The event business has been hit hard by the lockdown—and Art Basel’s parent company is no exception. The Swiss MCH Group announced today that its income fell by 55 percent year over year compared with the first half of 2019. The company ended the first half of 2020 with a loss of $26.5 million (CHF 24.4 million).

MCH noted that the cancellation of Art Basel in Hong Kong in March was initially regarded as “an isolated occurrence,” but “the situation then took a dramatic turn for the worse in February, resulting in the cancellation” of Baselworld, Giardina (a gardening trade fair in Zurich). The rest, as they say, is history, with the Art Basel fairs in Switzerland and Miami being called off, as well as other major events like Masterpiece in London.

With an emergency bailout from media scion James Murdoch on at least temporary hold, the company is getting creative. On the same day as MCH’s first half results were released, Art Basel announced plans to launch a new collaboration with fellow art fair Fine Art Asia, an annual event taking place in Hong Kong in late November. The move suggests that the fair and its parent company are working hard to pivot to smaller, more local events amid the various states of global shutdown.

Under the arrangement, Art Basel has invited galleries to apply to participate in the so-called “Hong Kong Spotlight by Art Basel.” The special section within the broader fair will be a showcase for local and international galleries that have exhibition spaces in Hong Kong and have participated in the fair in the past, according to a representative. Fine Art Asia, which has been rescheduled from its typical October slot, will be held at the Hong Kong Convention and Exhibition Center in November.

Asked if smaller physical events and collaborations with local fairs will be used as a model going forward, an Art Basel representative told Artnet News: “We are constantly exploring and looking into opportunities to support and bring together the art world, both in person and online.” She pointed to a project at Kunsttage Basel earlier this month, “The Possible is Monstrous,” a collaboration between Art Basel and local museums to present public art in the city. Organizers have pledged to release more information on new initiatives in coming weeks.

Art Basel in Hong Kong. © Art Basel

New ideas will be necessary: The MCH division with the biggest drop in earnings was, unsurprisingly, MCH exhibitions, which saw its revenue fall 71 percent. The company’s live marketing solutions division suffered far less, with a 31 percent drop in earnings “due primarily to the fact that the USA was only affected… in the second quarter,” according to the report.

MCH said its current contingency planning is based on a scenario in which smaller events can be held in Switzerland in the second half of 2020. Regardless of how quickly live events return on a large scale, however, the company knew it was in need of a bailout in the social-distancing era and began searching for a new investor as well as the extension of bank loans and a loan from the Canton of Basel-Landschaft, as well as the conversion into equity of a loan from the Canton of Basel-Stadt.

The MCH Group found a new investor in Lupa Systems, James Murdoch’s private investment company, which volunteered to funnel $81 million (CHF 75 million) into the organization in exchange for 33 percent of the shares. Lupa Systems would help MCH “overcome the group’s precarious economic situation” and accelerate its implementation of new strategies, according to the report.

The investment—which was approved by more than 70 percent of the MCH shareholders in August—hit a snag, however. As the Financial Times reported in September, the Swiss Takeover Board, which must approve the move, opposed a part of the deal described as an “opt up” clause that would allow Murdoch to acquire as much as 49 percent of the company. MCH has filed an appeal with the Swiss authorities. For now, the plan is on ice.

“The board of directors is working intensively with all stakeholders to find solutions that will enable the necessary capital measures to be implemented without delay,” the report states.