Museums and Modes of Selling
In light of the Newark Museum of Art’s decision to sell a handful of historically significant artworks from its collection at Sotheby’s American Art sale next week, we decided to revisit the contentious conversation surrounding museum deaccessions and the cultural price that the community pays when these works enter the private sector.
The article below was written last April following the Association of Art Museum Directors (AAMD) pandemic-driven decision to reverse long standing limitations placed on museums, which held that money derived from artwork deaccessions be used for the sole purpose of financing additional acquisitions for the museum’s permanent collections. The Association has since given museums the green light to use money earned from artwork deaccessions to help non-profit institutions balance out their operating expenses. You can explore the history of this practice and the public debate behind it below.
Museums and Modes of Selling
Spun out from robber barons’ bequests and private fortunes as old as Modern Art itself, American museums have always traced a slow, elliptical orbit around the art market. At times drawing nearer, and at times fading farther from the prospect of outright sales, museums are suspended in an uneasy state of tension between the massive potential value stored in their holdings and the fear of losing it. Historically, American public art institutions have only grazed the upper atmosphere of art transactions on a select few occasions, and never without invoking consternation from critical constituents in the art world. Yet the gravitational forces of budgets and costs incessantly tug at the boundless riches locked in storage vaults, always pulling museums back towards the sphere of galleries and dealers.
Unfortunately, this momentum towards monetization tends to aggravate institutional stalwarts who would situate art’s cash value in direct conflict with its cultural and historical benefit to the public. Some museum directors and board members take a hard line on the issue, asserting that if museum art sells into private hands, it will forever be lost to future generations of viewers. Within the past several months, however, the shifting tectonics of the art world have pushed non-profit institutions and private buyers closer together than perhaps ever before. To whatever extent possible, therefore, this week’s newsletter will attempt to chronicle the fated, fatal attraction between museums and the art market, noting the possibility that recent developments related to the coronavirus pandemic may fundamentally accelerate their impending collision.
Museums and Art Sales
On April 15, 2020, the AAMD (Association of Art Museum Directors), a major organizing body responsible for museums’ “professional practice guidelines,” announced that they would “refrain from censuring or sanctioning any museum… that decides to use restricted endowment funds, trusts, or donations for general operating expenses”.1 In casual parlance, this clause refers to deaccessions, or sales of works from museum permanent collections, and seemingly extends temporary clemency to organizations that have to sell their art to keep the lights on during the economic fallout of COVID-19. But the announcement still came as a surprise to many in the art world, who viewed opposition to deaccessions as perhaps the AAMD’s only remaining practical functionality.
Sold privately in 2015 for an undisclosed price 2
In 2014, for example, when the Delaware Art Museum faced mounting debts and moved to liquidate expensive paintings from its collection, including the beloved Winslow Homer pastoral scene pictured above, the AAMD publicly announced that they were “deeply troubled and saddened” by the decision, encouraging their members to pressure museum management into a reversal, and even attempting to engage Delaware lawmakers to intervene against the possible sale of works which they claimed should rightfully belong in the public trust. The association’s policy establishes that “the interests of the public, for whose benefit collections are maintained, must always be foremost in making deaccession decisions.” 3 In a statement responding to the announced sale, AAMD representatives elaborated that “it is therefore a fundamental professional principle that works can only be deaccessioned to provide funds to acquire works of art and enhance a museum’s collection.” 4 That is to say, new art for old art. In other words, the AAMD does not necessarily denounce all sales of museum holdings, but demands that deaccessions never deplete the overall quality of museum collections in service of any other goal. As leverage and retribution against offenders of this policy, the AAMD imposes “sanctions,” strongly urging other member institutions to sever all ties, collaborations, and lending relationships with the museums in question.
The AAMD justifies a firm stance against using deaccession funds even to advance other seemingly good-faith objectives, like facilities upkeep and programming expansion, for two fundamental reasons. First, the association claims that “when museums violate the trust of their donors and the public, they diminish the opportunity and responsibility to make great works of art available to the public. This hurts the individual institution and affects the museum field as a whole.” 5 Second, the association worries that by using internal art assets to cover costs, museums will undermine efforts to source private donations. Both of these concerns were outlined in an AAMD statement from a more recent case in 2018, when the Berkshire Museum arranged for Sotheby’s to auction 22 of its artworks in a special sale as an attempt to offset debts. Despite protestations and sanctions, the Berkshire Museum went ahead with their consignment, even securing an auction-wide guarantee deal from Sotheby’s, and netting $42 million against auction hammer price totals surpassing $53 million. Standout works of American painting, like Norman Rockwell’s Blacksmith’s Boy, Heel and Toe (1940) led the sale amid roiling controversy and public outcry.
Blacksmith’s Boy-Heel and Toe (Shaftsbury Blacksmith Shop: “I’ll Never Forget That Last Hour, and Never, I Imagine, Will Any of Those Who Watched. Both Men Were Lost to Everything now but the Swing From the Forge to the Anvil. The Hells to be Turned and the Toes to be Welded.) (1940).
Sold, Sotheby’s New York 2018: $7,000,000 hammer price
Now that museums face unprecedented financial pressures from a global shutdown, however, the AAMD has retreated to a position that would have seemed anathema only months ago. Today, at least without explicit condemnation, museums may reappropriate funds from art assets to offset operating costs. In the past, when the Berkshire and Delaware museums claimed impending insolvency, critics proposed alternative means of fundraising and trimming expenses to achieve a balanced budget without deaccession. Now, those critics are quieter. The AAMD’s recent change of course seems to stem from the sudden realization that present difficulties in the museum world are deeper and more widespread than ever imagined. Even as portions of the cultural economy reopen, many organizations with thin operating margins may sustain lasting financial damage from the interruption to their fundraising and ticketing schedules. What every museum professional fears the most is the brutal ultimatum: liquidate or go bankrupt. It seems the AAMD may finally tolerate considerations for some degree of balance between these options.
And yet, to most casual observers, the fundamental issues at stake in deaccession debates are perhaps not quite as problematic as the museum world would make them out to seem, nor the funding compromises as difficult to swallow. Last month, Malcolm Galdwell’s Revisionist History podcast applied an outsider’s analytical lens to the closely related topic of unsustainably large, effectively invisible museum storage holdings.6 Rather than accept any foregone conclusions about the sanctity of the public trust, Gladwell enters the discussion armed with principles of financial accounting to illustrate the impact of fine art collections as assets on a balance sheet. In “Dragon Psychology 101,” Gladwell compares museums that hoard vast troves of artworks in their sub-basements and storage facilities, far from the public eye, to the gold-obsessed dragons of fantasy literature who would rather die than move an inch from their treasures. What’s more, museums must scrimp and save on their operating budgets every year just to sustain the cumbersome insurance, maintenance, and security costs of their stored art collections.
Indeed, unless museums ultimately decide to relax their strictures against monetizing art, some institutions will likely die out in the wake of our latest stay-at-home orders, weighed down by the useless, illiquid bulk of their underground, invisible collections. Viewed from this perspective, and acknowledging the inherent impossibility of displaying all of their art, museums come across in Gladwell’s account as miserly, selfish, and short-sighted for their reticence to sell. Gladwell, though appreciative of the eye for beauty that facilitates passionate collecting, emphasizes how ridiculous it is for museums to preach public accessibility when the majority of their works remain unseen and logistically off-limits even to scholars and staff.
What would Gladwell say to the AAMD, for whom even the threat of complete institutional dissolution might not warrant a compromise in collecting standards? Perhaps he would criticize their hypocrisy for supporting a system that fails in its mission to bring art to the public. In return, perhaps Gladwell deserves criticism of his own for underemphasizing the importance of public collections to the historical record. As it turns out, these two divergent visions of the museum world do hold an axiom in common, namely, that art held in museums is incredibly valuable. Whether or not museums should sell work, they certainly are able to turn impressive revenue figures doing so.
Consider the following figures related to auction performance. The first chart shows the relative sizes of performance brackets for auction lots consigned directly from museum deaccessions since 2007. These brackets are based on the metric of hammer price divided by low estimate, giving a fair indication of the rates at which museum-deaccessioned lots achieved various levels of performance at auction:
Now, compare these results to some equivalent analyses conducted over recent control sets assembled from all lots in the post-war, modern, and contemporary genres at Sotheby’s, Christie’s, and Phillips in 2019, 2018, and 2017:
Obviously, museum-deaccessioned lots seem to carry a strong performance advantage compared to their average, yearly counterparts.
A key question remains unanswered, however, because we are not yet able to prove definitively whether museum provenance is the direct cause of strong auction performance, or whether the justification for museum collection relies on some intrinsic measure of an artwork’s absolute quality, which is independently responsible for strong auction results.
To make one final attempt at a fair evaluation of the quantitative relationship between museum collections and auction performance, we will consider the following chart, which compares two groupings of auction lots’ performance over time. The grouping in blue gives the aggregate performance (HP/LE) of lots that, at some point in the past, were featured in a museum exhibition. The red grouping represents the aggregate performance of all other lots.
Although the comparison in performance is not as starkly divergent between these last two sets of lots, we can still easily discern a trend whereby inclusion in museum exhibitions correlates with better auction sales.
Whether or not some causal link can be found between auction performance and exhibition history, correlations in our data do affirm the unsurprising idea that museums exhibit strong ties to quality art. Both the AAMD and Malcolm Gladwell would likely be willing to admit that museums’ privileged roles as repositories of high culture entitle them to a peerless vantage point overlooking the best art in the world. Whether this vantage point entails an irreproachable mission of preservation and protection, or a compulsive, elitist exercise in greed is still very much up for debate.
But if the objective, quantitative metrics of auction performance prove, to any degree, that museums do hold the keys to discernment in art, there may be a third, more collaborative formulation for the ideal relationship between museums and collectors that obviates all debates about the ethics of selling works directly from the collection. For this utopian model, we need only look back a few decades in time to the MoMA’s ALS (Art Lending Service) organized by Blanchette Rockefeller.7 With the goal of exposing young collectors to the best-quality art in the museum’s holdings on a rental basis, the ALS sought to impart the museum’s uncompromisingly visionary curatorial and academic appreciation for art on a new generation of paying collectors without giving too much away. Yes, Blanchette intended to sell some works directly into private collections, but the spirit of her program sought to unify the best of both sides of the art world, facilitating a fair exchange between high-minded curatorial appreciation for the museum’s storied holdings and the restorative influx of new capital from passionate of young collectors. Though shuttered to the public in 1982, the ALS model perhaps deserves a contemporary revival as a broadly-appealing system to capitalize on the objective value of museum collections without forsaking either the legacy of the public trust or the practicality of the public’s accessibility.
Footnotes:
1. https://aamd.org/for-the-media/press-release/aamd-board-of-trustees-approves-resolution-to-provide-additional
2. https://news.artnet.com/market/delaware-art-museum-deaccession-313082
3.https://aamd.org/sites/default/files/document/AAMD%20Policy%20on%20Deaccessioning%20website_0.pdf
4. https://aamd.org/for-the-media/press-release/association-of-art-museum-directors-sanctions-delaware-art-museum
5. https://aamd.org/for-the-media/press-release/aamd-statement-on-sanction-of-berkshire-museum-and-la-salle-university
6. http://revisionisthistory.com/seasons
7. https://www.moma.org/research-and-learning/archives/finding-aids/ArtLendingb.html
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