Anders Petterson of ArtTactic put together a presentation on the Warhol market for his talk at Artelligence yesterday. There are some astonishing numbers in it, none more so than the fact that Warhol paintings accounted for 17% of all contemporary-art auction sales in 2010. But there’s much more where that came from.
Between Warhol’s death in 1987 and today, the value of his paintings has gone up by more than 30 times; his estate, which was valued at some $220 million when he died, would be worth some $7 billion today. The public market in Warhols dwarfs that of anybody else: Jeff Koons and Damien Hirst between them, for instance, were just 3.1% of contemporary-art auction sales last year. And the money is all at the top end of the market: paintings which sold for more than $5 million accounted for 8% of all the lots, but 69% of the value. Privately the numbers can be even bigger than the $72 million auction record set by the Green Car Crash: a huge Mao has been shopped around in Hong Kong with a price tag of $120 million.
In public, the early work dominates the market: fully 90% of Warhols sold at auction, by value, were painted in the 1960s, with just 5% each from the 70s and 80s. And that includes big sales like the 1986 purple self-portrait which was sold by Tom Ford for $33 million last year.
So what’s going on here? How has Warhol come to dominate the contemporary-art market like this? There are three main reasons.
First is the sheer quantity of Warhol works: some 10,000 over his lifetime, many of which are still in private hands. That results in a steady flow of about 200 paintings a year coming up for auction, which does wonders for the liquidity of the market and the confidence that collectors have in the valuation of their works.
At this level, collectors are hyper-conscious of dollar value: Adam Lindemann told me at the conference that he would never buy a work if he knew its value was going to go to zero while he still owned it. But art is generally so unique that you never really know how much a piece might be worth until it’s sold. Lindemann, during his presentation, discussed a Barnett Newman work sold by Robert Scull in 1973 — a large zip painting, titled L’Errance, from 1953. Lindemann, like Judd Tully, put an estimate of $20 million on its value today — but no one really has a clue how much it might fetch, since Newmans come up for sale so very rarely.
Warhols, by contrast, are pretty much the easiest unique artworks in the world to value. You can never be entirely certain, of course, and sometimes they sell for well above the auction house’s estimate: the $72 million Green Car Crash was hammered down at $64 million, against an estimate of $25 million to $35 million. But with the proviso that error bars in the art world are always very large, it’s fair to say that they’re smaller for Warhol than for any other artist.
What’s more, there’s a lot more uncertainty to the upside than there is to the downside — because there’s a large constituency of collectors with a vested interest in supporting the Warhol market whenever it looks like it might be softening. Foremost among them is the Mugrabi family, which owns more than 800 Warhols: according to ArtTactic, they either bought or were the underbidders on a whopping 31% of all Warhols which came to market during the difficult years of 2008 and 2009. And in 2010 they kept on buying at auction, to the tune of $36.8 million. Essentially, there’s a “Mugrabi put” in the Warhol market, which has a lot of value to collectors.
And it’s not just the Mugrabis, either. Dealer Larry Gagosian also provides important support for the Warhol market, as do Philippe Segalot and Christophe van de Weghe. There are also major collectors who are usually willing to step in and buy at the high end of the market, including Peter Brant, Aby Rosen, Laurence Graff, and Stevie Cohen. All of them know that buying high only serves to increase the value of the rest of their collection.
Finally, Warhol has more institutional support than any other contemporary artist. There are lots of artists who get caught in an upward price spiral, as collectors compete with each other to own a limited number of works. But such spirals are prone to sudden collapse. If an artist is in many major museums, by contrast, that helps to reassure collectors that the work really does have long-term art-historical importance. ArtTactic reports:
The number of [Warhol] museum exhibitions has increased more than ten times since 1996, and in 2007, at the peak of the Warhol market, 127 museum exhibitions were showing Warhol. 26 of these were solo shows…
Another important back-up and support mechanism for the market is the Warhol Foundation… Through cooperative exhibitions, loans and permanent placement of works in museums nationwide, the Foundation has ensured that the many facets of Warhol’s complex oeuvre are widely accessible and properly cared for.
The big artists who are following the Warhol model these days are Damien Hirst, Jeff Koons, and Takashi Murakami. If they really want to learn from his success, the next step will be to assiduously cultivate museum shows around the world. It’s not easy to do that, since museums like to be independent when it comes to such decisions. But that’s what’s going to ultimately make the difference between a flash-in-the-pan, on the one hand, and the next Warhol, on the other.