On the 66th floor of the Spiral office building in Hudson Yards, Museum of Modern Art director Glenn Lowry told a crowd of art industry insiders he does in fact “sweat bullets” and lose sleep over how much money he has to raise every year.
“For sure!” Lowry said to laughs in the crowd, noting the large shifts in the museum’s endowment, building space, size of its collection and annual budget since he joined in 1995. “That $1.75 billion endowment produces $74, $75 million. We still have to find $110 million. I worry every day about that.”
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“I have not had a good night’s sleep in pretty close to 25 years,” Lowry told journalist and panel moderator Julia Halperin on April 9, to more laughs.
The reveal that MoMA’s endowment had grown $200 million since its last audited financial statements was among the many highlights during the second edition of the Talking Galleries conference in New York.
This year’s event was organized by Loring Randolph with the New York-based advisory firm Schwartzman& in collaboration with the Barcelona-based non-profit think tank. Talking Galleries New York took place at the Spiral’s ZO Clubhouse, with sponsorship from Tishman Speyer and Cadogan Tate as well as ARTnews as its media sponsor.
Lowry said what happened in Congress in the fall with the university presidents from Harvard, the University of Pennsylvania and MIT, and questions over whether those institutions deserved their tax benefits showed him how other organizations could be subject to the same scrutiny.
Concern over an over-reliance on a small number of donors, as well as declining or flatlining revenues from retail and restaurants, is why MoMA is seeking new revenue sources such as minting NFTs with Refik Amadol in 2022. Lowry said that generated “seven-figure revenue” for the museum and allowed the institution to hire someone full-time to work on NFTs.
“We have to think about how do we build. Recurring lines of revenues that can help sustain what we do and take some of the pressure off of donors having to always donate.”
Finances were also the subject of the most anticipated talk the previous day during a panel on the art market, moderated by Bloomberg News reporter James Tarmy.
Brooke Lampley, Sotheby’s Global Chairman for Global Fine Art, acknowledged that a variety of factors, including the economy, had resulted in a “significant contraction” of people willing to sell in the secondary auction market.
While Lampley believes the upcoming auctions in May will yield “very good results,” the biggest pullback has been in the lots priced at $1 million and above. “That can be cutting-edge artists who are escalating in price and who in a strong market could have a big breakout price,” she said “Or that could be for a $20 million masterpiece.”
Art advisor and event co-organizer Allan Schwartzman said the most disturbing development of the last few years was the shift from relationships with artists to a focus on buying artworks.
“Artists who had lived very healthy lives, having a show every few years, selling out always and having a devoted buyership, for so many of those artists the market has just completely stopped,” he said.
In Schwartzman’s experience, certain (unnamed) artists whose work would sell out before a show would open, who had risen in popularity the last few years, had cooled “quite a bit mostly, not fully.”
“But it doesn’t mean that shows aren’t selling out, they’re just selling slower,” he said.
Lampley noted it was only in the last few years that people have bought art and then took out loans using those works as collateral to acquire more art. “Interest rates have put a lot of pressure on that type of collecting.”
ARTnews Top 200 collector J. Thomlinson “Tom” Hill said, in addition to rising interest rates, the other reason why people wouldn’t sell in the current economic environment was learning the value of works was not going up as expected, or even going down.
The head of the Hill Art Foundation and Guggenheim Museum board chair also emphasized that the art market is subject to factors like every other market, including fundamental and technical ones, but can still “turn on a dime” through a change in sentiment.
“An artist that was doing really well at auction, all of a sudden is looking at, oh!, a bunch of buy-ins at auction and that has a really debilitating effect,” said Hill, CEO of hedge-fund Two Sigma’s real estate business and chairman of its private investment business.
After Tarmy asked if 2014 was the peak of auction sales, Lampley shot back that over the last couple of years, Sotheby’s had sold over a billion dollars privately in addition to the auction market for the last five years running.
Art advisor and collector Gardy St. Fleur said his new money clients were also actively interested in acquiring new works, but at the $50,000 to $500,000 price range. “My clients all day are like, ‘Hey, I need more work.'”
Schwartzman emphasized that the post-war and contemporary art market and the prices for artists’ work are always in fluctuation. “The Market’s always sorting through what it finds valuable and what it doesn’t in any kind of market,” he said.
“People who are dedicated to collecting, who have capital, will almost always buy when the thing comes forward that they really want,” he said. “It may hurt at a certain time but great collectors don’t pass up on great things very often.”
Compared to previous decades, Schwartzman said it was much harder to determine if something is “great” now due to multiple strains in contemporary art with dozens of artists working in each of them. “I think greatness and genius don’t multiply at the same rate as wealth and populations,” he said.
Hill also acknowledged a shift from museum directors like MoMA’s Alfred Barr being the arbiters of excellence and influence. “Everything has become much more I would say fragmented and much more decentralized,” he said, noting greater global considerations compared to the focus on Europe and US in the 1960s and 1970s. “You had great artists in other parts of the world but it wasn’t part of the vocabulary and vernacular.”
In the secondary markets, Lampley acknowledged a “total obsession” with provenance and named collections. “That’s all about taste-making and the imprimatur of an important collector now as opposed to a museum or an institution validating the quality and interest in artists work,” she said, singling out Emily Fischer Landau, whose collection sold for $406 million during the auction house’s evening sales last November. “For us it’s become like the ultimate sales tactic.”
“I think that’s all about the age of social media and the cult of personality.”
When Tarmy asked about the downsides of this focus, Lampley replied that a work owned by a collector or presented as part of a collection would have a greater price or value compared to a work of equal merit that was not. “Right now, that is a fact in the market.”
After decades of collecting, Hill said his strategy goes past bragging rights and trying to beat the market to acquiring multiple works from each artist over the span on their careers; working with advisors like Schwartzman; involvement with museums like the Guggenheim and the Hirshhorn Museum and Sculpture Garden; as well as consulting art professionals like James T. Demetrion and Lampley. “Brooke knows her art!” he said with a big smile. “And I buy a lot from Sotheby’s.”
Hill benefited from the downturn in the economy by being able to acquire Renaissance and Baroque bronzes from Claudia Quentin’s sale at Christie’s last year “at a reasonable price”. Hill had tried to acquire some of the objects before and even competed with Quentin for one, but then had a chance to get it at a lower price. “I think you just have to be really patient and you have to know what it is you want and be the opportunistic,” he said.
A shift from public auctions to private sales during a downturn in the market is more about greater price protection for sellers, said Lampley, citing the Covid-19 pandemic. “Sellers have been very reluctant to adjust their pricing expectations,” she said.
A lack of agreement around prices has resulted in a contraction in supply of works and the auction house’s use of guarantees to encourage and promote selling. “We’ve been able to keep up sales to a degree through that,” Lampley said. “There is definitely high-end transactional activity well beyond five million dollars, hundreds of millions of dollars for single works of art. But it’s happening privately where people have greater control over price.”
In terms of the future, Hill said commercial real estate would invest in more art and art spaces like museums, citing the large collection of work in the lobby of the Spiral building as well as the Charles Ray and Christopher Wool works at Manhattan West. “You have to reinvent a lot of those buildings and art is a great way to humanize, to bring people in and to make them feel that, so people want to come,” he said.
Schwartzman said more collectors are thinking about legacy, which affects what they buy. “There will be a natural reckoning of what they’re buying and why,” he said. “I think we’re going to see a lot more concern about where does this go? Not just, ‘what is the fun of today?'”
Update, May 1, 2024: The director of the Museum of Modern Art is Glenn Lowry, not Glenn Lowery. ARTnews regrets the error.