Just a few years ago, the word "museum" evoked dustiness and staidness, but these cultural institutions have now turned into active, even sexy, content providers, with numbers of employees matching those of transnational companies. Take the Hermitage. A visitor needs to walk 31 kilometers to see the whole thing. When a new wing is added, the first Museum Marathon will take place. The 4,650 employees of Washington's Smithsonian have already said they will participate.
The alternative is physical expansion is to open subsidiaries evenly distributed across the territory. Thus the Louvre, worried by the low growth of its visitors (only 8.3 million last year), when a dependence of the Pompidou opened in Metz, in September 2005, aired its plans to start the Louvre Lens (a pied-à-terre of 5,000 square meters that will cost 117 million euros), and in October 2006 it launched the three-year plan for the Louvre Atlanta, according to which the High Museum will pay 10 million euros per year for exhibits, colloquia, conferences, and educational initiatives.
Small change, if compared to the agreement signed by French Minister for Culture and the Abu-Dhabi Emirate last March, which will bring to the French public coffers something like €1 billion, of which 140 million euros already paid up front. And the Louvre won't be alone there, because three other major museums will be erected in the Emirate, including the world's biggest Guggenheim, again designed by Frank Gehry, that after the titanic museum he built in Bilbao, he will be able to conceive an even bigger giant of 30,000 square meters, for a total bill of 700 milion euros. No large feat for the the undisputed world leader in museum franchising, which keeps opening new sites at a dizzying pace: after the odd combination (Las Vegas-Guggenheim and Guggenheim-Hermitage) signed by Rem Koolhaas at the Venetian Resort Casino in Nevada, now it is time for a concept store in Rio de Janeiro styled by Jean Nouvel, who was also behind the Deutsche Guggenheim in Berlino and the Hermitage Guggenheim Foundation of St. Leninsburg.
But these accelerations in strategy are imposed by the competition, which is similarly pursuing economies of scale (think about the four sites that Tate manages or to Ludwig's multiplexes). These ambitious strategies require millions of visitors (Smithsonian welcomed 24 million visitors in 2005, and the Centre Pompidou attracted 5.34 million in 2006. In the latter year, Tate attracted 6.4 million, the Metropolitan 4.6 million, the British Museum and the National Gallery of Londong more than four), they are planning sites of industrial dimensions (the Museumsinsel of Berlin cost one billion euros to make, and the Museum Quartier of Vienna two billion, while the restyling of the new Rijksmuseum will cost 272 million euros).
These expansion plans can count on budgets worthy of pharaohs: the Getty Museum spent $342 million to run its activities in 2004, less than half of the Smithsonian ($805 million in 2005), but more than the $284 million budget managed by the Met in 2006, the same year in which the MOMA spent $130 million for its day-to-day management. Going back to Europe, Tate requires €106 million for its activities, the Louvre 180, and the Poumpidou 110, while the National Gallery, the British Museum, and Victoria and Albert Museum need no less than 40 million euros each year. Much of this money goes into paying employees. They number 1026 at Pompidou, 1500 at the British, 1136 at the Louvre, 1157 at Tate, 1800 at the Met, 965 at the V&A, 834 at MOMA, 750 for all the Guggenheims. In addition, museum managers are well paid: the chief executive of the Smithsonian, Lawrence Small, gets a salary of $884,000 a year, less than the 940,000, benefits excluded, pocketed by his peer at the Getty, far from the stellar levels reached by MOMA director, who received payments from various sources for a combined total of $3.5 million from 1995 to 2003. These astronomical figures find reason to be in the huge assets that museums sit on. For instance, the Met has net assets worth $2 billion, not counting its exhibits and works of art, and its fundraising campaign manage to raise 900 million dollars in twelve months.
Why is all this money flowing to museums? According to a study made by KPMG in 1998, Guggenheim Bilbao had accounted for 0.47% in GDP growth for the surrounding region in the previous three-year period, creating 3, 816 jobs and causing a jump of 54% in tourist flows. Similarly, in 2004 the London School of Economics has evaluated in £1.83-2.07 billion the overall economic impact of the 44 English museums. For 2005, LSE calculated that Tate Modern had created at least 2,000 jobs in the previous five years, while the impact analysis survey conducted on MOMA calculated in two billion dollars the two-year impact on the economy of New York City.
by Guido Guerzoni,
Bocconi Tenured Researcher