The Art of Being Bill Gates

The Microsoft chieftain and his cohorts are collecting paintings at a breathtaking pace. Someday, they could make Seattle a cultural mecca

By Thane Peterson

I've never been invited to Bill Gates' home. But I'm told by someone who has that outside his personal library hangs Lost on the Grand Banks (1898), one of the masterworks of the American artist Winslow Homer. Gates paid $36 million for the painting in 1998, when he quietly bought it in a private transaction that saw what is believed to be the highest price ever paid for an American painting. The Room of Flowers by Childe Hassam, for which Gates recently paid $20 million, hangs inside the library. In the hallway, visible from the library, is Polo Crowd (1910), one of the greatest works by George Bellows. It was sold for $27.5 million at a Sotheby's auction in December, 1999, to an anonymous buyer now known to have been Gates.

Also hanging in the living quarters of Bill and Melinda Gates' 65,000-square-foot compound in Medina, a wealthy enclave near Seattle where many other top execs live (Amazon.com's Jeff Bezos, for one), are other important works of American art, including William Merritt Chase's The Nursery (circa 1890; $10 million) and Gate's first known major art purchase, Andrew Wyeth's Distant Thunder (1961), which he bought for $7 million in 1996.

I'm describing a few of the artistic treasures in the Gates' home to underscore what could be a very significant cultural event: Microsoft's founders and top executives have reached an age where they're starting to spend big money on art, books, and other collectibles. These purchases are usually made privately with very little fanfare. Often, they don't become known to the public. But, over time, the treasures will start to show up in museums and public exhibitions. And Seattle is likely to gradually emerge as one of the nation's most important cultural centers -- part of a general buildup of cultural influence on the West Coast already occurring in San Francisco and Los Angeles.

GREECE, ROME, SEATTLE?

  In another couple of decades, the Seattle Art Museum (SAM) could have one of the nation's most important collections. Just as Gates, 45, and many other Microsofties have built huge mansions and started collecting things to put in them, these same execs will start to think seriously about their own mortality when they hit their late 50s and early 60s. Given their demonstrated loyalty to Seattle, I figure many of the art works they've been buying will end up being donated to the SAM. "I think the Seattle Art Museum has the potential to be a great museum," says Allan Kollar, a local dealer of late 19th- and early 20th-century art who is said to have many clients among Microsoft execs. "There are," he adds, "some very important paintings coming into this region." The museum has another thing going for it: Bill Gates' stepmother, Mimi, is its director.

Gates himself is one of the world's richest people, with an estimated net worth of something like $63 billion (plus the $20 billion foundation he and wife Melinda have funded), while co-founder Paul Allen's $36 billion fortune is the world's third biggest, according to Forbes magazine. But even many far less well-known Microsoft execs and managers have enormous fortunes. For instance, Charles Simonyi, one of the company's (and Silicon Valley's) legendary programmers, is worth an estimated $1 billion, according to Forbes. In 1999, Forbes said William Neukom, Microsoft's top lawyer, was worth $625 million. Both are also important to Seattle's cultural life: Simonyi has a significant collection of contemporary art and Neukom is on the board of the SAM.

The ripple effects of Bill and Melinda's simple decision to decorate their new home shows how significant Microsoft could be in world cultural markets. "The [purchase of the] Bellows was the first time an American work ever sold [publicly] at the same levels as the Impressionists and other European art," says Kelly Devine Thomas, editor of ARTnewsletter, a sister publication of the magazine ARTnews that assembled the above compilation of Gates' art purchases. "He is really giving a boost to American art." Indeed, Gates anted up huge premiums for all of the works, according to ARTnewsletter. The price he paid for the Bellows, for instance, was ten times the previous record sale for the painter at auction. Gates also paid twice the previous record for the Hassam and a whopping 15 times the previous record at the time for the Wyeth, the newsletter says.

MISTAKES?

  Some experienced collectors think Gates may be overpaying. It's probably significant that Gates is believed to have bought Hassam's The Room of Flowers, and Chase's The Nursery, from Richard Manoogian, CEO of the Michigan building-products company Masco Corp., one of the most important -- and wiliest -- collectors of American art over the past 30 years. Manoogian won't comment, but it seems unlikely he would part with such treasures unless he was getting an extraordinarily good price. Indeed, Gates nearly quadrupled the $5.5 million Manoogian laid out for the Hassan at a Sotheby's auction in 1993. Another top collector I called scoffed at paying such prices for derivative American works that are generally considered far less important historically than European paintings from the same period.

The Microsoft execs are different from traditional businesspeople who collect. They tend to be unimpressed by the received wisdom among dealers and scholars. "They're very individualistic in their collecting. They collect exactly what they want, and they don't give a shit about impressing anyone," says Kenneth Rendell, a well-known dealer in historical documents who does work for Gates, retired Microsoft chief technology officer Nathan Myhrvold, and other Microsoft execs.

Myhrvold collects everything from rare books to old supercomputers. Simonyi is another case in point. His art collection contains works by such artists as Jasper Johns, Roy Lichtenstein, and Victor Vasarely. But what he loves best about them is the way the works he has chosen reflect the binary nature of computing. "My favorite is a Lichtenstein called On," he told me wryly. "It's a drawing of a light switch turned on."

DRIVING UP PRICES.

  Gates' collection may be small compared with Paul Allen's. Allen left Microsoft in 1983 after being diagnosed with Hodgkins disease and has since devoted a lot of his time to cultural pursuits, such as building the Frank Gehry-designed Experience Music Project rock-and-roll museum in Seattle. With the help of New York art dealer David Nash, formerly the head of the Impressionist painting department at Sotheby's, Allen is said by dealers to be putting together a very significant art collection that includes major European artists such as Cezanne, Monet, and Gauguin.

From the little that dealers will say, it appears a number of Microsoft execs have bought important American Impressionist and Hudson River School paintings -- which is probably one reason prices for such works have soared in recent years. It's also well documented that retired Microsoft president and current board member Jon Shirley and his wife, Mary, are building a very significant art collection. Among their holdings are works by Jackson Pollock, Willem de Kooning, Mark Rothko, Chuck Close, and Alexander Calder.

The Shirleys, who Forbes says were worth $900 million as of last year, are building a 23,000-square-foot home next to the Gates' in Medina -- partly to help house their collection. (To give you an idea of how big these places are, the Gates' spread used 4.7 million gallons of water last year, vs. 80,000 for the average home, and had a $24,828 water bill. Building the Shirley spread has created so much dust and noise that a neighbor has sued, and, at one point, Medina authorities threatened the Shirleys with a $500,500 fine.)

HINTS OF THE FUTURE.

  Microsoft is already giving a major boost to Seattle's museums and other cultural institutions. For instance, when the SAM recently needed money to create a new sculpture garden, Paul Allen and Bill and Melinda's foundation each anted up $4 million. The Shirleys gave $5 million, including money for the museum to acquire Eagle, a 39-foot Alexander Calder piece that previously had been on loan to the City of Philadelphia. The couple also paid to bring a major retrospective by the artist Chuck Close to Seattle in 1999 (Close told the Seattle Times that they own more of his paintings than any other collectors.) They also are major supporters of Seattle's Pilchuck Glass School, and gave $2 million to the nearby Bellevue Art Museum in 1998.

It doesn't end there. Jon Shirley also has a passel of classic Ferraris, including one custom built for the late film director Roberto Rossellini. And back in 1994, Gates paid $30.8 million for the Codex Leicester, a scientific journal handwritten and illustrated by Leonardo da Vinci. Myhrvold and a number of other Microsoft executives also collect rare books and important historical documents.

It's hard to predict exactly what effect Microsoft wealth will have on Seattle's cultural scene and the art market in general. "It's too early to tell what their intentions are," says New York art dealer Debra Force, who numbers at least one Microsoft exec among her clients. "These are all very young people." Whatever direction the Microsoft collection takes, it's going to create a very big wake in the waters.

Peterson is contributing editor for Business Week Online. Follow his column every week, only on BW Online.

Edited by Douglas Harbrecht