Bloomberg News

Artists Flee Los Angeles Museum Board, Deitch Draws Fire

July 18, 2012

Eli Broad

Eli Broad, billionaire co-founder of homebuilder KB Home. Broad founded KB Home, which operates in nine U.S. states, in 1957 with Donald Kaufman. Photographer: Jin Lee/Bloomberg

The departure in the past week of four prominent artists from the board of the Museum of Contemporary Art in Los Angeles has fueled speculation that billionaire Eli Broad will step in and take over the 33-year-old institution.

Four years ago, when MOCA was in financial distress, Broad agreed to give it $30 million. A turnaround that began that year, however, appears to have stalled under Jeffrey Deitch, the former New York gallery owner who was named chief executive of MOCA in January 2010.

The museum’s operating profits have declined, matching funds have gone unmatched and board members have quit. Critics have questioned whether Deitch’s knack for shows that attract large visitor numbers can offset what they see as his shortcomings in drawing donations.

“To be a director of a private museum today, one really has to be good at fundraising,” said Los Angeles philanthropist Jane Nathanson, who left MOCA’s board in March due to disagreement with the direction the museum was taking under Deitch’s leadership. “This is a wake-up call that MOCA will not survive the way it’s been run.”

Broad, co-founder of Los Angeles-based KB Home (KBH:US), expressed his support for Deitch in a July 8 editorial in the Los Angeles Times. “MOCA will thrive and will avoid the problems that are plaguing other institutions,” he said.

Yet Broad, 79, also has been mentioned as a likely savior for MOCA. He has a personal interest in maintaining the health of a museum he co-founded and for which he will soon be an institutional neighbor. He is building a contemporary-art museum featuring his personal collection just two blocks from MOCA’s flagship downtown location. Known as The Broad, it is due to open in 2014.

Norton Simon

“The phrase I’m hearing from everybody is, ‘Did you read the Norton Simon book?’” said Hugh Davies, director of the Museum of Contemporary Art, San Diego, referring to a 1998 biography of the founder of Hunt Foods.

Simon took over the struggling Pasadena Museum of Modern Art, turning it into a California institution that now bears his name. “This is a reprise of that,” Davies said.

Karen Denne, a spokeswoman for Broad, said the philanthropist has “categorically said he has no interest” in taking over MOCA. “The only relationship The Broad will have with MOCA is to allow free admission for all MOCA members,” she said in an e-mail.

Ono, Haring

Deitch, 59, ran Deitch Projects, a gallery with three New York locations that produced more than 250 exhibitions, including ones featuring the works of Yoko Ono and Keith Haring. His first show for MOCA highlighted the artistic career of actor Dennis Hopper, while one this year was curated by Mike Diamond, a member of the rap group the Beastie Boys.

An exhibition last year of graffiti artists produced the highest attendance in MOCA’s history, with 201,352 visitors, while total guests doubled to more than 400,000 for the year, MOCA said. Deitch has brought in other board members including Steven Cohen, chairman of Stamford, Connecticut-based SAC Capital Advisors LP and an art collector. Cohen declined to comment through his spokesman.

Tensions at the museum escalated after MOCA announced the resignation of 22-year-veteran curator Paul Schimmel June 29. Artist board members John Baldessari, Barbara Kruger, Catherine Opie and Ed Ruscha announced they were quitting, citing disappointment with the museum’s direction.

“Can important and serious exhibitions receive funding without a donor having a horse in the race?” Kruger and Opie wrote in their resignation letter. “Is attendance a sustaining revenue stream for museums?”

Operating Profits

Lyn Winter, director of communications for the museum, said Deitch wouldn’t be available to comment. She forwarded a statement from MOCA board co-chairmen Maria Arena Bell and David G. Johnson, who said they “deeply regret the resignations” of the artists and hoped “they will continue in important roles and provide valuable counsel for MOCA.”

MOCA reported that its revenues exceeded expenses by $316,000 for the fiscal year that ended June 30, 2011, the most recent year for which a financial statement was available. That compares with operating profits of $5.4 million and $6.2 million in the previous two years.

Endowment Fund

The museum’s investment portfolio, at $20 million, is unchanged from 2007. In addition to supplying exhibition funds, Broad made a $15 million grant in 2008 contingent on MOCA attracting matching contributions. The grant doesn’t expire, and $6.25 million in matching donations have been made, according to Denne. MOCA has $7.5 million in a reserve fund that could be used to replenish the endowment, she said.

“The museum made a conservative, near-term decision in the last fiscal year to maintain maximum flexibility in its operations by keeping cash in reserve rather than increasing the endowment,” Winter said in an e-mail. “MOCA has a healthy cash balance and no debt.”

Museum employment, at 45 full-time workers, is one-third what it was in 2008, reflecting cuts, consolidation and attrition from curatorial, fundraising and education staffs, according to Winter.

The cuts are too aggressive and put too much reliance on guest curators, said Charles Young, a former University of California chancellor who served as chief executive of the museum for 19 months through June 2010.

“A museum has to be an educational, conservatory institution,” Young said. “You can’t abandon that for the populist approach. You can’t run a museum on what people pay to attend.”

To contact the reporters on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net; Katya Kazakina in New York at kkazakina@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net


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