A Murdoch comes to the rescue of Art Basel’s parent company with an $80M infusion
A media scion with a familiar last name has come to the rescue of Art Basel’s struggling parent company.
James Murdoch, who last week pointedly resigned from the media company founded by his father, Rupert Murdoch, this week became the new “anchor shareholder” of MCH Group. The Swiss company owns and operates Art Basel Miami Beach and sister fairs in Basel and Hong Kong.
The younger Murdoch’s investment firm, Lupa Systems, will inject about $80 million into MCH under a broad restructuring approved by company shareholders on Aug. 3.
The agreement is designed to stabilize the company’s wobbling finances, already stressed before COVID-19 made matters worse because of problems at its other live-events divisions. Then MCH canceled the Hong Kong and Basel, Switzerland, art fairs. The company has said it expects its overall sales to drop by half this year because of the pandemic, with annual losses mounting into the tens of millions.
The Miami Beach show remains a go for now, MCH has said, though officials acknowledge that could change amid continuing uncertainty over the pandemic’s course.
But Murdoch’s investment, which will make him MCH’s controlling shareholder, is “a very positive development” for the company and the division that runs the three art fairs, said Marc Spiegler, global director for Art Basel.
Spiegler said Murdoch supports the company’s strategy for the Art Basel division. That strategy consists of continuing to run all three fairs while building up a new, supplementary online sales and presentations component. Those online “viewing rooms” and virtual panels with prominent art world figures were in the planning stages before COVID-19 and made a successful debut in place of the live Basel and Hong Kong fairs, he said.
“There is no reason to expect things would be run differently now than they otherwise would have been, except that now this obviously puts us in a better position,” Spiegler said in a brief interview Wednesday from his home in Zurich.
Under the restructuring, MCH will receive a total capital infusion of $110 million. Lupa Systems would control at least a third of the company but could end up owning as much as 49% of total shares before the restructuring is complete, MCH said.
Rupert Murdoch, founder of News Corp and Fox News, is not involved in the deal.
Last week, James Murdoch resigned from the News Corp board, citing “disagreements over certain editorial content published by the company’s news outlets and certain other strategic decisions.” The younger Murdoch, who supports environmental causes and has criticized President Donald Trump, has also publicly rebuked News Corp publications for promoting naysayers in their coverage of climate change.
MCH said more than 70% of the company’s shareholders who voted supported the company’s restructuring plan. They also elected Murdoch to the board, along with two Lupa associates.