Dali and the Cocky Prince and the Business of Art Museums
Craving for a K-Drama that satiates both your eyes with enthralling fine art and your taste buds with ambrosial gamjatang (pork bone soup) – that's Dali and the Cocky Prince!
The story revolves around Kim Dali (Park Gyu-young), a lady who is extremely well-versed in fine art and culture and director-owner of the prestigious Cheong-song Art Museum, and Jin Moo-hak (Kim Min-jae) who is an ignoramus in fine art but a highly savvy businessman and director of Dondon F&B which manages close to 400 franchise stores selling gamja-tang.
In an ironical twist of fate, Dali had a chance encounter with Moo-hak at the Saint Müller Museum in the Netherlands and introduced the parvenue businessman into the world of fine art appreciation and museums. When Dali's father passed away and she inherited/took over as director of the debt-laden Cheong-song Art Museum, it was Moo-hak who helped the financially naive Dali navigate the world of business and finance in order to sustain Cheong-song Art Museum viably.
The Vision. Under the management of Dali's father Kim Nak-cheon, Cheong-song Art Museum was not intended to be a money-making business. He envisioned the art museum to be a place where the common people would be able to afford to access, admire and enjoy fine art. At the same time, he also helped to support budding artists by exhibiting their work under the prestige of the museum.
Low Revenue, High Operating Costs. With low affordable admission fees and high operating costs, the art museum grew to be financially untenable over the years. With the singular focus to sustain the art museum, Nak-cheon mortgaged his luxury home and expended his personal goodwill and influence to continually secure loans from his network of friends and patrons.
Brink of Bankruptcy. Unfortunately, he passed away one day and Dali hurriedly flew back from the Netherlands to mourn his passing and take over her only inheritance – the Cheong-song Art Museum. With Nak Cheon's death, what remained of his goodwill and influence immediately dried up and creditors promptly recalled their loans in a bid to recover their money.
Within days, Dali gave up the collateralized luxury home and sold off her assets to help pay off some of the loans. But this would not be sufficient to sustain the museum as a going concern.
Before we go further, here's a reminder to our readers – do keep in mind that the Cheong-song Art Museum is not a real art museum in real life. It is a fictitious art museum existing within the the context of this drama.
Sustaining the Cheong-sang Art Museum could be a cakewalk if Dali agreed to re-unite with her first love Jang Tae-jin who has very deep pockets as the wealthy heir of the Segi Group. However, that was not an acceptable option for Dali. So, she had to quickly figure out the business of an art museum and find ways to manage costs, improve revenue or both.
Payroll. Cheong-song Art Museum has a lean management team of four (curators and engineer) and likely a few more operational staff in admission sales and general administration. So, while it is a struggle to pay out salaries in the flurry of loan recalls, the payroll cost can be considered reasonable and not unbearable.
Loan Interest. As the museum is debt-laden, there are also substantial interest costs to be paid out on a regularly basis to maintain credit-worthiness. We might assume the land and building costs are already paid for otherwise there will be further interest costs on property loan repayments to bear.
Acquisition Costs. From episode 1, it seems that the museum also has a good permanent exhibition as well as future work pieces in store so it probably would not need to purchase any more art pieces in the near term.
Event Costs. On occasion, art museums may organize special exhibition events (such as the exhibition in Episode 8) featuring certain themes and artists and invite prominent figures, influencers and art lovers to the event. Such activities will pile on additional costs in terms of event marketing, site decorations, logistics, catering and additional manpower resources for hospitality and security.
Insurance Premiums. Insurance premiums can be pretty hefty if the museum has a large collection of high-value art pieces or is located in a risky environment, for example, a location that is prone to earthquakes or floods. Insurance premiums can be in the range of 1%-3% of the total value of the insured collection. So, if the museum has a collection with a value of US$200 million dollars, the premium costs can be around US$2-3 million dollars.
Utilities and Maintenance. There are also the usual utilities and maintenance costs to keep the museum open and running for visitors.
Admission Fees. For museums such as Cheong-song Art Museum that are perceived as intellectual enterprises, admission fees tend to be affordably priced and thus, may not constitute a large percentage of the overall revenue.
Education Programs. Some museums offer paid education programs and courses as an additional revenue stream. It is not clear whether Cheong-song Art Museum holds such regular programs but apparently, the museum organizes an annual free education program for children as part of its tradition. Which means, no revenue here.
Sponsorships. This is usually the main source of funding for most museums and can be a substantial amount if the museum carries a certain prestige that wealthy individuals or giant conglomerates want to be associated with. This looks to be a potential source of funding for Cheong-song Art Museum if Dali can revive or restore the previous prestige of the museum before the bankruptcy rumors and other scandals.
F&B. Cheong-song Art Museum operates its own café, which languished under the improper management of Dali's errant cousin, Kim Si-hyung. In episode 8, Dali made the right decision to reclaim the management of the café.
With that move, she can either lease out the space to another F&B operator for rental revenue or manage the café directly with a viable business plan to profit. This is where our Dondon F&B hero, Moo-hak, can shine the brightest with his business acumen.
Retail Store. If there is space, Cheong-song Art Museum could also set up a themed store along the exit aisles of the museum that feature books, prints and products relating to fine art to further increase their revenue-per-visitor metric.
Leasing of Facilities. Another regular source of revenue for large museums is in the leasing of spaces and facilities. For example, in Guggenheim Venice, some of the exhibition areas as well as the Roof Terrace as well as the Nasher Sculpture Garden can be rented out for events and functions.
Well, that's what we will find out in the coming weeks.
Cheong-song Art Museum is the pivotal backdrop of this romantic comedy and will be the ideal environment to draw out the unique passions of Dali in the realm of fine art and Moo-hak in the domain of business development, and of course, their eventual passion for one another. 
