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Kai Ryssdal: There's a big cultural happening here in L.A. tomorrow. The new Broad Contemporary Art Museum opens at the Los Angeles County Museum of Art.
That's Broad as in Eli Broad, the billionaire real-estate baron and philanthropist and world-recognized art collector.
With his name on the building and his signature on the $56 million check that built it, so it should follow that Broad's art would be calling the place home. But Andrea Gardner explains there's a temporary side to this new museum of contemporary art.
Andrea Gardner: This is how it usually works: wealthy art collectors amass huge collections and eventually donate them to museums.
This is how it was supposed to work with Los Angeles billionaire Eli Broad, his spectacular contemporary art collection and the Los Angeles County Museum of Art. After all, Broad has been involved with the museum for decades.
But he stunned the art world recently with the news that he wasn't going to donate his collection to the L.A. museum, after all. He was going to hold onto it and lend it out instead.
Broad says he wants to make sure his Andy Warhol paintings and Jeff Koons sculptures are seen, not sitting in museum storage. He also says that because he pays to insure and preserve the art, his way makes financial sense for museums.
Eli Broad: The price of the work has gone up dramatically, which means the costs of insurance, as a result of 9/11 and a higher value of the art, has gone up dramatically. So I think that art museums are far better off with our paradigm than doing what they have historically done.
Nicolas Forrest, an analyst and writer, says Broad has a point. Prices have skyrocketed as newly rich collectors from China, Russia and India have unleashed their fortunes on the art market. These days, many museums can't afford to compete with individual buyers:
Nicolas Forrest: Just buying within their budget is not really an option because the best artworks are going to collectors who have the money to purchase them. So the galleries and museums are needing to change the way they approach obtaining an artwork.
Museums and rich collectors have a long history of mutual self-interest. Collectors depend on museums to display their private collections and add to the collector's prestige. Museums depend on collectors for permanent donations. They often court donors for years in hopes of receiving these gifts, offering them seats on their governing boards and a voice in museum affairs.
If Broad's loaning model catches on, museums will have to woo collectors for mere loans. And some experts say that will give rich collectors even more power.
But art economist David Galenson from the University of Chicago says collectors have always had the upper hand, because they've always had the money. That's something people in the art community don't like to talk about:
David Galenson: Right, that embarrasses them. You know, "money is crass and art is about truth and beauty." Art has always been about money and that is just a fact.
But if more collectors become loaners instead of donors, Galenson believes a new power struggle will emerge as the playing field is leveled between well-to-do museums and modest ones.
Galenson: It will put more pressure on museums to be more entrepreneurial. Poor museums, those who have weak permanent collections, can get access to important art by this kind of lending library approach and as a result they can challenge richer museums.
That means more art is on display, which ultimately means more people around the world will get to see it.
In Los Angeles, I'm Andrea Gardner for Marketplace.