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News of Da Vinci’s Salvator Mundi being exhibited at the Abu Dhabi Louvre -and soon at the Paris Louvre- entirely endorses Artprice’s Museum Industry(R)

[08 Dec 2017]

Having provided an exclusive explanation of the sophisticated financial arrangements behind the recent acquisition of Leonardo Da Vinci’s Salvator Mundi –an explanation that was picked up by Agence France Presse today–, Artprice has highlighted a highly sophisticated economic model.

The arrangements for the acquisition of the Da Vinci masterpiece correspond perfectly to the Museum Industry® model that Artprice conceptualized in 2005 and has taught ever since.

According to thierry Ehrmann, All the of the world’s major museums hold accounts with Artprice, including of course the Louvre. The United Arab Emirates, with its capital Abu Dhabi, is one of the top 10 most active countries accessing Artprice’s databases…”

Here’s the deal: the Paris Louvre sells a “Louvre” franchise to Abu Dhabi until 2037. The latter pays a total of 400 million euros to the Paris Louvre for the right to use the Louvre name. The latter, accompanied by 13 French museums, convenants to lend artworks to Abu Dhabi – 10 museums have already lent more than 350 artworks.

These arrangements shows the Museum Industry® collaborating within a network, using investment vehicles and complex legal structures.

They unambiguously prove the emergence in the twenty-first century of a new economic sector – the Museum Industry® – exactly as Artprice described it back in 2005.

In short, we have a classic business model with inflows (ticketing and derivative income) and outflows – operating license costs plus acquisition costs… in this case, the price of Da Vinci’s Salvator Mundi, a price predicted by Artprice three months prior to its sale.

The 450 million dollars paid for the painting is the result of an intelligent investment decision based on the Louvre museum’s annual operating income (ebitda) and not on some wild extravagance. Those who believe it is the latter have failed to understand that the Museum Industry® is now the principal structure of the global art market.

This structure is driving art prices up by creating scarcity on the three principal segments of the Art Market: Old Masters, Modern Art and Contemporary Art, and we see that within this industry configuration, the resale of a “major tangible asset” can have an immediate impact on ticket revenue.

Artprice – which will be launching its own museum ranking index (Artmuseum100®) in early 2018 – highlights the transformation of museums, whose clientele has grown tenfold in the last 30 years.

Artprice and its econometrics department has been collaborating with Twitter for two years on a giant sample of 39 million identified followers with links to the world’s 100 principal Fine Art museums.

According to thierry Ehrmann, This massive expansion of the global Museum Industry® goes hand-in-hand with a major soft-power competition between the world’s nations, particularly its major powers (China / US) and the Gulf States. Indeed, soft-power rivalry is leading the art market inexorably towards spectacular new auction results. In our well-documented view, we are likely to see results around the billion dollar threshold by 2020.

As the world leader in Art Market information, Artprice can only benefit from this growth of the Art Market, driven essentially by the increasing power of the Museum Industry®.

For a reminder of the Museum Industry® conceptualized by Artprice, please read this press release: https://www.actusnews.com/fr/ARTPRICE/cp/artmarketinsight/artprice-the-auction-record-for-salvator-mundi-by-leonardo-da-vinci-proves-that-the-museum-industry-reg-is-completely

www.artprice.com Copyright thierry Ehrmann 1987/2017

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