Switzerland’s most important trade fair cannot survive on the art fair Art alone. But what strategy does financier James Murdoch have in mind? The answer is long overdue.
The Art fair will bring a touch of glamour to the city of Basel from Thursday. This year, leading representatives of contemporary art from all over the world will travel to the city on the bend of the Rhine. In addition to well-known artists, there are also almost 300 galleries whose names read like a who’s who of this industry. And above all, art collectors are flocking to Basel in large numbers. They dine in the city’s restaurants, stay in the hotels and also go shopping in Basel’s shops.
Deserted exhibition halls
All in all, art is an important economic factor for Switzerland’s third-largest city, and not only the organizer, the trade fair company MCH, benefits from it. Experience shows that one franc that MCH generates as sales in the form of stand rentals and other fees triggers eight times as much expenditure for local businesses such as hotels, transport companies and tradespeople.
But there are now far too few trade fairs with the same appeal as Art in Basel. The expensive infrastructure that MCH operates in Basel’s exhibition district is often under-utilized or almost completely empty. The loss of the Baselworld watch fair is still having a significant impact on the company, which is a good third owned by the canton of Basel-Stadt. It was last held five years ago after its biggest participant, the Swatch Group, decided to pull out.
For decades, “Baselworld” and its predecessors were the highlight of the Basel trade fair calendar. They reliably delivered high profits for the MCH company. But it is too late to mourn the end of “Baselworld”. This sophisticated event will not return. The major watch and jewelry manufacturers have long since found other formats to present themselves to their customers. What still urgently needs to be done, however, is a clear commitment from MCH to what went wrong with “Baselworld” and how the trade fair business could be run more successfully in the future.
Waiting for a mea culpa
Without such a “shame on my head” action, it will be difficult for Switzerland’s largest trade fair company to regain trust. At the moment, it is still being met with great skepticism. This is not only reflected in the severely depressed share price of MCH, but also in the incredulous amazement and head-shaking among large parts of the Basel public.
The company has accumulated losses for seven years and has had to beg for additional capital twice during this time. At the same time, there have been numerous personnel changes in management and on the board of directors – with the result that hardly anyone knows the people in charge at MCH anymore.
The biggest unknown at the Basel trade fair operator is James Murdoch. The company describes the American billionaire, whose father is the media mogul Rupert Murdoch, as an “anchor shareholder” along with the canton of Basel-Stadt. But even in New York, from where Murdoch acts as a financier and patron, people are wondering what he plans to do with his 38.5 percent stake.
Art lovers also come together elsewhere
In the four years since he joined, Murdoch has hardly spoken publicly, even though he is also a member of the board of directors of the trade fair company. In this sense, it is high time that he explained what he has in mind for MCH. A good opportunity to do so would be the presentation of the “Strategy 2030”, which the company is currently working hard on. It will be a key factor in whether MCH finally manages to return to profitability.
If the turnaround does not happen, things will look bleak for the Basel exhibition center. Basel taxpayers cannot be expected to pay for a third capital increase. And Art can also bring art lovers together elsewhere. It is already doing this – neatly spread out over the entire year – in Miami, Hong Kong and Paris.