trustee at the Metropolitan Museum of Art, which has received support from the investment bank. Other Big Apple institutions that have received Lehman Brothers funding are the American Folk Art Museum, the Asia Society, the Brooklyn Museum of Art, the Dahesh Museum of Art, the Frick Collection, the International Center of Photography, the Japan Society, the Jewish Museum, the Morgan Library & Museum, the Museum of Arts & Design, the New Museum of Contemporary Art and the Whitney Museum of American Art. In New York, that’s what you call a “royal flush.”
Other museums also received funding in 2007: “the Art Institute of Chicago, the Dallas Museum of Art, the Miami Art Museum, the Museum of Contemporary Art, Los Angeles, the Neuberger Museum of Art in Purchase, NY, the Philadelphia Museum of Art, and the San Francisco Museum of Modern Art.”
In Britain, the National Gallery, the Tate Modern and Tate Britain, the Royal Academy of Arts, and the Victoria & Albert Museum could all see fallout. Germany’s Städel Museum, France’s Musée du Louvre, and Japan’s Mori Art Museum also receive Lehman funding. Lehman also donated nearly $200,000 in 2007 to various grant and scholarship funds related to the arts.
It is also worth noting that the Lehman Bros. CEO, Richard Fuld, along with his wife Kathleen, make ARTNews’s Top 200 Art Collectors list on a regular basis.
The Washington Post has a piece about all this, which tries to put everything into perspective. They report an NEA figure that “that corporations accounted for only 3 percent of contributed income for nonprofit arts organizations in 2005.” But they also say that arts funding is often one of the first places companies look to cut costs. More perspective: The prolonged 2008 presidential primaries and the expensive general election campaign may be eating more into corporate funding than the current economic woes. But noone is being complacent:
Whether there’s ultimately a real funding crisis or not, theaters and museums have begun to strategize with some worst-case scenarios in mind. Pitches to potential donors are now likely to include a note of urgency that hasn’t been heard in a while — lots of talk about programming and shows that will disappear if they’re not underwritten pronto. There might be cheaper tickets, too.
The economic crisis will continue to have repercussions through the next several months. I’ll write more as it’s warranted.