Murakami Is On The Verge Of Bankruptcy, And Governments Around The World Rescue The Art Industry

The impact of the new crown pneumonia epidemic has undoubtedly penetrated into all walks of life, and the art industry is also hard to escape.

In early July, Murakami, at the top of the pyramid of the art market, unexpectedly announced through social media that its main gallery and art team, Kaikai Kiki, were on the verge of bankruptcy. Before that, countless museums and galleries had to survive in the shadow of the epidemic through unpaid leave and layoffs. Art exhibitions and auctions have also cancelled offline activities.

Fortunately, there are always opportunities in times of crisis. By moving transactions online, auction houses and galleries still have good results. Under the heavy blow, governments all over the world have begun to invest a lot of money to help the cultural industry revitalize.

The art industry is trying to get out of the shadow of the epidemic through self seeking opportunities and government assistance to ease the pressure.

Murakami, who has always been the favorite of the market, is facing bankruptcy, which shows the deep crisis of art market. Picture vision China

Danger and opportunity at the top of pyramid of art market

"I am a stupid man," Murakami began by telling his "sad story.". According to Hypebeast, the contemporary artist, known for his super flat style, posted a nearly 15 minute video on social media to announce to 2 million fans that Kaikai Kiki, the main gallery and art team, is facing bankruptcy under the influence of the new crown pneumonia epidemic. Accordingly, a number of ongoing art projects have also fallen into suspension.

In the past 20 years, Murakami has been a favorite in the market. Market analysis by art media artnet shows that from 2000 to 2014, Murakami's works attracted more than $140 million in the global auction market. His work sold for $15.16 million at my coomy in New York in 1998. In addition, since 2000, Murakami has cooperated with several big brands such as Issey Miyake, Louis Vuitton and supreme, and its co branded products are very popular in luxury and fashion markets.

However, the impact of the epidemic has been swift and violent. What saddens Murakami most is that his film project jellyfish eyes Part 2: mahashankh, which he has invested a lot of money and energy, will be suspended. Mr. Murakami said on social media that in the face of the current difficulties, his business advisers and tax lawyers have persuaded him to make film production costs tax-free, thereby significantly reducing business tax. Murakami also pointed out that this was not a legal tax evasion. Since then, Murakami will produce and release a series of videos to officially announce the suspension of film production to the public.

Murakami's predicament shows that the shadow of the epidemic has covered the top of the pyramid of art market. The global blockade and stagnation have seriously affected the art market which is more dependent on physical exhibition. In March this year, the persistently held European art and Antiques Fair (TEFAF) came to an end in a hurry after exhibitors tested positive for new coronavirus. Art Basel has cancelled the physical exhibitions that should have been held in Hong Kong and Basel in March and June respectively. The Venice Architecture Biennale, originally scheduled to open in May, was postponed to August. There are so many examples like this. Suspension and postponement have become the norm of the art industry in 2020.

In the crisis, industry participants are also actively looking for opportunities. The offline blockade makes people naturally look online. Art Basel, which gave up offline sales, opened the "cloud Exhibition". 231 galleries from 31 countries and regions presented more than 2000 works of art originally planned to be exhibited in Hong Kong in the Basel online exhibition hall, with a total value of about US $250 million. Sotheby's, Fortis and Christie's have also held online auctions in recent years. On June 30, Sotheby's held a night auction of Impressionism, modern art and contemporary art in New York, London and Hong Kong in the form of live webcast. The total transaction price was US $363.2 million. "Everyone held their breath before Sotheby's auction." Abigail Asher, co-founder of Guggenheim Asher, a New York art consultancy, told the New York Times that "there has never been such a large-scale art deal since February." Sotheby's auction results show that people "have absolute confidence in the asset value of art.". Then, on July 2, fortune earned US $41 million through online auction; on July 10, Christie's successively held "one: Modern and contemporary global joint night auction" in Hong Kong, Paris, London and New York in real-time online form, with a total transaction volume of 420 million US dollars.

Governments actively assist

In the predicament, governments of various countries have taken measures to actively support the local cultural industry.

Meanwhile, the Ministry of Finance announced the "free budget of the museum in July 2020" and gradually released the "free funding table for the museum in July 2020". According to the budget table, in 2020, the Ministry of finance will issue 3084.5 million yuan of subsidy funds to 36 regions, and the budget of 13 regions will exceed 100 million yuan. Among them, Jiangsu topped the list with 239.16 million yuan. Hunan and Sichuan ranked second and third with 198.31 million yuan and 191.06 million yuan respectively. Among the five cities listed separately, Qingdao has a budget of 9.02 million, Shenzhen 5.04 million, Ningbo 5 million, Xiamen 4.28 million and Dalian 3 million.

The circular also stressed that the financial departments (bureaus) of all provinces, autonomous regions and municipalities directly under the central government should, in accordance with the requirements of the "opinions of the State Council on the reform and improvement of the central government's transfer payment system to local governments" (GF [2014] No. 71) and the "Interim Measures for the administration of special funds for the free opening of local museums and memorial halls by the central government" (CAI [2013] No. 97), do a good job in budgeting and index arrangement The government shall not expand the scope of subsidies without authorization, and transfer funds in 2020 to financial departments at or above the county level within 30 days after receiving the notice.

The federal government of the United States has opened the paycheck protection program, which provides loans with great incentives to small and medium-sized enterprises under 500 people, with a total amount of 349 billion US dollars. On July 6, the U.S. Treasury released a list of companies that have received loans of more than $150000. The list gives the range of loans obtained, ranging from US $150000 to US $350000 and up to US $5m-10m. From the list, the art industry has received great support. According to artnet, artist Jeff Koons, who has more than 100 assistants at the studio, won a $1 million to $2 million quota. Meow wolf, an immersive art team that laid off more than half of its staff in April, received $5 million to $10 million. Artists Dan colen, Daniel arsham, sterling ruby, Tom Sachs all received at least $150000.

At the same time, gaoguxuan, which started to give its part-time employees unpaid leave in April, canceled zhuona gallery and pace Gallery, which nearly 40% of its employees, in July, and obtained loans ranging from $2 million to $5 million. For those galleries with lower credit, such as Blum & Poe, hauserworth, 303, Gladstone, Jack shainman, lison, luhring Augustine, Marlborough, Matthew marks, kasmin, etc., the loan amount is between 350000 and 1 million US dollars. It's also hard for big museums, with the Whitney Museum laying off 76 employees this spring, while the San Francisco Museum of modern art opened up hundreds of employees on unpaid leave in March and laid off another 55 in June. Both museums and the Philadelphia Museum of art have received government funding ranging from $5 million to $10 million. In addition, the two auction houses, Fuchs and Bonhams, also received loans ranging from $2 million to $5 million.

On the British side, its finance minister, Rishi sunak, announced on July 5 that the government would provide 1.57 billion pounds to bail out the cultural industry. Of this, 880 million will be used directly to fund museums, galleries, theatres, cultural heritage, music venues and independent cinemas in England. Gbp270 million will be issued in the form of loans. The government also plans to continue to inject 100 million pounds into its domestic cultural institutions and to provide 120 million pounds for the reconstruction of cultural sites. A further 188 million pounds will be provided to cultural institutions in Northern Ireland, Scotland and Wales. Nicholas Hytner, director of the UK's National Theatre, told the New York Times that the 1.57 billion pound aid package was "far better than we thought". But he also said: "it is clear that there is still a lot of work to be done and there are still many questions to be answered, such as how quickly the funding will be distributed; how the government can reach out to those artists who need help; and how long it will be before the theatre will be able to attract the desired audience."

In addition, according to the New York Times, on July 4, the German parliament agreed to provide 1 billion euro to revitalize the domestic cultural industry. At the end of June, the French Ministry of culture promised to provide 5 billion euro for the art industry. The Netherlands has also pledged 600 million euro to protect the cultural industry, including museums and independent artists.