Felix Salmon

Occupy Art

Felix Salmon
Nov 19, 2012 06:38 UTC

In the art world, the courtiers are revolting:

Dave Hickey, a curator, professor and author known for a passionate defence of beauty in his collection of essays The Invisible Dragon and his wide-ranging cultural criticism, is walking away from a world he says is calcified, self-reverential and a hostage to rich collectors who have no respect for what they are doing.

“They’re in the hedge fund business, so they drop their windfall profits into art. It’s just not serious,” he told the Observer. “Art editors and critics – people like me – have become a courtier class. All we do is wander around the palace and advise very rich people. It’s not worth my time.” …

Hickey is adamant he wants out of the business. “What can I tell you? It’s nasty and it’s stupid. I’m an intellectual and I don’t care if I’m not invited to the party. I quit.”

Hickey is only the highest-profile member of a pretty large group: people who are sick of playing bit parts in a game which has become entirely about money and ego, with the beauty and power of art having become just another commodity to be bought and sold. Art critic Jerry Saltz is another:

I still can’t stand it. How a handful of very very rich people with penises likes buying the work of a handful of artists with penises for very very high prices in public, in front of other people with penises and some very tall thin blond people with great shoes and no penises. Really.

The doyenne of art-market reporters, Sarah Thornton, has quit writing about the economics of art. She says there are a hundred reasons for doing so, including the fact that “tightknit cabals of dealers and speculative collectors count on the fact that you will report record prices without being able to reveal the collusion behind how they were achieved”, and that “it implies that money is the most important thing about art.”

Charlie Finch, too, smells the irrelevance of a world which has become irredeemably decadent in all the worst meanings of the word — to the point, this summer, at which he convinced himself that even the plutocrats would notice, and that the art market would be crashing hard, right about now. Obviously, that didn’t happen: it’s almost impossible to underestimate the obliviousness of the art-collecting elite, who are of course constantly surrounded by precisely the kind of courtiers — consultants, gallerists, even artists — who constantly tell them how perspicacious and important they are. Look no further than former commodity broker Jeff Koons, whose Tulips just sold for $33,682,500 at Christie’s: the last time I saw him he was in Davos, palling around with a Ukrainian oligarch, and generally solidifying his reputation among the people who really matter. Insofar, of course, that the people who really matter are the people you want to continue to funnel millions of dollars in your direction.

No, Charlie, the art market oligopoly system isn’t going anywhere: if anything, it’s more entrenched than ever. But the people without millions of dollars, the people who try to talk about art but find all conversations ultimately being about money — those people are, finally, getting fed up.

There’s long been a disconnect between critical acclaim and high prices, but so long as the art market pumped money into the broader art ecosystem, no one really minded that. Rather, what seems to have changed is that art — art itself, divorced from commerce — has been drowned in the flood of money. Even the most highbrow museums, these days, only devote major shows to artists who have proved themselves winners in the great game of selling to plutocrats.

This critique, of course, is not a new one, and the Occupy Museums website puts it well:

Museums must be held accountable to the public. They help create our historical narratives and common symbols. They wield enormous power within our culture and over the entire art market. We occupy museums because museums have failed us. Like our government, which no longer represents the people, museums have sold out to the highest bidder.

What’s new, I think, is the way in which such sentiments have started infecting much of the public face of the art world. Not everywhere, to be sure. Where there are markets, there will always be cheerleaders and outlets like Art Market Monitor serve the auction houses in much the same way that CNBC serves the NYSE. But now we have Jerry Saltz half-seriously proposing that all art just be sold at a flat price, and we have Sarah Thornton complaining about how tax evasion has become endemic in the market, and we have Larry Gagosian, in his latest court deposition, squirming when asked how a painting which was consigned to a New York gallery, and which was sold to a US resident, somehow managed to get sold out of London. How did the London gallery manage to acquire the work? “I don’t know the answer to that,” replies Gagosian.

Or to put it another way, the art market has stopped being a source of fascination and crazy numbers, and has started to be a source of sheer disgust. The auction records will probably continue to fall: the small group of ultra-high-end art collectors cannot easily be chastened. But I’m beginning to see the stirrings of something else: a more supportive and democratic art world, taken seriously by respected gatekeepers, which increasingly views the twice-yearly shenanigans at Sotheby’s and Christie’s as an obscene sideshow rather than as a true gauge of value. The shiny art selling for tens of millions of dollars is so dumb, and the caricatures who would emulate its success are so debased, that a lot of really talented artists and critics and curators and even collectors don’t even want in any more.

If you look back and forth between art collectors and rapacious venture capitalists, you rapidly come to the conclusion that if you compare the two groups, the art collectors come out so much worse. They’re similar in many ways: you have the “angel” early-stage investors who go bargain-shopping among the unknowns, all the way through to the big-money late-stage investors who make a fortune by investing in established names. And of course you have the majority of investors who don’t actually make any money at all. But at least there’s something honest about the VCs, and at least you can say that they sometimes create value.

The world of high-end art collectors, by contrast, has reached a level of obscenity that the art world more generally can no longer ignore. It’s been clear to the more politically-minded for a while, but now we’re seeing the mainstreaming of attitudes which used to be found only on the far left. Enough of living in a world where an artwork without resale value is worthless. Enough of feeling jealous when some idiot starts selling for ridiculous sums. Enough of a world where the levels of inequality make Nigeria seem positively egalitarian. Yes, artists need to make money, and yes, big collectors shower ridiculous sums onto the art world. But that money isn’t trickling down, and it certainly isn’t respectable. Here’s Thornton:

I have no problem with rich people. (Some of my best friends are high net worth individuals!) But amongst the biggest spenders in the art market right now are people who have made their money in non-democracies with horrendous human rights records. Their expertise in rising to the top of a corrupt system gives punch to the term “filthy lucre.”

Remember, this is no bedraggled Occupy activist writing these words; this is Sarah Thornton, who spent an entire chapter of her art-world book swimming laps at the Hotel Cipriani in Venice. Similarly, Dave Hickey was an art dealer himself, once, and has devoted his entire career to helping young artists become commercially successful. These people made their peace with the art market decades ago — but now, they are saying, it has gone too far.

One of the reasons why auctions attract so much fascination is that they’re pretty much the only place where you can see millionaires and billionaires competing, in real time, to see who can spend the most money on a given object. It’s quite a spectacle — but it has very little to do with art. Or at least, it has very little to do with whatever it is that most art lovers love. It’s fine to commercialize art, to sell it, to make money off it. Indeed, I wish that many more fine artists could do so. But let’s do so on a human scale. Because today’s art market is so much less than that.


One point Salmon alludes to is that beauty is no longer considered necessary in art. Fine draftsmanship, skill in applying paint to canvas in a beautiful manner, with a subject that might be sublime or quotidian, but none the less pleasing to the eye, is no longer considered worthy of respect in the rarified world of the avant-garde and its rapacious collectors. It’s time to bring back artisitc talent to the artworld, and leave the performance artists and the non-art of those like Jeff Koons behind.

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How Larry Gagosian is like Goldman Sachs

Felix Salmon
Nov 9, 2012 18:10 UTC

My favorite part of the Gagosian deposition starts on page 283.

A bit of background: Charles Cowles asked Larry Gagosian to sell a painting for him, Lichtenstein’s Girl in Mirror. They had an agreement that Cowles would receive $2.5 million of the proceeds, but then Gagosian discovered that the painting was damaged, and also the global financial crisis happened, and it became pretty obvious that the work wasn’t going to sell for anything like that much money any time soon. At the same time, Gagosian was in negotiations to buy another painting from Cowles, for $2 million. Cowles was hesitant to accept — but then Gagosian offered $3 million for the pair, and Cowles said yes.

What Gagosian knew but Cowles didn’t, at this point, was that another collector, Tom Dean, had offered $2 million for the Lichtenstein. What Cowles knew but Gagosian and Dean didn’t was that Cowles didn’t actually own either of the works: one belonged to his mother, and the other had been pledged to the Metropolitan Museum.

To the transcript:

Q. Once you received an offer from Tom Dean for $2 million, wasn’t it in your interest to offer Charles Cowles as little as possible for the painting so that you could maximize your profit?

A. I didn’t have confidence that Tom Dean’s deal would necessarily close, but it gave me what I felt a little more confidence to make an offer.

Q. You can answer my question now.

A. That’s my answer.

Q. Sir, it was in your interest in your dealings with Charles Cowles in July or August of 2009 regarding the ultimate purchase by you of the Lichtenstein?

A. Right.

Q. To pay Charles as little as possible, correct? Sir, it’s a yes-or-no answer.

A. I just don’t know how to answer that question, honestly.

Q. Okay.

A. I really just wanted to get him an offer that he would accept for both pictures because we were stuck with the Tansey, and I felt that this extra million would appeal to him because it was a larger sum, and it did. He certainly had the prerogative to reject it. He never asked me what anybody was paying. He never asked who the buyer was, what they were potentially going to pay. He just seemed to want to get an offer.

Q. Because he never asked, you felt absolutely no duty to tell him, correct?

A. I didn’t feel a duty to tell him, because there are many transactions where a seller will just accept a certain amount of money and they don’t care what you sell it for.

The Q here is David Baum, of SNR Denton, representing Jan Cowles, the true owner of the Lichtenstein. The A, of course, is Larry Gagosian. And boiled down, Baum is asking Gagosian whether his profit motive, in buying the painting, was to pay as little as possible. Gagosian’s answer is one for the ages: “I just don’t know how to answer that question, honestly.”

Gagosian actually doesn’t come off too badly in the transcript as a whole, but this is where he’s at his slipperiest. Baum says that it’s “blatantly unlawful under New York agency law” for the same person — in this case, Gagosian — to represent both the buyer and the seller in a transaction. I don’t know anything about New York agency law, but that seems bonkers to me. After all, Cowles asked Gagosian to sell the piece in the first place precisely because Gagosian represents a deep pool of sellers.

Gagosian is a broker-dealer, no less than Goldman Sachs is. (Well, maybe his balance sheet is a little bit smaller.) He matches buyers and sellers, and he has to deal with a large amount of counterparty risk. (One of the reasons why he says the Lichtenstein deal was fair is that he says he was worried about whether Dean would actually come through with the $2 million.) And of course he has to worry about lawsuits, too: there’s a revealing point in the deposition, on page 194, where Gagosian talks about the time “when this matter became a litigation”. I see him thinking of his business in various ways: there’s the gallery shows, there’s the fairs, there’s the secondary-market deals, and then there’s the litigations. They’re all just part of what it means to be a dealer, these days: sometimes a deal becomes a litigation, and that’s just an occupational hazard when you’re dealing with egos this big.

But at the same time, Gagosian really only ever has one business, and that’s keeping clients happy. As a result, you’ll never get him to admit that he views clients as counterparties, or is trying to maximize his take at the expense of theirs. After all, the real money, in this business, comes from relationships more than it does from deals: a healthy long-term income stream is always better than a one-off windfall. That’s the “long-term greedy” philosophy which defined Goldman, and it’s certainly the way to succeed in the art world.

Which is why it’s worth seeing how the transcript continues.

A. I didn’t feel a duty to tell him, because there are many transactions where a seller will just accept a certain amount of money and they don’t care what you sell it for.

Q. In this case, Charles had told you that the minimum he wanted was $2.5 million?

A. Right.

Q. Now, you were offering him $1 million, correct?

A. I was offering him $3 million for two paintings.

Q. $2 million for the Tansey?

A. Right.

Q. And $1 million for the Lichtenstein?

A. Right.

Q. And do you think Charles made a bad deal?

A. In Charles Cowles’ case, it’s hard to say because he didn’t seem to even own the paintings.

Q. Let’s assume he did own the paintings.

A. Maybe his indifference to the number reflected the fact that his mother owned the Lichtenstein, I guess, I don’t know. The guy was a train wreck, let’s face it.

Q. Did you know he was a train wreck at the time?

A. In retrospect, looking at the circumstances, yes, I see that he was a train wreck.

There’s no point in being long-term greedy if you’re dealing with a train wreck. The transcript continues with Baum asking Gagosian why he didn’t offer Cowles a $500,000 commission on the sale to Dean, rather than buying the painting for $1 million and selling it to Dean for $2 million. And once again, Gagosian says “I don’t really know how to answer that”. So let me guess what the answer is. The answer is that if Cowles were a valued client of the Gagosian gallery, one who could be expected to provide a lot of custom in years to come, then Larry probably would have given him the choice — would have asked whether he wanted to share in the counterparty risk, or whether he just wanted $1 million up front.

But Larry understood — since reading people is his business — that Cowles was a train wreck, and that he wasn’t building a relationship here, he was just trying to get Cowles to agree to a deal.

As we all know, Goldman Sachs isn’t nearly as long-term greedy as it used to be. Its business is mainly trading, rather than investment banking and advisory work; its counterparties go to wherever they can get the best price, rather than being at all loyal to one firm. As a result, transactions are characterized by greed on both sides, and Goldman’s highly-remunerated traders try at all times to maximize the profit they’re making. They would look at what Gagosian did in this situation and consider it the obvious thing to do: you make full use of your balance sheet, you maximize your profit, and you move on to the next trade.

Gagosian, on the other hand, wouldn’t necessarily agree with them. He’s a shark, but he’s a shark with a smile, and he doesn’t want his clients to be afraid that he’s ripping them off. I suspect that he’s going to win this case: I can’t see that he did anything illegal. But the money at stake here is tiny compared to the value of his reputation as an honest broker. And you can see why some collectors feel the need to hire high-priced art consultants whenever they deal with Gagosian — or any other art dealer, for that matter. The dealer always has the upper hand, and it behooves any client to take full advantage of any negotiation help they can get.


Jan Cowles should be suing her son for grand larceny, not Gagosian for doing his job. The prosecutor is grand-standing

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Art-loan datapoints of the day, Peter Brant edition

Felix Salmon
Sep 28, 2012 21:25 UTC

Miles Weiss and Katya Kazakina, of Bloomberg, have a fascinating article today about the art-finance activities of Peter Brant, who — like many big-time art collectors — is using much of his collection as collateral in order to borrow money. The Bloomberg report is pretty straight-down-the-line, however, which makes me suspect that they missed a rather more interesting story.

First up, there’s this:

Brant will also use part of the proceeds from the borrowings to finance the purchase of another major piece of artwork, the person familiar with the plans said.

Which is another way of saying that Brant is basically trying to put together a leveraged art collection, built on a combination of his own wealth, on the one hand, and borrowed money, on the other. That’s very dangerous, given that art by its nature doesn’t throw off any kind of interest or dividend payments. You can’t use cashflows from art to pay the interest on the debt used to buy it.

But then, more worryingly, we find this, a bit later on:

According to a separate September filing with New York state, Brant also pledged a 1963 Warhol work entitled “Merce” to Joseph Allen, his cousin and former business partner at White Birch. The 82-inch by 81.5-inch silkscreen of the late dance director Merce Cunningham sold in 1989 for about $2 million and is now worth $25 million to $35 million, said a person familiar with the piece who requested anonymity because the information is private.

I’m pretty sure the work in question is this one:

The piece is large, to be sure, and dates from the early 60s, which is the most valuable period in Warhol’s oeuvre. But an instantly-recognizable, iconic Warhol this is not. It’s smudgy, and monochromatic, and features Merce Cunningham — not exactly a household name, either in 1963 or today — with a chair on his back.

We don’t know, of course, how much money was paid for this painting in 1989: it wasn’t sold at auction. But there are some things we do know. For one thing, up through the end of 1987, the highest amount ever paid for a Warhol painting at auction was $660,000. In 1988, two paintings broke the million-dollar barrier, including Marilyn Monroe (twenty times), the first Warhol ever to sell at auction for more than $2 million. And in 1989, the year this painting was sold, there were three Warhols which sold at auction for more than $2 million: Shot red Marilyn, Liz, and Triple Elvis. Liz, of course, is Liz Taylor. All of these super-expensive Warhols were classic celebrity paintings.

If you had $2 million to spend and were in the market for a Warhol in 1989, you could have bought a large and colorful Race Riot, at Christie’s, for $1.76 million; or an enormous Flowers painting — twice the size of Merce — which sold at Sotheby’s for $1.54 million. Or even Double Elvis, which sold for $1.02 million. All of those would seem to be obviously more valuable paintings than Merce.

Merce is a pretty obscure work, which is why it’s hard to value. But we do have one public datapoint: in 1997, when Warhol works in general were maybe a tiny bit cheaper than they were in 1989, a smaller (35.5″ x 81.5″) Merce sold at Christie’s for a decidedly modest $112,500. To be sure, the bigger work will be more valuable than that. But not eighteen times more valuable.

And what about the idea that Merce is worth somewhere north of $25 million today? Well, there’s been precisely one Warhol sold at auction for more than $20 million in the past year, a Double Elvis which sold at Sotheby’s in May for $37 million. Go down the other Warhols which have gone for north of $20 million in recent years, and you’ll see a list dominated by Marilyns and Lizes and self-portraits, with a few iconic coke bottles and the like thrown in. Nothing remotely as dark or difficult or self-consciously Arty as Merce.

All of which is to say that you’d be well advised to take Bloomberg’s source, here, with a very large pinch of salt. I very much doubt that Brant actually spent $2 million on Merce in 1989, and I also very much doubt that it’s worth anything near $25 million, let alone $35 million, today.

But that doesn’t really matter, because Brant’s not selling it. Instead, he’s just borrowing against it. And when you borrow against art, you take it to a lender, and ask for a certain percentage of its value. It stands to reason that the numbers cited by Bloomberg are the numbers being used by Brant’s lender, who would seem to be Joseph Allen. Which means it’s entirely possible that Allen has lent Brant more than Merce is actually worth, thanks to a hugely overinflated valuation.

Not all Warhols have soared in value since 1989. Thomas Galbraith, of Artnet, put an index together for me of Warhol portraits of what you might call second-tier males: Joseph Beuys, Frank Stella, Sidney Janis, Bruno Bischofsberger, Miguel Berrocal, Gianni Versace, and Hartmut Stocker. He even threw Marlon Brando in there to sex things up a bit. And it turns out that every dollar you spent on one of those paintings in 1989 would be worth about $2.54 today. Which means that even if Brant did spend $2 million on Merce in 1989 — which seems improbable — fair value in 2012 would probably not be much more than $5 million.

What the Bloomberg story says to me is that Brant is playing all manner of weird games with his art collection, ascribing improbable values to certain works, and borrowing large sums of money against it to make it even bigger. Even as his “real” business — White Birch Paper Co — continues to struggle. And the lesson of this story, as far as I’m concerned, is that if Peter Brant comes up to you asking to borrow money against his art, treat the request very carefully. And don’t take anything he says at face value.


@Chris08, the simple answer is that the only people to become super-rich playing the art market are art dealers. Larry Gagosian, say. And I think the auction houses do send 1099s to their US consignors, but I can’t speak for all small dealers.

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Eli Broad’s inverted vision

Felix Salmon
Sep 20, 2012 05:42 UTC

Many years ago, Eli Broad was the very model of the modern enlightened art collector. In December 1988, he opened a 22,600-square-foot “lending library for art”, complete with soaring rhetoric:

Broad believes that the new facility is part of the solution to museums’ financial woes and a pointed example of how a collector can demonstrate social responsibility…

In the first place, he said, this center is not a museum. It’s a lending library. “We never wanted to have a building with our name on it that would compete with museums,” he said. “We loan works to museums and make them available to scholars.”

Broad explained that his foundation had already loaned art to more than 100 different museums, and that at any given point in time a good third of his collection was on loan somewhere. You don’t need to have your own museum for the public to see your art; in fact, if you do it the other way, by lending out your art to other museums, everybody wins. More of your collection can be shown at once; more of the global public can see your collection; and you get to support hundreds of great cultural institutions, rather than just your own.

The point here is that although museums lend out works too, it’s rarely a priority for them, and they never consider themselves a failure if they don’t lend out works. A foundation devoted to lending out works was a wonderful idea — and even 20 years later, when Broad decided that he would not donate art to his eponymous building at Lacma, it still seemed like it could be a good idea. As the NYT wrote at the time:

Whether this turns out to have been a good decision will ultimately depend on the character of the foundation. If they are stored and conserved properly, if scholars have ready access to them and if they’re made available for lending to museums, then nothing will be lost.

In offering to be a collaborator, not just a donor, he may be serving the public interest as well as his own.

I completely bought into this idea. In fact, in a column I wrote in April 2008, I suggested taking it one step further:

Broad’s new foundation will exist with the stated purpose of truly maximizing the public exposure that its art receives. That’s a proposition which could be very attractive to collectors wondering what to do with their legacy: they provide the art, and Broad will take care of all the paperwork and relationship management.

So if you’re buttering up a gallerist, maybe the best thing to do is no longer to hint that you’re thinking of donating your collection to a museum: better that you hint that you’re thinking of donating your collection to Eli Broad.

A year or so after writing that column, I met Broad for the first time, and I took the opportunity to ask him whether the Broad Foundation might be interested in accepting donations of art from other collectors who bought into its mission. He gave me one of those that’s-the-stupidest-question-I’ve-ever-heard-in-my-life looks, and basically ended the interview then and there.

With hindsight, it’s easy to know why: he’d already begun to sour on his own lending-library idea, and in truth the reason that he didn’t donate his collection to Lacma had nothing to do with the ideals of lending it out to other museums too. Instead, he was already planning what has now become what he likes to call The Broad — an edifice Christopher Knight aptly describes as “a $130-million vanity museum on Grand Avenue” in Los Angeles.

Why would anybody visit The Broad, or visit more than once? Broad’s collection is valuable to museums wanting specific works, but at heart it’s basically a list of trendy-and-expensive contemporary art, much if not most of it bought from a single dealer. (You know who.)

And so Broad has done something truly cunning: he’s taken his original, wonderful lending-library idea — and then he’s turned it inside out. On top of the $130 million he’s spending to build The Broad, he’s also pledged $30 million to MOCA, across the street. And boy did that donation come with strings attached. Here’s Knight:

The problem Broad faces is this: How can an inconsistent personal art collection, based almost entirely on judgments derived from a commercial market, get a desirable veneer of public stability and critical approval? Answer: For reinforcement, call in some revered Old Masters from across the street.

An exquisite 1949 Jackson Pollock drip-painting, a couple of landmark 1950s Robert Rauschenberg “combines,” a few of Mark Rothko’s greatest abstract fields of floating color — these and more are there for the borrowing from MOCA’s widely admired collection. Their reputations are settled.

Far from being a lender, Broad looks as though he’s going to be a borrower — of some of the greatest works in MOCA’s collection. Certainly MOCA’s director, hand-picked by Broad himself, isn’t going to stop him.

This is surely the ultimate dream for any self-made billionaire art collector: not to see your own works on the walls of a great museum, but to see the great museum’s works on your own walls.

Broad is still, in name, committed to the lending function of the Broad Foundation, but you don’t need a shiny Diller Scofidio edifice on Grand Avenue just to be a warehouse which lends out art. The problem with the lending library was that it didn’t glorify Eli Broad enough: it was too selfless to truly encompass the magnitude of Broad’s massive ego. And so The Broad was born, a permanent home for all that shiny Koons and Warhol. And a temporary home, it seems, for even greater works which can be borrowed from across the street.


Altruism, social responsibility, philanthropy. A collector also has to think about preserving his/her vision for generations to come. I do not see how Broad could be critisized for manipulating the press and sending out a decoy to the art community in order to preserve his legacy. No one would have done it for him. What bothers me is the fact that he has amassed a department store collection that lacks pluralism, and is a dull dialogue with what truly goes on in the world of contemporary art.

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Perelman vs Gagosian

Felix Salmon
Sep 17, 2012 15:59 UTC

Ron Perelman might be the single most notoriously litigious billionaire in the world, and so it’s probably a bit much to expect his latest lawsuit against Larry Gagosian to have much real substance to it. But what’s fascinating, reading the vast amount of news and commentary on the suit, is just how many people are taking it at face value. Even when they can’t agree on what that face value is.

What’s undeniable is that Perelman agreed to buy an as-yet-unfabricated Jeff Koons sculpture for $4 million. But was that a fair price? Emma Brockes, in the Guardian, says that $4 million was “an amount it didn’t turn out to be worth”, while Page Six says that Gagosian had “fraudulently undervalued” the sculpture at that price.

It’s easy to see why they’re confused: the Perelman complaint is inherently confusing. For one thing, there’s the torture it goes through trying to persuade itself that Larry Gagosian was acting as a fiduciary on behalf of Perelman:

The potent combination of Gagosian’s unparalleled knowledge and dominant position in the art world, along with the parties’ longstanding friendship, Gagosian’s position of trust in advising Plaintiffs regarding art acquisitions and value, handling consignments of works owned by Plaintiffs, and bidding for works of art on Plaintiffs’ behalf, made Gagosian a fiduciary of Plaintiffs.

This is all very silly: you don’t become a fiduciary because you’re friends, or because you’re knowledgeable, or any of these other reasons. In fact, the whole point of buying work from primary dealers like Gagosian is that they act as middlemen, on behalf of both the artists and the buyers. Gagosian was representing Koons; he had as much of a responsibility to Koons, if not more, than he had to Perelman.

Then there’s the whole question of the value of the sculpture. Perelman wants to have his cake and eat it, here: he’s basically saying that the sculpture was worth millions of dollars more than the $4 million he paid for it, but that at the same time he was somehow forced to sell it for just $4.25 million. By far the funniest part of Perelman’s complaint is where he says that “upon information and belief, the value of works by Koons increase as delivery dates draw close and can sometimes double in value shortly after delivery”.

This, in a nutshell, is Perelman’s case: when he bought the piece in 2010, he bought it at a fair price of $4 million, but when he bartered it back to Gagosian in 2011, it was worth much more than that, and Gagosian should have given him much more than $4.25 million in credit for it.

Of course, no one was forcing Perelman to barter the piece. As Gagosian’s suit lays out, Gagosian would much have preferred to be paid cash for the pieces that Perelman bought, rather than being paid in bits and pieces of other art, including the Koons sculpture. Perelman is rich enough to be able to find a couple of million dollars if he needs it; it was entirely his choice to part with the Koons at this particular valuation.

The reality of what happened here is that Perelman agreed to buy the Koons sculpture, on an installment plan. The sculpture was delayed — as many, if not most, Koons sculptures are. At that point, Perelman had a choice: he could wait for the sculpture to arrive, at which point he would own it, or he could ask for his money back. He chose the latter — and, in fact, Gagosian paid him an extra $250,000 for good measure.

What Perelman wanted to do — and what Gagosian wouldn’t let him do — was flip the sculpture, for much more than he paid for it, before it had even been fabricated. Finding himself unable to do that, he ended up taking Gagosian to court.

Now Gagosian, as Koons’s dealer, can get up to those kind of tricks: he reveals in his own suit (check out paragraph 36, on page 8) that he did indeed sell the as-yet-unfabricated Koons sculpture to someone else as soon as he got it back from Perelman. I wouldn’t be at all surprised if the sale price was significantly more than $4.25 million.

Perelman, here, basically wants to be able to get those extra millions. But he doesn’t know who Gagosian sold the sculpture to, and he doesn’t know how to sell unfabricated sculptures, and so he feels forced to go through Gagosian when he wants to sell his Koons. If he really knew the art market, he could have entered into a contract to sell the sculpture, as soon as it arrived, to any third party he wanted. But instead, he let it go, at more or less the price he paid for it. Because, although he’s a very rich man, he’s no art dealer.

Hidden between the lines of these suits is the invidious idea that contemporary art can and should rise in value extremely sharply, and that the people buying that art can and should make a large cash profit when they sell it. The truth, of course, is that it’s the dealers who make the large cash profits, because it’s the dealers who have all of the priceless information about which buyers are in the market for which works at any given time.

Collectors like Perelman want to free-ride on the work the dealers do, and they get upset when they aren’t able to. They’d be much happier if they just bought art they loved, at a price they were comfortable with, and didn’t try to make money at the same time. But then again, if they were that kind of person, they probably wouldn’t be billionaires.

Larry Gagosian, more than any other individual in the history of the world, has perfected the art of selling to billionaires. A large part of that sales pitch, I reckon, involves explicit or implicit talk about the rate at which the value of the art he’s selling is going to rise in the future. In that sense, the Perelman lawsuit is just Gagosian’s own rhetoric coming back to bite him: Perelman is asking for just recompense when he sells a work which has gone up in value since he bought it.

But this particular suit, I have to say, is utterly ridiculous, and will almost certainly get thrown out of court.


Here – you all can decide for yourselves how ‘open-’n-shut’ this case is –

“In Wolf, this is the California Court of Appeals definition:

A fiduciary relationship is “‘any relation existing between parties to a transaction wherein one of the parties is in duty bound to act with the utmost good faith for the benefit of the other party. Such a relation ordinarily arises where a confidence is reposed by one person in the integrity of another, and in such a relation the party in whom the confidence is reposed, if he voluntarily accepts or assumes to accept the confidence, can take no advantage from his acts relating to the interest of the other party without the latter’s knowledge or consent. . . .’” (Herbert v. Lankershim (1937) 9 Cal.2d 409, 483; In re Marriage of Varner (1997) 55 Cal.App.4th 128, 141; see also Rickel v. Schwinn Bicycle Co. (1983) 144 Cal.App.3d 648, 654 [“‘A “fiduciary relation” in law is ordinarily synonymous with a “confidential relation.” It is . . . founded upon the trust or confidence reposed by one person in the integrity and fidelity of another, and likewise precludes the idea of profit or advantage resulting from the dealings of the parties and the person in whom the confidence is reposed.’”].)”

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When museum curators confuse price and value

Felix Salmon
Jul 23, 2012 03:17 UTC

Back in February, Janet Novack had a short piece in Forbes magazine, and a better, more detailed blog post, about one of the more bonkers tax fights out there: the one between the IRS, on the one hand, and the heirs of Ileana Sonnabend, on the other. Basically, Sonnabend owned a Robert Rauschenberg masterpiece, called Canyon, which cannot be sold — not even to a museum — because it includes a bald eagle. But the IRS wants her heirs to pay inheritance tax on it at a $65 million valuation, over and above the $471 million they’ve already paid in inheritance tax on other Sonnabend artworks they were bequeathed.

Novack couldn’t get a good explanation of where the $65 million number came from, although she did talk to the heirs’ lawyer, who said that the head of the IRS art panel, Joseph Bothwell, had said that even though it’s illegal for anybody to buy the work, “a recluse billionaire in China might want to buy it and hide it”. Which hypothetical Chinese billionaire was apparently enough for the IRS to ask for $29 million in taxes, plus a $12 million penalty for misstating the value of the work so grossly? Apparently what the estate should have done is mark the work not to where it can be sold legally (it can’t be sold legally), but rather to where it might conceivably be sold illegally, should there be Chinese billionaires interested in such things.

Today, the NYT’s Patricia Cohen picks up the story. She only really adds one thing, but it’s a very fascinating thing: she spoke to Stephanie Barron, who sits on the IRS’s Art Advisory Panel, and who was one of the group of people who jointly came up with the $65 million figure.

She said that the group evaluated “Canyon” solely on its artistic value, without reference to any accompanying restrictions or laws.

“The ruling about the eagle is not something the Art Advisory Panel considered,” Ms. Barron said, adding that the work’s value is defined by its artistic worth. “It’s a stunning work of art and we all just cringed at the idea of saying that this had zero value. It just didn’t make any sense.”

The assumptions baked in to this are both jaw-dropping and entirely unsurprising at the same time. Barron is the senior curator of 20th-century art at Lacma, which puts her at the pinnacle of the non-profit art world, the place where art is supposedly valued just for its own sake and not because it’s worth lots of money. And yet, faced with a literally priceless work of art, Barron and her fellow panelists “just cringed” at ratifying precisely that concept. If a work has great artistic value, in Barron’s view, it must have great financial value as well. And, conversely, if a work has no financial value, then it cannot have artistic value.

I’m sure that Barron would push back at the idea, expressed at one time by Tobias Meyer of Sotheby’s, that the most expensive art is the best art, and that there’s some kind of direct correlation between price and quality. But in a weak sense, she is clearly invested in the concept. While it’s common to find unlimited editions in museum design collections, they’re rarely found in museum art collections, precisely because they lack the artificial scarcity that confers financial value.

Over the course of the past 100 years or so, various artists, with varying degrees of success, have attempted to distance themselves from the art market and make work with no financial value. Rauschenberg himself, actually, was one of them: he was an early and important player in the world of performance art. But high financial valuations get attention, and museum curators are easily forced into a stance of worshiping those valuations, even if such a stance doesn’t at first come easily to them.

The way the art world works is that collectors collect art, and museums collect collectors: that’s how great museum collections are built up. Collectors are always rich, and while once upon a time that meant there was a lot of old money in the art-collecting world, those days are over now and the world’s biggest art collectors are nearly always new-money self-made men.

Now: suppose you’re a museum curator, and your job is to flatter some billionaire collector so that he will end up donating his collection to your institution. While you will surely talk about his great eye, and subtly disparage some hedge-fund whiz-kid without nearly the same degree of connoisseurship, there’s one thing you’ll never do, which is suggest that maybe there are much better collections out there which aren’t worth nearly as much money. For new-money art collectors, the art market is a constantly evolving judgment on what they have bought: if your art has gone up in value then that means you have a great eye and you’re very perspicacious; if your art has gone down in value, then that means you fell for some trendy fad, you fool. At its highest levels, art collecting is a highly competitive game — and mark-to-market valuations are the way that collectors keep track of who’s winning.

Ileana Sonnabend, who died with a billion-dollar art collection, surely ranks among the very best at playing that game. But at the same time she was the kind of person who would love Canyon, her Rauschenberg combine, all the more because it had zero financial value. And I’m quite sure that if she was on the Art Advisory Panel, and Canyon was owned by someone else, she would have taken great pleasure in assigning that work a value of $0.

For Stephanie Barron, a work’s financial value is defined by its artistic value. But for people like Robert Rauschenberg and Ileana Sonnabend, that was never the case. They both died wealthy, thanks to the art world. But I think they would have been genuinely horrified at Barron’s idea — the concept that if Canyon is worth nothing financially, then it must be worth nothing aesthetically. It’s a dangerous and invidious notion, and while it might fly with big-name LA collectors, it really has no place in any museum devoted to art rather than money.


“There are people who know the PRICE of everything, but the VALUE of nothing”. (Oscar Wilde)

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Eli Broad and the Gagosian consensus

Felix Salmon
Jul 13, 2012 00:58 UTC

I just arrived in LA, where the news that Leon Black was the buyer of The Scream is taking a decided back seat to the saga of MOCA. Just today, four life trustees of the Museum of Contemporary Art here wrote a letter to the LA Times distancing themselves from the direction it is taking, and another one — artist John Baldessari — resigned from the board entirely, becoming the fifth board member to do so since February.

The proximate cause of the latest storm was the firing of respected curator Paul Schimmel — and not even by MOCA’s new director Jeffrey Deitch, but rather by the man who brought Deitch in, Eli Broad. Broad tried to explain himself in an LA Times op-ed this week:

It became clear to the board that it needed a director who could create exhibitions that would dramatically increase attendance and membership and make MOCA a populist rather than an insular institution. After an extensive search and interviews with 10 candidates, the board wisely chose Jeffrey Deitch…

In today’s economic environment, museums must be fiscally prudent and creative in presenting cost-effective, visually stimulating exhibitions that attract a broad audience.

Broad was roundly criticized by, well, pretty much everybody in the art world, with the LAT’s Christopher Knight blithely asserting that “a great art museum whose board of trustees has a combined net worth far in excess of $21 billion shouldn’t have financial problems”, and that none of the moves made by Broad and Deitch were necessary.

But the fact is that MOCA has had enormous financial difficulties for many years, that Broad is pretty much the only individual willing to write it large checks, and that therefore he pretty much gets to call the shots. If populist is what he wants, populist is what he’s going to get. And so Schimmel is out, and MOCA’s next big exhibition is going to be a disco show curated by LCD Soundsystem’s James Murphy, following up on a James Dean show curated by film star James Franco. These things are fast, cheap, and popular — the exact opposite of Schimmel’s meticulously-constructed and art-historically incredibly important shows. You can’t throw a show of Robert Rauschenberg combines together in the space of a few months.

And so while Broad is willing to continue to subsidize expensive things that fit in with his vision, such as the main Grand Avenue building opposite the site of his own new museum, the rest of the museum’s program is becoming a parody of the LA mindset, where the only thing that matters is the box-office gross.

Is the saga of MOCA of purely parochial interest in LA, or is it indicative of broader trends? I hope it’s the former, but I fear it’s the latter. Broad is the prime exemplar of the way in which rich Gagosian clients have devastated the delicate ecology of the art world, especially in places like LA where its roots had little depth to begin with. The LA art world is fascinating and storied and important and wonderful in many ways — but for most of its history it was largely out of view as far as the city’s broader popular culture was concerned, the province of a small and dedicated group, rather than of high-profile celebrities and billionaires.

But now that contemporary art has become internationalized and homogenized, it has increasingly little time for geographical idiosyncrasies. Larry Gagosian is the Robert Parker of the art world, imposing his taste on institutions across the planet, via a group of nouveau-riche collectors who tend to buy whatever’s expensive.

Leon Black, it should be said, is not one of those collectors. He doesn’t buy trendy contemporary art: instead, he has amassed a formidable collection of indisputably world-class pieces, including some of the greatest drawings in the world. He owns Brancusi’s Bird in Space, for instance, which is the great and timeless precursor to the shiny rabbit that Eli Broad loves posing next to on the cover of his memoir. And as Kelly Crow noted in her scoop about Black buying The Scream, as a work on paper, it actually fits into Black’s collection very easily. Yes, it’s a trophy piece. But Black didn’t buy it just because it’s often found on the side of canvas tote bags.

Black operates at the very heights of the art world, sitting on the boards of both the Metropolitan Museum and MoMA. My guess is that The Scream will end up at the former, just because MoMA already has a surfeit of iconic 20th-Century works. But wherever it lands, it will enrich rather than change the nature of the museum: both institutions are so big as to dwarf any single donor or artwork.

Move down a notch or two, however, and when you get to the level of MOCA, or of most of the thousands of other modern art museums in the world, a small group of Gagosian-educated plutocrats can set the artistic agenda much more easily. Whether it’s Eli Broad at MOCA or Dakis Joannou at the New Museum, or even whether it’s the way in which big art fairs have become public spectacles in their own right, ratifying the expensive and ignoring any kind of curatorial context, a new popular consensus is taking hold. And consensus is always boring.


Only time will tell.
But it seems to me that a longer term strategy might be to conduct a museum in more fiscally prudent (business profitable) sense as to raise their endowment so that they have the ability to purchase a “formidable collection of indisputably world class pieces”…..

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Why arts organizations love new buildings

Felix Salmon
Jul 5, 2012 22:21 UTC

In 2002, Richard Florida published The Rise of the Creative Class, and created a whole cottage industry of people — himself foremost among them — flying around the country and the world, telling cities how to attract creative people and thereby thrive. In truth, however, these cities didn’t need much persuading. Between 1998 and 2001, expenditure on creative-industry construction projects — theaters, museums, performing arts centers — quadrupled, from a little over $400 million per year to almost $1.8 billion. Here’s the chart, from Set in Stone, a major new research project from the University of Chicago’s Cultural Policy Center:


Clearly, around the turn of the century, cities decided that building new cultural centers was a great idea: in total, American cities spent some $16 billion on cultural construction projects between 1994 and 2008. But was spending those billions good for the creative class, for cities, or for creativity? That’s far from obvious. For one thing, the more money you spend on construction, the less money you spend on people:

Our survey evidence suggests that as a result of investing in projects during this period, many organizations also had to cut staff sizes significantly. The negative relationship between the number of cultural managers and per capita investment may just suggest that capital and labor act as substitutes, thus an organization that invests more in physical capital invests less in labor.

One case study can stand for many, here:

In Roanoke, Virginia, the art museum embarks on the facility planning process with the humble goal of expanding its gallery space, but over time, and partially inspired by the Guggenheim Bilbao, it decides to build a sprawling $68 million architectural landmark so as to redefine the city’s identity and boost economic development. The post-modernist design proves controversial as well as more expensive than originally anticipated. Once the new Taubman Museum of Art opens, attendance is far below estimates, while the cost of operating the new facility is far above them. To balance its books, the museum is forced into multiple rounds of layoffs and drastic increases in its admission charges.

Here in New York, I’ve been following the sad saga of Cooper Union, whose massively expensive new academic building seems to have been the final nail in the venerable institution’s coffin. Essentially, the college took out a monster mortgage to build the project, but projected no extra income that would allow it to make its mortgage payments.

And when I was in Aspen last week, I talked to two different museum directors, both of whom have very shiny brand-new buildings, about the whys and wherefores of embarking on such massive projects. One of them, in particular, admitted to me that the amount of money and effort that was poured into architecture was difficult to justify when looked at from the perspective of his institution’s mission. But he said that raising money for a new building was vastly easier, always, than raising money for an endowment, or for general operating expenses.

Which is not to say that it’s easy. “In our sample,” says the report, “the number of leadership transitions that occurred from the time the project was initially proposed to when it opened its doors to the public was striking”.

This is not surprising. Big architecture tends to be accompanied by big egos — the architects, the board members writing the big checks, the museum directors with outsize ambitions, the municipal burghers wanting to make their mark, and so on and so forth. Missions are easily subsumed to a general feeling that if something new and shiny enough is built, massive crowds and critical acclaim will automagically appear.

Buildings have names slapped on them, and you can see the money in a way that you can’t if you’re spending on things like curatorial staff or acquisitions or touring budgets or insurance. Most other forms of arts spending feel ephemeral, in a way that putting up some huge edifice doesn’t. Even if the money spent on that edifice would much better serve the mission of the institution in some other way.

What’s more, there’s something naturally ponderous about non-profit institutions housed in some kind of Big Architecture. Here in New York, for instance, consider Zankel Hall, the $72 million project to create a more intimate sibling for Carnegie Hall, which was designed to attract a younger, cooler, crowd. And then compare it to Le Poisson Rouge, a minimally-redesigned nightclub downtown, which manages to put on equally exciting programming at no higher prices, all while being run on a for-profit basis. All too often, if you build something expensive, all you really create is new layers of administrative headaches and bureaucracy.

That said, there are few major civic institutions which don’t live in grand buildings. Constructing something showy is a statement of ambition and intent — one which doesn’t always work out as planned, but which is probably a necessary precondition if you want to lay the foundations for a major arts organization which will last for many decades and which will have a national or international reputation. Maybe we should look at all this construction much as a portfolio manager might: there will be winners and there will be losers, but overall it has surely been a benefit to the nation. And frankly, $16 billion over 15 years is a pretty low sum — less than a dollar per US household per month, most of which was donated by rich philanthropists who would otherwise have given much less.

That’s the real reason that cultural institutions build, I think: directors reckon — rightly — that a large part of the money is additional to what they would otherwise receive, and that if they don’t build, they’ll never get it. When the philanthropically-inclined rich decide that mission-building is more important than edifice-building, that will change. I’m not holding my breath.

(HT: Badger)

Artnet’s silly indices

Felix Salmon
May 24, 2012 22:15 UTC

A couple of weeks ago, Artnet officially launched Artnet Indices — what it calls “the world’s first comprehensive set of art indices“. According to the press release:

It is now possible to measure price performance and other important market metrics for individual artists and artworks with the same rigorous standards used in financial indices.

Artnet’s Thomas Galbraith is quoted in the release as saying that “the artnet Indices provide quantitative market reports on the performance of artists like Andy Warhol or Damien Hirst, just as you might track a Fortune 500 company”.

I had a long lunch with Galbraith on the day that the indices were launched, and I’ve been going back and forth with him since then, trying to get a feel for how they really work. And as you might imagine, I have quite a few problems with these things.

To put this in perspective, here’s the chart that Artnet loves to send out to reporters, featuring its first index, the C50 index of contemporary art.

artnet C50 versus S&P500.jpg

The message of this chart is very clear. Contemporary art is an asset class, it’s a strongly performing asset class, and if you go back to 1988, it has significantly outperformed the S&P 500. If you start them both at 100 in 1988, for instance, then by 2009 the S&P would only have reached 354, while the C50 would have reached 578 — even after a big plunge from almost 1,000 in 2008.

In fact, however, an investment in the S&P 500 would have done much better than that: it would be 638 in 2009, thanks to the fact that stocks (unlike art) pay dividends. If you chart the C50 against the S&P 500 with dividends reinvested, the outperformance shrinks markedly:


What’s more, this chart takes the C50 at face value, as a vaguely investable index — when it simply isn’t. Here, for instance, are the top 15 artists in the C50 right now: there are lot of names there (Zao Wou-Ki, Zeng Fanzhi, Chu Teh-Chun, Zhang Xiaogang, Wang Yidong) who simply weren’t investable in 1988, and certainly weren’t in the C50 index back then.

I can’t show you a chart of how the 50 artists in the C50 index would have fared if you just bought those 50 artists and held them, because Artnet’s tools won’t let me combine more than 10 artists in one list. But here’s the next best thing: the middle 10 artists from the C50 list in 1988, charted, again, against the S&P 500. These are pretty big-name artists: Alexander Calder, Jim Dine, Helen Frankenthaler, Franz Kline, Robert Motherwell, Louise Nevelson, Kenneth Noland, Theodoros Stamos, Cy Twombly, and Richard Lindner. If contemporary art in general has done well, you’d expect these names to have done well. And, they have! But they haven’t outperformed the S&P 500.


Now the components of the S&P change over time, too — but the changing components have much less effect on the S&P’s performance than they do on the C50′s. And in fact, if you just buy and hold all the components of the S&P 500, you’re likely to outperform the index as a whole. Hot stocks enter indices, and undervalued ones drop out: I don’t have a chart here for the performance of the 500 components of the S&P 500 in 1988, but it would probably do better, not worse, than the index.

Not that that matters: the S&P 500 is investable. You can buy index funds or ETFs which very closely track the performance of the index, with stocks going in and out: they’ll sell the stocks which drop out, and buy the ones which come in. Since September 1989, there have been a total of 587 additions to the S&P 500: that’s about 25 per year, or 5% of the total.

By contrast, since 1988, there have been 111 additions to the C50: that’s about 5 per year, or 10% of the total. Which means that the C50 churns twice as fast as the S&P 500. And in the S&P 500, that churn can be positive: it can happen when when one constituent gets acquired. By contrast, churn in the C50 only occurs when one artist drops out and is replaced by another.

The result is massive survivorship bias. To demonstrate just how massive the bias is, here are the middle 10 artists of the C50 in 1988, charted against the middle 10 artists of the C50 in 2012: Alexander Calder, Damien Hirst, Roy Lichtenstein, Joan Mitchell, Pierre Soulages, Wang Guangyi, Christopher Wool, Rudolf Stingel, Liu Xiaodong, and Liu Wei. You can see that the current members of the index, had you bought them back in 1988, would have performed spectacularly well. The performance of the C50, then, is largely a function of the fact that hot artists keep on getting added — after they’ve become hot. It’s a classic case of investing with hindsight: if you only bought things which performed extremely well, then you would have made lots of money. Well, thanks for that.


The difference here — the 1988 artists end up at 477 in 2012, while the 2012 artists end up at 2,183 — makes a mockery of the idea that contemporary art is some kind of homogenous and investable asset class, or that someone who simply bought contemporary art in 1988 would have seen their assets perform in line with the C50 index.

What’s more, you’re actually seeing treble survivorship bias here. Artnet’s art indices are created by combining its individual-artist indices, and those individual-artist indices have their own survivorship bias built in. That’s because they break down an artist’s work into groups of “Comparable Sets”, and then combine the Comparable Sets in a price-weighted manner to get the artist index. As a result, if Gerhard Richter abstracts, say, suddenly go on a tear, then those abstracts will start making up an ever-greater part of the overall Gerhard Richter index. Both on an artist level and on the index level, whatever does well becomes highly weighted, and things which don’t do well essentially get ignored. (For instance, you can’t even draw up a chart on Artnet of the bottom 10 artists of 1988, because for some of them, Artnet hasn’t even bothered to put together an index yet.)

Finally, it’s no coincidence that Artnet’s first public index is its contemporary art index — the one part of the art world which has been on fire of late. It’s the third level of survivorship bias: if and when Artnet starts publishing its Old Masters index, say, you can be sure the numbers won’t look nearly as impressive.

But even within the contemporary art world, I would be shocked if one collector in a hundred actually saw the kind of returns that Artnet is implying are typical. The thing about the S&P 500 is that it’s meant to be reflective of the market as a whole: while some stocks will do better and other stocks will do worse, broadly speaking stocks perform pretty much in line with the S&P 500. And that’s simply not true of the C50. The overwhelming majority of contemporary art does not perform nearly as well as the C50. Even if you confine yourself to works bought at auction, if you hypothetically bought every work of contemporary art that was sold at auction in 1988, you wouldn’t come close to matching the performance of the C50 since that date.

In other words, stock indices like the S&P 500 are useful precisely because they act as a benchmark: something an investor can reasonably hope to achieve. No sensible contemporary-art collector, by contrast, could ever reasonably hope to see their collection appreciate in value in line with the C50.

The real point here is that contemporary art is always full of here-today-gone-tomorrow art stars, who create art which goes from being white-hot to being pretty much unsellable. In 1988, for instance, the C50 included where-are-they-now names like Theodoro Stamos, Pierre Alechinsky, James Havard, Jean Fautrier, and even Saul Steinberg, the New Yorker illustrator, who appeared just above Robert Rauschenberg on the list. Last year, the most expensive Steinberg sold at auction reached just $28,750.

And that was a much more staid time, when very few really contemporary artists ever appeared at auction. (There was no Basquiat on the list, for instance; no Schnabel, no Fischl.) Today, the list is not only very China-dominated, but also includes names like Rudolf Stingel, Christopher Wool, Mark Tansey, and Glenn Brown — true heirs to the kind of hype that surrounded the likes of Schnabel in the 80s. You can buy their art at auction, if you really want. But you’d have to be insane if you really thought you were making an investment.


Over the past twenty years, the group of top performing artists in the Contemporary art Market has changed and any index that aims to accurately track a market must adapt to reflect the shifting composition of that market. This is common practice, and evidenced by the S&P index delisting hundreds of stocks over the same time period covered by our Contemporary Index. Market indicating indices are macro level views, and we urge our customers to consider the more nuanced artist level indices. Indeed, should a collector or investor wish to view only a group of artist that were present at a particular point in time (for example, Felix’s consideration of how the 1988 C50 artists performed), artnet allows for the creation of unique custom indices. artnet’s new product allows users to create reports for a single artist or a group of artists, an extremely useful tool for collectors who want to monitor the performance of their art assets. Ultimately, the reports are very much in line with artnet’s core business philosophy of bringing much needed transparency to the art market. Something we don’t find silly at all.

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