Museums and the Financial Crisis (Update # 8)

In what can be seen as an omen of what is still to come, three stories this weekend sum up how the financial crisis will affect the so-called “art world.” From the Seattle Post-Intelligencer:

When Seattle Art Museum Director Mimi Gates announced her retirement in June, she was credited with striking an agreement with Washington Mutual whereby SAM was able to afford its 2007 expansion by sharing real estate with WaMu. What a difference a year makes. If SAM and WaMu are joined at the hip, can SAM flourish as WaMu falters? Museum spokeswoman Nicole Griffin says yes. “Everything is in transition,” she said, “but we feel confident in the provisions of the lease agreement.”

We’ll see about that. In today’s NY Times, Edward Wyatt reports that the Los Angeles Museum of Art (LACMA) has received a $45 million cash gift for a Renzo Piano pavilion and $10 million worth of artworks from Lynda and Stewart Resnick. This is good news, the bad news:

Cultural institutions have been left wondering in recent weeks what will become of some of their largest financing sources as a national economic crisis unfolds. Four prominent financial institutions that were significant contributors to museums and arts programs — Bear Stearns, Merrill Lynch, Lehman Brothers and Washington Mutual — have shut down, been acquired or seized by regulators.

Maybe LACMA can deaccession some of its collection. Speaking of deaccessioning, the Washington Post reported on Friday that:

The Corcoran Gallery of Art plans to sell 10 paintings from its permanent collection at a public auction in December as a first step toward refining the museum’s focus and providing funds for purchasing future works.

More on the Corcoran deaccessioning on Clancco’s Deaccessioning Blog.

UPDATE 8: Oct. 15, 2008. Two good articles on this topic in today’s Art Newspaper. Josh Baer writes:

Speculation in young artists is over, and the smaller dealers will be hurt the most. …The theory: speculation in art (and young art) is over. When several guaranteed Rudolf Stingel works failed to sell at auction last winter, it signalled the end of a certain kind of buying of art. It wasn’t just the sub-prime crisis–it was a signal of something far more important.

One (possible) good thing coming out of this financial mess:

Perhaps a return to the importance of museums, critics and alternative spaces for validation and the introduction of new art.

Lindsay Pollack on the bright side of the financial crisis:

“The crisis is quite good for dealers as it means we are being offered high quality paintings which we can sell by private treaty,” says New York private dealer Nick Maclean. “If the market slides, people are afraid to put things out there into a free market where there’s a fear the money won’t be there to prop it up,” adds New York art advisor Todd Levin. “The last thing people want to do is to watch it flame out in a public fashion.”

On the flip side:

[O]bservers of the art market see reason for worry, suggesting the swollen pool of art buyers is bound to thin as quickly as bankers’ bonuses. “Collecting is an exciting diversion for people who are enlarging their personas,” says William Goetzmann, director of the International Center for Finance at Yale’s School of Management and former director of the Denver Museum of Western Art “But when you have a crisis that forces them to spend more attention and focus on the business problems at hand, it’s a question whether they are going to maintain that level of excitement for works of art.”

UPDATE 7: Oct. 9, 2008. From today’s NY Times, Sales Underwhelm at Art Auctions.

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