Titian deal delayed by legal and financial details
To be resolved: continuing Bridgewater loan and sale of second painting
By Martin Bailey. News, Issue 199, February 2009
Published online: 24 January 2009
Fundraising for Titian’s Diana and Actaeon has been successful, but concluding the £50m deal with the Duke of Sutherland has become bogged down over legal and financial questions. The original deadline for the National Gallery of Scotland (NGS) and the National Gallery (NG) in London to sign a firm commitment to buy was 31 December. Both the Duke and the galleries are becoming increasingly frustrated by the delay.
The Art Newspaper can reveal that there have been two difficult issues to resolve. The first concerns assurances over the continued loan of the remaining 26 Bridgewater paintings that have hung at the NGS since 1945. They were once owned by the 3rd Duke of Bridgewater and now belong to the 7th Duke of Sutherland.
The Bridgewater pictures at the NGS represent the greatest private collection of old masters on loan to a museum anywhere in the world. Valued by The Art Newspaper at over £1bn, they include masterpieces by Raphael, Poussin and Rembrandt.
Providing the NGS and NG bought the two Titians (Diana and Actaeon and Diana and Callisto), it was expected that the Duke would guarantee that the rest would continue to be displayed in Edinburgh. This was reflected in a joint statement he made on 27 August 2008 with the NGS and NG, saying that “the remainder of the Bridgewater Collection will remain on long-term loan”. The two galleries stated that the period would be 21 years.
Two months later, in a NG/NGS statement on 29 October, the wording had changed slightly: “we have been offered assurances which we hope [our emphasis] will secure the rest of the Bridgewater collection for the next 21 years.”
By this time it was clear that the Duke wanted an escape clause, to allow further sales in the event of exceptional circumstances. The galleries were concerned that this would negate the concept of a firm assurance.
It also emerged that in 2003 the 7th Duke had given what had been interpreted at the time to be verbal assurances that he would make no further sales. This was when the NGS was purchasing Titian’s Venus Anadyomene, valued at £20m. However, there were no written assurances on this occasion.
Following lengthy negotiations this winter, agreement is now close on the long-term loan of the remaining 26 pictures to the NGS. It is unlikely to be a binding guarantee, but will be a strong assurance.
The other issue under discussion is the second Titian, Diana and Callisto. Assuming Diana and Actaeon is successfully acquired, the second Titian would be offered to the NGS and NG in four years’ time, for “a similar amount” as the first one.
However, this future “option” may well have tax implications, affecting the value of the deal to the Duke. This means it has proved difficult to finalise the structuring of payment arrangements for the second Titian. Without this agreement, the NGS and NG are unable to proceed with the purchase of the first one, since a package agreement needs to be finalised and signed.
Meanwhile the NG and NGS have been fundraising for the £50m needed for Diana and Actaeon. Only two grants have been announced: £1m from the Art Fund (14 October) and £10m from the National Heritage Memorial Fund (19 November).
The American Friends of the National Gallery, which administers the Getty Endowment, is expected to make a major contribution. So too is the Scottish Government, which is awaiting the final agreement on purchase terms and loan assurances over the rest of the Bridgewater collection; its grant may well be over £10m, possibly spread over a period. The Treasury in London was also approached for a grant, through the Department for Culture, Media and Sport, but this is believed to have been refused. A number of major private donors are supporting the acquisition.
By 31 December, the NG and NGS had to be in a position to commit themselves to buying Diana and Actaeon, although payments can be spread over four years. Despite the fact that only £11m of the £50m had been announced, with private commitments they felt able to proceed. Considering the general economic recession, which intensified just after the fundraising drive was launched, this represents a major achievement.
Subsequent legal and procedural delays have been very difficult for the NGS and NG, since many of the funders are only willing to make an absolutely firm commitment once all the questions have been resolved.
Neither side would comment on the issues under discussion. The two galleries said they hoped to make an announcement shortly. The spokesperson for the Duke of Sutherland told The Art Newspaper: “The legal negotiations are very complex. Both parties are working hard towards an early conclusion.”
It now looks as if the deal could be signed in early February.
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