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How much is the Mona Lisa worth?
It's priceless. But my ridiculous hypothetical says $5B to $10B.
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Today’s email tries to answer a question that is actually un-answerable: “What is the Mona Lisa worth?”
Also this week:
WeWork founder Adam Neumann is back
Early images of Zuck’s VR world…aren’t great
Some really smart links and really dumb memes
Ridiculous hypotheticals are always fun.
Here’s one: how much would the Mona Lisa sell for on the open market?
The real answer is “priceless” because the Louvre Museum will never sell Leonardo Da Vinci’s masterpiece. Per France 24, there is literally a French law protecting the Mona Lisa and other key artworks:
Article 451-5 of the French “Heritage Code” law governing national treasures stipulates: “Collections held in museums that belong to public bodies are considered public property and cannot be otherwise.”
The law could change but I’m gonna say “nah, no chance” (as a point of comparison, Portugal tried to sell 85 famous impressionist paintings to fund government coffers but the legal pushback was so big that they nixed the plan…and the Mona Lisa is infinite times more valuable than those impressionist art works).
People def enjoy talking about the hypothetical, though: At the start of the pandemic, a French tech CEO did the most tech CEO thing and wrote an op-ed arguing that the French government should sell the Mona Lisa to pay down the country’s debt and fund COVID relief.
His estimated sale price: €50 billion (~$55 billion at time of the op-ed).
Here is a Google Translate of the key excerpt:
The "Salvator Mundi" of the same Leonardo da Vinci…was bought for $450 million to end up on the yacht of a Saudi prince. We can expect more than a 100x more for the most famous painting in the world, with the significant premium of the first. From the same artist, Italy lent "The Vitruvian Man", a simple drawing, against a deposit of $1 billion.
Another way to determine its value: how much does it bring in? In direct and indirect income (by-products, plane tickets, hotel nights, catering, etc.), the sum is colossal since it is estimated up to 30,000 is the number of daily visitors to Mona Lisa in 2019 (i.e. 7 million per year for a total of 10 million for the museum).
They would be a minimum of 2 million tourists [that] come to the Louvre "only" for the Mona Lisa. At €1,500 of expenditure on average per tourist, it is therefore at least €3 billion per year.
Anyways, the French CEO is basically making three valuation arguments for the Mona Lisa: 1) comps with da Vinci’s works; 2) what an uber-rich person is willing to pay; and 3) some type of cash flow model.
Let’s walk through the options (with full knowledge that the entire exercise is comically hypothetical but potentially very amusing).
Comps with da Vinci’s works
As I covered in my previous article “Why is the Mona Lisa so famous?”, there are less than 25 paintings attributed to Leonardo da Vinci. Some say it’s less than 15.
Either way, da Vinci was notorious for not completing his art works. Mostly because he’s the greatest polymath in human history and had his fingers in so many Renaissance pies that there was no time to finish everything he started (“Renaissance pies” is a weird visual).
Since the 1960s, there have been 3 notables instances of someone trying to value a da Vinci work:
Mona Lisa in 1963: John and Jackie Kennedy convinced the French government to loan the Mona Lisa to the US for a 7-week tour in DC (National Gallery) and NY (The Met). According to Guinness World Records, the portrait received the highest insurance for a painting ever: $100m (which is $968m in today’s super-inflated money).
Salvator Mundi in 2017: da Vinci’s painting of Jesus Christ is the most expensive art work ever sold. Saudi Crown Prince MBS bought the “Male Mona Lisa” for $450m in 2017. The painting’s price rise has been ridiculous. It was sold for less than $200 in 1958 because people had no idea it was a da Vinci. And it stayed that way basically until the early 2000s. A few art dealers suspected it had value and scooped it for $10k. After verifying the da Vinci connection with auction houses and experts from 2008-2011, the Male Mona Lisa (what an incredible nickname) flipped for $80m then $127m then $450m ($554m in 2022 dollars). The record price tag came even as The Louvre itself disputes the painting’s authenticity. A “maybe da Vinci” is the most valuable painting in the world, which probably bodes well for Mona Lisa.
The Vitruvian Man in 2019: This one is da Vinci’s famous notebook drawing that shows the proportions of a male body. The Italian government lent it to The Louvre in 2019 for an exhibit celebrating the 500th anniversary of da Vinci’s death. A lot of Italians were not happy about the loan. Why? Because they were worried that travel would damage the notebook (there’s also a patriotic angle since The Louvre already has five of the Italian master’s paintings). Ultimately, it was insured for more than €1B (~$1.4B in 2022 dollars). Of note, MBS wouldn’t lend Salvator Mundi to The Louvre for the 500th year extravaganza because the museum questioned the Male Mona Lisa’s authenticity.
Valuation range: $554m to $1.4B.
PS. Here’s an absolutely wild tweet I found while researching The Vitruvian Man:
What is an uber-rich person willing to pay?
As the pithy saying goes, “something is worth what people are willing to pay for it.”
When it comes to uber-billionaires trying to flex on each other, it’s pre-ordained that bidding wars can get out of control.
In recent decades, the most popular trophy assets are sports franchises (and probably superyachts). If you take the world’s biggest sports leagues — NFL (32 team), NBA (30), MLB (30) and EPL Premier League (20) — there are only 112 of these “assets”.
The Denver Broncos just sold to an ownership group led by members of the Walton Family for a record $4.6B. The deal is a 2.02x increase over the previous record acquisition (Carolina Panthers for $2.3B in 2018).
If you look at the other major sports leagues, there’s a pretty tight range of how much more the “record price” is compared to the previous record price: 1.50x to 2.07x.
The purchase price for Salvator Mundi was 1.50x the previous record (Interchange by Willem de Kooning).
I know the analysis is a small sample size but it seems that the uber-billionaire flex market has settled on a benchmark: someone will pay up to 2x the previous record.
At a 2x multiple from the Male Mona Lisa, the Female Mona Lisa would be worth over $1B. And if the Denver Broncos — which isn’t even a 1 of 1 — can go for $4.6B, the Mona Lisa as a trophy asset should certainly be in that ballpark.
Also, if a bunch of uber-billies are playing “let’s trump the previous record price for a trophy asset”, then 2x the Denver Broncos price is $9.2B (honestly, that’s probably what it would cost to buy the New York Knicks, New York Yankees, LA Lakers or Dallas Cowboys on the open market right now).
Valuation range: $1B to $9.2B.
Some type of cash flow model
Please please please don’t @ me for this analysis.
I understand how distasteful it is to put a cold cash flow analysis on a work of art like the Mona Lisa. But we have to do it.
SatPost reader Timothy Conder sent a good response for a Mona Lisa price estimate and laid out these assumptions:
Currently 10m visitors to Louvre a year, 8m of which come just for the Mona Lisa. So, 8m annual visits attributable to [the painting].
Current pricing seems to be €15 in person, €17 pre-booked. For simple calculations I’ll assume a €16 average ticket price
Theres a smorgasbord of reasons to get free entry (being very young, being kind of young but from the right countries, being unemployed, a journalist (I hope you utilised this?), a teacher of art, etc., etc.). I still think the vast majority of entrants will still pay, so I’ll assume 75% of the entrants (6m) are paying visitors
This gives us €96m / year
The €96m / year is only for ticket sales. Further, it seems reasonable to assume each visitor will spend the equivalent of the average ticket (€16) on merch and food. So now we’re looking at ~€200m / year.
Then you have to factor the broader economy spillover, particularly tourists. The French CEO that kicked off the hypothetical wrote:
There would be a minimum of 2 million tourists…at €1,500 of expenditure on average per tourist, it is therefore at least €3 billion per year.
The €1,500 per tourist figure feels a bit high. Why? Because a lot of these visitors probably did what I did when I visited Paris as a broke 20-year old: 1) sleep on random couches; 2) subsist off of baguettes and bananas; and 3) drink $1 wine.
I’m going to go conservative and say €500 per tourist (or €1B per year).
Add it all up and you have ~€1.2B annual sales attributed to the Mona Lisa. Now we need to apply a sales multiple and it’s probably best to find brands that understand luxury and scarcity the best: LVMH (5x sales) and Hermes (14x sales).
Based on the extremely hypothetical cash flow model, the Mona Lisa is worth €6B to €17B (and basically the equivalent in US dollar terms because of how hard the Euro is getting clapped).
Valuation range: $6B to $17B.
Here is a summary of the three models:
Other da Vincis ($554m to $1.4B): I can’t stress this enough. The most valuable painting in the world ($554m in 2022 dollars) is a “maybe da Vinci”. The Mona Lisa is worth so so so much more than that. The $968m insured value is also low because of how much the high-end art market has exploded since the 1960s (translation: a lot of billies out there that want to flex). Then you have the $1.4B valuation for The Vitruvian Man, which is just a notebook drawing (aka dude doing jumping jacks with his meat hanging out). This range of figures is low.
Uber-rich willing to pay ($1B-$9.2B): I kind of like the "uber-billies are willing to pay 2x the previous record price” rule based on recent sport franchise price tags. But since Mona Lisa is the trophiest of trophy assets, a 10x premium over the Salvator Mundi — which equals $5.5B — wouldn’t make me bat an eyelash. Elsewhere, if we use the Denver Broncos as the starting point for “trophy assets only a handful of uber-billies can buy”, then even $9.2B for the Mona Lisa seems reasonable.
Some type of Cash Flow model ($6B to $17B): This is already the most speculative approach in this article, so I won’t embarass myself with any further “analysis”.
Based on this entire hypothetical exercise, I’m pegging the current open market value of the Mona Lisa at $5B to $10B.
Who could be the buyer?
Well, there is a Change.org petition that 18k people signed to have Jeff Bezos buy the Mona Lisa and eat it because “Nobody has eaten the mona lisa and we feel jeff bezos needs to take a stand and make this happen.”
Now, that is a hypothetical.
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Links and Memes
Adam Neumann is back! The controversial WeWork co-founder (and subject of countless memes over the years) raised $350m from venture firm a16z for his new venture, Flow. It’s a residential real estate startup without a clear business model that looks to be providing some middle-ground between renting and owning. The deal is also a16z’s largest check ever.
With so many moving parts — including the fact that Neumann raised $22B for WeWork, which now has a market value <$4B — there were layers of different takes:
Level 1: Memes (obviously)
Level 2 = How could a16z do this? Tech reporter Eric Newcomer has good piece on the deal: 1) Many tech insiders laughed and said they wouldn’t do the deal because of Neumann’s reputation; 2) a16z has raised so much money ($12B) that they have to deploy it (per Newcomer, “All that money has got to go somewhere and what is more cash consumptive than a real estate business with Adam Neumann at the helm?”; and 3) a16z is planting its flag as a very very founder-friendly firm (as in, they’ll fund your idea regardless of what the media or other VCs think of you).
Level 3 = Could be a great deal: Flow’s business model is not exactly clear but the following Twitter discussions offers some potential upside: 1) Neumann personally put up $1B to buy 3k+ rental units (a16z could be getting a discount to that property and it’s owned vs. WeWork, which was leased and then sub-leased); and 2) Flow is just doing property management for rentals with maybe better tech that has valuable public comps (“No ownership for renters - Neumann’s business model is simply pursuing a [hotel management agreement] strategy for apartments. Given Hilton and Marriott’s valuation of $37b and $53b, respectively, a16z valuation of $1b is aggressive but justifiable.”)
Facebook’s VR effort: Earlier in the week, Zuck Daddy posted an underwhelming image of “France and Spain” from Meta’s VR Horizons World (on the left). It got meme’d obviously.
NYT’s Kevin Roose tweeted out what everyone was thinking, “It's genuinely puzzling that Meta spent more than $10 billion on VR last year and the graphics in its flagship app still look worse than a 2008 Wii game.”
Now, if you’re wondering whether it’s possible to get meme-ridiculed into product changes, the answer is yes…yes it is.
Last night, Zuck addressed the mockery on IG:
Hot Wheels collecting is a thing: I love me random business and finance rabbit holes. And one of the best sources for such stories is Alts.co, which writes about wild alternative investments. My personal fave is the economics behind Hot Wheels Collecting.
Three fun facts: 1) Hot Wheels has made 4B toy cars all time; 2) the most expensive Hot Wheels — a pink VW camper van — is worth ~$150k; and 3) estate sales are a gold mine for finding old Hot Wheels on the cheap.
Why do I care? Because my toddler tricks me into buying a Hot Wheels (or Matchbox) basically once a day. Please see this small sample size to prove it.
And here some memes:
Math checks out.
The state of the labor market in one tweet: