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Financial turmoil jeopardises US culture scene

19 September 2008

NEW YORK — The US arts scene is famously dependent on private philanthropy for its survival. Very little federal, state or city government money comes it way.

That’s why museum, theatre and opera directors are watching nervously as Wall Street’s financial turmoil shaved nearly 8 percent off the Dow Jones blue chip stock index this week and two big companies collapsed.

Lehman Brothers, declared a USD 600-billion (EUR 422.4-billion) bankruptcy on Monday and Merrill Lynch, was swallowed up by Bank of America the same day.

"It’s a very challenging time for not-for-profits," Jeffry Peek, a key player in the New York cultural world, told the New York Sun newspaper.

Peek is chief executive officer of CIT Inc, a global commercial and consumer finance company, and a trustee of the Metropolitan Museum of Art and New York City Ballet.

A case in point is the planned renovation of New York’s cultural temple, Lincoln Centre, for which Lehman Brothers and Merrill Lynch had each pledged USD 3 million. According to The Sun, it is not clear if either would come through on their pledges.

In addition to the disappearance of direct contributors, financial endowments for museums and theatres have seen diminished earnings from their stock portfolios. New York’s culture enthusiasts have cut back on season subscriptions and single show tickets as their salaries and wages remain stagnant.

The famous Robert Lehman collection of 3,000 works at the Metropolitan Museum of Art won’t be affected by Lehman Brothers’ bankruptcy, since it’s belonged to the museum since 1975.

However, the fate of an estimated 3,500 contemporary works of art distributed in worldwide Lehman Brothers branch offices is less clear, Bloomberg financial news agency reported.

The New York art dealer Debra Froce said she would not rule out a possible auction of the works. The bank has not commented.

Two weeks ago, the big government-chartered mortgage houses Freddie Mac and Fannie Mae had to be rescued by a bailout that could cost taxpayers USD 200-billion.

The two firms were among the country’s largest sponsors of good works for the country’s neediest and homeless, and it was not clear if that support would continue.

[dpa / Expatica]