Sunday, February 1, 2009

The Financial Aspects of Closing the Rose Art Museum

I am a recent alumnus of Brandeis University, so I have been closely following the controversy over its decision to close the Rose Art Museum, which houses the best collection of modern art in New England.

There have been many Facebook groups created to galvanize support for the Rose, and many opinion articles written in support of the museum.

The best analysis of the situation I have read so far, however, is from the "Market Movers" blog from Portfolio, Conde Nast's business magazine.

Felix Salmon analyzes the precarious financial situation in which Brandeis finds itself, after a rapid decline in the university's endowment (which was estimated at around $700 million last year) caused by the global financial crisis (can we please have another name?). The university is also ailing because Brandeis is especially dependent upon donations to enrich its endowment, and those have frozen up for a variety of reasons (Madoff is just one).

After picking apart reasons Brandeis might want to close the Rose (artworks are easier to sell when not tied to a museum; the museum is kind of a money loser), Salmon ultimately does not really buy Reinharz/French's argument that the value of the Rose's 6,000+ artworks is frozen up because they are locked away in a lightly-trafficked museum that is (admittedly) off the beaten path.

Instead, Salmon argues that the artworks are protected under the valuable aegis of a prized cultural institution. Trying to sell the artworks after a dissolution of the Rose would be financial suicide. To raise money later on, Salmon asks, which would the Trustees like to hear: We have priceless artworks (a) that are party of a highly respected museum or (b) that have been sitting in storage ever since we closed that museum?

He concludes:
To put it another way: those artworks which Brandeis wishes to sell, it first puts in storage. It's a nasty and dishonest ploy on both an intellectual and an ethical level. And Brandeis shouldn't be allowed to get away with it.


  1. What offends people about this decision is how short sighted it seems to be. Sacrificing a long term investment in modern art for an immediate shortage of funds. That's the tragedy of this, that in 3 years the university may look foolish and not be able to get back what they've lost.
    The more practical, and relevant point is that this won't make a lot of money. Buyers can smell desperation, and nothing is more desperate than having an everything must go sale at a university art museum. Who is going to pay more than a few bucks for this art knowing that Brandeis is in such dire straits that they need cold hard cash. Brandeis is going to the pawn shop, and all they're going to get for those priceless Andy Warhols, are a few cans of soup. -Andrew

  2. Quite true, Andrew. The short-sightedness of Brandeis's decision did not escape the New York Times Editorial Board:

    I have been reluctant to agree with those who have said (over and over again) that this debacle will hurt Brandeis's reputation. However, I just might agree with them now.