To Sell Or Not To Sell, That Is The Question

 

Money and politics … it’s a pretty safe bet they’re intrinsically related to one another – where you find one, you’ll find the other. Who would have thought art would be wrangled into that mess, though? The extent that art, economics and politics are inter-related in most people’s minds is when there’s a call for (or more often, budget cuts to) arts programs in our education systems. That all changed in the aftermath of the City of Detroit declaring bankruptcy in excess of $18 billion in July 2013.

Not all (or even most) museums are subject to the economic rise and fall of the cities they’re located in. In the early 1900’s the building belonging to the Detroit Institute of Arts (DIA) and the collection housed within it were pieced off to the City of Detroit in consideration for guaranteed annual funding – unfortunately this guarantee didn’t contain within it a minimum grant. This arrangement greatly benefited the Institute when Detroit was at its economic height, but left the coffers wanting when funds were directed elsewhere during hard times. Regardless, the Institute sustained itself by making smart business decisions and expanding the collection where possible.

When Kevyn Orr was assigned as Emergency Manager of the city’s bankruptcy, he didn’t feel a “one time infusion of cash” would be beneficial, because it would “only delay the inevitable financial failure.” Although Orr didn’t directly make mention of the art collection, it quickly became a target to those looking for that “quick fix.” The legalities involved are complex and something I may go into further in time (once I understand it myself a little better), but for now, suffice it to say that it may come to be that the city is entitled to sell off some of the collection.

It’s rather interesting how vastly the estimates on the collection’s worth have varied over time, and from one institution’s view to the next. As of the time of writing, the most current estimate was $8.5 billion – a number supplied by Victor Wiener Associates earlier this week. It has to be noted that this estimate doesn’t account for market factors that are important in true valuations including the type of work most valuable in today’s market and the effect of a possible flooding of the art sales market.

The fact remains – the bankruptcy of Detroit may affect the art world greatly. If pieces are sold off to private collections they may never be viewed by the museum and gallery-going public again. Important works by Degas, Matisse, Van Gogh and Picasso may disappear from everywhere except the catalogues tracking them. If great numbers of works are sold off at a time the art market as a whole will suffer, based on the basic rules of supply and demand (flood the market = get cheaper prices) resulting in devaluation of art across North America, if not globally. Not only issues in the art world arise; financially, should the city sell parts of the collection, this is not an economically sustainable practice. You can only sell a near-priceless Cezanne once. The City of Detroit is in a much bigger pickle than liquidating a couple paintings can get them out of.

 

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