The Wall Street Journal-20080201-WEEKEND JOURNAL- Entertainment - Culture- Bono Inc- Expands to Art- Rock Star Woos Artists For Big Charity Sale- A --36-7 Million Hirst

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WEEKEND JOURNAL; Entertainment & Culture: Bono Inc. Expands to Art; Rock Star Woos Artists For Big Charity Sale; A $7 Million Hirst

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Rock star Bono is turning to the booming art world to help his altruistic brand, (Product) Red, raise much-needed cash and cachet.

On Feb. 14, Sotheby's Red auction in New York will sell as much as $28 million of art donated by Damien Hirst, Jeff Koons, Banksy and five dozen other top artists in a sale of a scale not usually seen in art or charity fund-raisers. Offerings include a 9-foot-tall medicine cabinet by Mr. Hirst estimated at up to $7 million; a red balloon- animal sculpture by Jeff Koons estimated at up to $1.2 million; and a new Jasper Johns gray watercolor estimated at up to $600,000.

The sale marks a shift in strategy for Red. Until now, the two-year- old commercial enterprise has teamed up with companies to license the Red logo on everyday products like $51.99 sneakers and $28 T-shirts, with between 40% and 50% of the profits going to the Global Fund to Fight AIDS, Tuberculosis and Malaria, a Swiss foundation spearheaded six years ago by former United Nations Secretary General Kofi Annan.

Between March 2006 and March 2007, Red partnered with four companies that generated $25 million in contributions. Since then, it has added five new partners and generated $34 million in contributions. (Three of those partners, Hallmark , Microsoft and Dell, are just now rolling out their products.) One early partner, American Express, says it has decided to not issue its Red card outside the United Kingdom.

Red's chief executive, Susan Smith Ellis, says the brand needs "oxygen" and that the auction is one step in an effort to move upmarket. The new Red Editions line includes a series of 39 red Zaha Hadid "Aqua" tables priced at almost $60,000 each at boutiques like London's Established & Sons. She hopes to line up other collaborations with art stars like Mr. Hirst who can attract a well-heeled clientele.

"The difficult thing Red faces is that it tried to make charity trendy for everyone," says Daniel Borochoff, president of the American Institute of Philanthropy. "And in a down economy, you need deep- pocketed supporters because the rest are worried about their mortgages."

So far, Red's contribution to the cause is comparatively small. Over the past six years, the Global Fund has attracted a total $18.4 billion and committed $10.1 billion for disease-treatment and -prevention programs in 137 countries, with nearly all the money donated by governments. Of Red's $59 million in donations, the fund has made $42 million in AIDS-related grants to Africa.

Last year the major auction houses sold $12 billion of art. Yet charity art auctions rarely raise more than $5 million apiece, auction houses say. Sotheby's participated in over 300 charity auctions last year that collectively raised over $150 million.

For the Red auction, Mr. Hirst says Bono invited him more than a year ago to bring his family to the south of France for a vacation. During their visit, the rock singer hired a boat, which the artist initially considered a "generous" gesture. Then one night Mr. Hirst says Bono "got me drunk, and at about 5 o'clock in the morning, he asked me if I'd do this [auction]." Mr. Hirst agreed to donate his own work as well as compose handwritten letters to induce 50 other artists to give.

Bono says he approached Mr. Hirst to steer the sale in part because the artist, who last year covered a human skull with roughly $24 million in diamonds, is "not afraid of the big beast of commerce -- he rides the back of it."

Some diplomacy was required to bring together traditional art-world rivals. Bono and Mr. Hirst asked Sotheby's and the Gagosian Gallery to market the sale together and conduct it on Valentine's Day. To do that, the auction house had to push back a major auction of contemporary art in London so that it wouldn't compete for bidders at the Red sale in New York, even though rival Christie's is proceeding with its London sale next week as planned. Gagosian and Sotheby's funneled their invitations through a third-party mailing house because neither wanted to share its client roster. The pair will split as much as 10% of the auction's sales to cover administrative costs; the remainder goes to the Global Fund.

Sotheby's and Gagosian are using the sale to showcase some of their artists who haven't typically been seen in a New York evening sale, such as Bernar Venet and an art team called Gelitin. Sotheby's is privately brokering some sales of Mr. Venet's steel sculptures, and Gagosian recently showed Gelitin in its London gallery.

Participating artists were allowed to suggest prices for their donated works, but not every artist approached for the sale signed on. Bono says Chris Ofili declined. (A spokesman for Mr. Ofili says the artist had committed to another upcoming benefit.) Last week several pieces by African artists were added as a gift from collector Jean Pignozzi; only one African native, Yinka Shonibare, had been included in the sale's original lineup.

Artist Antony Gormley in London says he is "inundated" by requests to give art to fund-raisers. He accepted this time because he wanted to help Africa and he hoped the auction would be "the art world's answer to Live Aid." For Christmas, Bono sent a red iPod nano to Mr. Gormley and each of the other participating artists. "I was very touched," says Mr. Gormley. His sculpture of a man, "Insider IX/Weeds II," is expected to sell for up to $250,000.

Some see Red's high-end focus as proof that its business model needs tweaking. "Red's success has been up and down, and the next round will only get more complicated," says Russ Meyer, a chief strategy officer who tracks Red for the branding firm Landor Associates.

Bono calls his start-up's performance "incredible" when compared with sales of other products with nonprofit tie-ins. The Lance Armstrong Foundation says it took nearly four years to sell $70 million of yellow "Live Strong" wristbands at $1 a pop, and it has taken 25 years for Newman's Own Foundation to pull in more than $200 million.

Unlike these nonprofits, Red faces market pressure to show growth. Red charges an undisclosed licensing fee to companies to pay for its 16-person staff and London and New York offices. For the most part, Red has relied largely on the marketing budgets of its partner companies, which spent about $50 million in Red's first year, Ms. Smith Ellis says. (Red's own annual marketing budget is under $1 million.)

Artist Marc Quinn in London says he has been following Red's trajectory from afar, and agreed to donate "Red Sphinx," a white- bronze sculpture of Kate Moss in a heart-shaped yoga pose with red lips. It is estimated to sell for as much as $350,000. "Maybe this will convince other companies to give away more than a few cents at a time" to charity, he says. "I mean, we're giving away the whole thing."