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Tuesday, 02 September 2014

Display of realism

Modern financial arts get special exhibition

Modern financial arts have been given a special exhibition. Washington’s 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 Detroit’s restructuring features the paintings and sculptures of the city’s 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 nation’s 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 raider’s playbook. A local arts patron angled for the Corcoran chairman’s seat and proposed offloading some of the museum’s 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 MOCA’s 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.

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The Corcoran Gallery of Art, Washington’s oldest private art museum, and its college of art and design said on Feb. 19 they would be taken over by the National Gallery of Art and George Washington University. The National Gallery will take primary responsibility for organizing and displaying the Corcoran’s 17,000-strong collection while GWU will absorb the small art university and assume ownership of – and renovate – the museum’s landmark building.

The city of Detroit on Feb. 20 submitted its financial restructuring plan to a federal court. Earlier, the Michigan governor pledged funds as part of a plan to sell the city-owned Detroit Institute of Arts to a new non-profit as a way to help cover the cost of pension obligations.

The board of the Museum of Contemporary Art said on Jan. 7 it had raised its endowment to a historic high of over $100 million. It launched a new fundraising campaign in spring 2013 following an unsolicited takeover approach from the Los Angeles County Museum of Art.

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