Morally Bankrukpt Business Plans: British Cultural Heritage

(Yes, this is the long-awaited art history morally bankrupt business plan.)

The UK news recently has been dominated by the news of rising energy prices. The predictions are devastating for the museum sector, as detailed here and here. Many museums are housed in listed historic buildings, which means that any renovations are significantly more complex than in private homes or businesses. It’s in this crisis that my current morally bankrupt business plan seeks to make a honest pound.

This business plan begins by setting up a medium-sized charitable foundation; my rough estimates says that it will need about £300M in distributable assets to successfully execute on this plan. The purpose of the charitable institution is to act as a back-stop against the cost-of-living expenses, and specifically against the energy price rises.

The non-profit will advertise that it is willing to back-stop the energy prices for any museum that agrees to join the “consortium” of museums. (We’ll get to exactly what is being demanded of the “joining” in a moment.) There are significant other benefits of joining the consortium. The consortium acts as a single energy buyer (negotiate by the non-profit), so there are pure economies of scale here. In addition, the non-profit may be able to help with back-office activities, like payroll, HR, and purchasing, offering even further economies.

Now, the “joining” of the consortium is an agreement to pool resources. In the agreement, there needs to be explicit language saying that the non-profit would own some percentage of the museum’s assets, and this needs to be secured by the museum’s own collection. Of course, the contract would bury this in language about endowments and similar assets, but the point would remain: the non-profit would have clear ownership of some percentage of the museum’s permanent collection.

Now, the roll-up is straight forward. At some point, the non-profit has burnt through their endowment, all to great acclaim by all. They start to close down everything, but then, at the last minute, they announce they were able to sell a few last assets to a mysterious company. It’s enough that there’s one last nice distribution of cash, say £100K per organization. Then, the corporation announces that it has come into ownership of the aforementioned percentage. It then says it will work out ways for the museums to buy back the percentage; and we’ll demand the crown jewels of their art collection.

These paintings, sculptures, and maybe even buildings will be sold to rich collectors around the world, with proceeds benefiting both the “mystery corporation” and the museums. Of course, this will wreck a lot of small museums: their major works being sold out from under them, making their collection and programming that much less interesting. But, the mystery corporation will have made a lot of money, and that is the point here.

There are opportunities for refinement here; I am not convinced that the way I conclude the scam1 is the best way. In particular, there is a lot of regulatory risk here; the government could just nationalize the Mystery Corporation. Currently, it seems the best way around this is a “shock and awe” campaign, where everything is rolled up at once, so that the government can’t easily afford to intervene. (And, of course, the global elite would be offered very attractive financing that would not be available to the government.

  1. At work these days, I am thinking a lot about the design space of the problems I am encountering. I am slowly becoming convinced that almost all of the interaction problems on Facebook are fundamentally just a scam. But this is saying “it’s all a scam” in the same way that a donut and a teacup are topologically identical.