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Art & Auction, December 2005

Branding, notbuying, is smart buisness as corporation shift their focus from acquiring art to suporting it

In February 2005, when the Museum of Modern Art in New York inaugurated the temporary art galleries on the top floor of its new building with a selection 64 works from the UBS Art Collection, New York Times critic Roberta Smith fretted that "Contemporary Voices is an appalling paean to a corporate sponsor's blue-chip collection." ln fact, 40 of the 64 works on view from the UBS collection were donations to the museum. Such an arrangement might have been relatively uncontroversial had not the UBS logo been featured so prominently on the publicity materials.

The company was apparently unaware that there could be a downside to its generosity. At one time, corporate collecting was viewed as a public good as well as a chance for corporations to show off their cultural interests. Bur the climate has changed. Spurred by sponsored museum shows such as "Armani" and "The Art of the Motorcycle" at the Guggeheim and "Chanel" at the Metropolitan Museum of Art, UBS - whose commitment to the arts also includes its long standing sponsorship of Art Basel - was caught unaware in the current debate over whether the marriage of art and sponsorship results in a surplus of corporate influence and a shortage of museum ethics, or whether, at a time of declining government support for the arts and tigh museum budgets, it is a public good.

Added to that discussion were the investigations into the spending habits of executives at Enron, Tyco and now Refco, whose million-dollar art purchases are considered by some an arrogant disregard of clients, share  holders and pension funds.

Most of the 900 works in the ross collection - including those donated to MoMA - were originally from the PaineWebberCollection, assembled over four decades by former chairman and CEO Donald B. Marron prior to the firm's 2000 acquisition by UBS. Marron, a longtime trustee of MoMA, single-handedly instigated PaineWebber's contemporary art collecting. "Wall Street is a business where you are supposed to anticipate the future, and good contemporary art reflects the energy and ideas of the times, and in some cases, anticipates them," says Marron. "So it was logical to have your employees exposed to great examples of art being done at the time.'

Based on this belief, Marron assembled works by such artists as Lucian Freud, Andreas Gursky, Philip Guston, Jasper Johns and Brice Marden, often collecting their work in depth and well before their pictures soared. When he started collecting in the late 1960s, prices for contemporary art were very low in comparison with company earnings. Asked about his PaineWebber budget for art purchasing, Marron explains, "Anyone who collects with a passion is moved by the opportunity to find something he really likes, which is why most collections take a long time to build. So budget is not much of an issue, because the purchase, when it finally happens, is so small in relation to the corporation's size. But with prices sky-rocketing, buying has slowed, especially in the auction rooms. "For probably a decade now, American corporations have not been especially active in the market," says Marc Porter, president of Christie's Americas. "They have funneled their art money into community cultural programs rather than buying objects themselves." Porter cites Chase, which merged with J.P. Morgan in 2001, as a firm that has changed its focus from collecting. The bank, with a combined collection of over 20,000 works, from contemporary art to Amercan folk art to Asian antiquities, has shifted toward supporting museum shows and exhibitions of its own collection. At thes ame time, sales of corporate megacollections - those of Seagram, Reader's Digest, Cigna, HSBC -  have become the salesrooms' backbone, leading Porter to conclude that the grand days of U.S. corporate collections may be ending.

   
The roots of such collecting go back to the time when J.P. Morgan and Andrew Carnegie ran their

conglomerates single-handedly. An art collection was a reflection of one millionaire's tastes. As the corporate structure of the postwar era became more bureaucratic, collecting remained the domain of a chief executive officer who would turn his personal enthusiasm for art into an item on the corporate agenda.

  
However after the mergers and business restructuring of the past 10 years, corporate collections today rarely represent the choices of one individual, as demonstrated by UBS. Its chairman, Marcel Ospel, himself a collector of postwar art, was the impetus behind the company's initial purchases. Currently corporate acquisitions are chosen by an in-house curator based in Switzerland and approved by an advisory board that meets twice yearly. The hoard, which consists of Yoshiko Mori, co founder with her hushand, Minoro, of the Mori Museum in Tokyo; Patricia Phelps de Cisneros, chairman of the Fundación Cisneros; German curator Jean-Christophe Ammann; and Donald Marron, now head of Lightyear Capital, has approved a single acquisition this year - a series of 16 small portraits by Thomas Ruff - which shows its slower approach to collecting.

But branding, not buying, has become the bank's focus as its collection tours worldwide. "The Figurative Impulse: Works from the UBS Art Collection" is now at the Museo de Arte de Puerto Rico in SanJuan, and the company has recently announced an ongoing loan agreement with the Tate Modem in London.

  
Even luxury brands are testing ways to make contemporary art part of their profile without seeming overly lavish

Additionally it is sponsoring several shows in 2005 - 06, including those of Isamu Noguchi at the Seattle Art Museum, Anselm Kiefer at the Modern Art Museum of Fort Worth and Sean Scully at the Phillips Collection in Washington, D.C. UBS appointed Petra Arends, fomer deputy head of its art-banking team, as collection executive of its art holdings. "This is not just a general support of the arts, and it is not simply signing a check," he says.

Reputation rather than investment is UBS's key motivation. "We want to become the leading corporate collection in the world in terms of quality," says Arends, which is why she insists on having experts instead of executives behind the acquisitions. "It is crucial to have standing in the eyes of the art community, and to share this collection with other museums, you have to have expertise rather than the taste of CEOs." The collection is now directed toward young artists from Latin America and Asia, where the bank is expanding its operations.

Branding, however, can he achieved without assembling a full-scale collection. The Altoids Curiotisly Strong Collection, like the mint in the stylish tin, never winds up in the stodgy corporate headquarters of Wrigley, which owns the brand, but travels each year to museums throughout the U.S. before being donated to the New Musums of Contemporary Art in New York. The arrangement has been in effect since 1998 and was launched by Chris Peddy, senior category business director at Altoids, after the mint was introduced in the U.S.  

"We were looking for more unique ways to express the curiously strong flavor," says Peddy. "Our consumers, whom we describe as mediocrity resistant, are passionate about art, museums, galleries and intellectual stimuli." Although Peddy, like every other corporate spokesperson interviewed for this article, refused to talk about budget, he did describe Altoid's selection process, which involves assembling a panel of art professionals to make the choices. Artists whose work has been selected include Reed Anderson, Rob Fischer and other not-yet-blue-chip names that scream cutting-edge."It's a win-win situation," says Peddy. The collection is more valuable to the artists if it is housed in a museum, and having a museum participate speaks volumes about the quality of the art. "

Even luxury brands with ties to the design and art worlds are testing ways to make contemporary art part of their profile without seeming too lavish at their clients' expense. "We have about 8 to 10 galleries worldwide," says Francesca Leoni, head of communications for Hermès, referring to spaces in its boutiques in Berlin, Hong Kong, Los Angeles, New York, Paris, Seol and Tokyo. For example, Hiroshi Sugimoto first presented his "History of History" show-now at the Japan Society in New York - at the Tokyo Hermès, combining photographs and objects from his own collection. And Leica, a division of Hermès, holds shows in the New York store. Relying on curatorial advisers, such as Karen Marta in New York, the company is also commissioning works for its Madison Avenue windows with the assistance of art adviser Mary Dinaburg. In Brussels Hermès has a full-time curator to oversee an independent exhibition space behind its flagship store. While the company is not interested in assembling a collection, each project, Leoni emphasizes should reflect Hermès's "taste."

   
Chanel, toot, is making a greater commitment to art projects by commissioning site-specific works
for its flagship stores in Asia, which were designed by architect Peter Marino, who also chose the artists. Chanel has already installed five works in its Ginza Palace in Tokyo, and this month, its new store in the Princes Building in Hong Kong opens with Jean-Michel Othoniel's massive string of pearls made of blown Murrano glass hanging in bouticques and over the main stairwell, and Michal Rovner's walking  figures LED piece encasing the building. The Rovner piece will travel to other Chanel stores around the world.

All of that said, however, companies are still buying art - most notably Deutsche Bank, which has one of the world's largest corporate collections. Now in its 25^th year, it contains some 50,000 pieces, with an emphasis on works on paper. Its recent acquisitions include works by Francis Alÿs, Ellen Gallagher, Sharon Lockhart and Markus Schinwald.

"Certainly there are many factors influencing our acquisition decisions," explains Friedhelm Hutte, who co-curates the collection with Ariane Grigoteit from Deutsche Bank headquarters in Berlin. "We annually negotiate the budget for acquisitions,and it is absolutely necessary to be integrated, and thus affected by, the overall business." However, Grigoteit notes that the collection is not a corporate brand. "The Deutsche Bank logo was created by modernist designer Anton Stankowski, so you might argue that we have integrated art in our nameplate, yet the collection is too diverse to work as a means of branding." Hutte maintains that neither investing nor marketing motivates the bank's art purchases. He considers art "an alternative, emotional and spiritual dividend" and believes the company's support of young artists is a "social responsibility."

In the U.S., companies are increasingly providing direct community support to the arts, but in Europe, where the establishment of private museums by individual collectors is more of a tradition and corporate sopport is still a rarity, Deutsche Bank's commitment is remarkable. Hutte rejects any criticism leveled at the Deutsche Guggenheim - the company's joint venture with the museum that features three Guggenheim-generated shows a year and one from the bank's collection. "We don't intervene in terms of content," he says, "yet we believe private and corporate support of cultural activities will increase, and we should grant the museum its autonomy in order to strengthen a critical society."

By contrast, luxury goods giant LVM - whose chairman and CEO is collector Bernard Arnault - downplays collecting in favor of support for the arts, though a sampling of its collection (Richard Serra and Matthew Barney sculptures) can be seen in the courtyard of its Paris headquarters. Neverthless, LMVH's priority is helping French institutions, such as Versailles and the Grand Palais.

Despite any decline in corporate collecting, corporate support for the arts is increasing, according to a 2004 survey of the Business Committee for the Arts. The BCA found the level of support at a record $3.32 billion, with 89 percent of it coming from companies with annual revenues of $50 million or less. BCA president Judith Jedlicka attributes the decrease in acquisitions, at least in part, to mergers, which sometimes results in a surplus of art, particularly when restructuring involves closing facilities. Still, the BCA found enormous support for collecting intended to enhance the environment for employees. Businesses overwhelmingly agreed that art in the workplace reduced stress (78 percent), increased productivity (64 percent), enhanced morale (67 percent) and broadened appreciation of diversity (77 percent).

Progressive Insurance, with corporate offices throughout the U.S., has long based its collecting on these principles. Founded by the company's former CEO Peter Lewis in the early 1970s, the Progressive Art Collection was greatly expanded by Lewis's ex wife, Toby Devan Lewis, who launched one of the most creative approaches to art in a work environment. She began by inviting contemporary artists to make challenging installations in the corporate headquarters in Cleveland and established arts education programs for its employees. Today the collection contains more than 6,000 works, with acquisitions overseen by in-house curator Scott Westover, who says, "Our current CEO, Glenn Renwick, offered only one directive: Walk the line between provocation and offense." 

An example is Westover's recent acquisition of a work by Brooklyn-based artist T.R. Ericsson, who was originally from Cleveland. The piece could fit in a private collection, but its aura of violence might turn away corporate buyers. "lt's a beautiful object, an ax made from porcelain, decorated in a blue toile pattern, that bangs from a shelf," the curator says. "This ax is familiar to people out here as a tool passed through generations of families in norheastern Ohio. Even the toile pattern was available from local Sears stores."

Describing the audience for works like these as the 30,000 Progressive employees nationwide, Westover sees little need to send the collection on the road. And given that its substance - risky work by emerging artists - contrasts with the company's riskavoidance profile and product, there is no point in using the collection as part of a marketing plan or branding device.

Even Donald Marron is returning to his corporate-collector roots at Lightyear Capital. Sitting in his Park Avenue office, he is surrounded by his latest acquisitions, for which he relied on the advice of his personal curator, Matthew Armstrong: a pair of late de Koonings in the reception area; works by Tom Friedman, Sarah Morris, Sigmar Polke, Neo Rauch, Susan Rothenherg and James Siena in the halls. "I think you start with two things, your love of art and a clear reason in your own mind as to why you want to do this for your corporation," says Marron. But he adds, "If you are a good corporate citizen, and you are operating within the constraints of being responsible to your clients, then - and only then - should you branch out to support local museums and arts institutions." 

To have standing in the eyes of the art community you have to have expertise rather than the taste of a CEO.

by Barbara Pollack

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