Felix Salmon

The business of art fairs

Felix Salmon
May 7, 2012 03:36 UTC

If you’ve ever been to Randall’s Island before this weekend, chances are it was to see Cirque du Soleil — the transnational phenomenon which has taken an venerable yet largely impecunious centuries-old tradition, and turned it into one of the greatest money-spinners imaginable. Cirque du Soleil is, above all else, a branding triumph: it’s transformed circus acts into something which can be proudly sponsored by Infiniti and SunLife Financial.

Go to Randall’s Island right now, however, and while you might describe what you see as a circus, you won’t find any bags of popcorn or Chinese contortionists: instead, there’s 280,000 square feet of astonishingly trendy and expensive contemporary art. This is Frieze New York, and it’s has, in a single outing, managed to change the art world’s conception of what an art fair can and should be.

Jerry Saltz, for one, was impressed:

Making my way into the immense white tent that houses the fair, I was shocked. The spaces are wide-open, well lit, generously proportioned, accommodating, sensual. Ceilings soar; a gentle curve in the tent stops vertigo. “How could an art fair feel good?” I wondered.

And that was before the way that the fair coddles the people who go there: Frieze has persuaded some great restaurants to serve food, it has a beer garden, a high-end coffee bar, and lots of VIP spaces and semi-VIP spaces (hello, Soho House) where the rich and self-important can feel rich and self-important. Plus, when the weather cooperates, as it did this weekend, you can wander along the waterline, check out the public-art projects outdoors, and generally enjoy the kind of pleasant day out which no visitor to the Armory Show has had in years.

All of this does come at a price, however — at least if you’re not a VIP. (Art fairs are the ne plus ultra of “free for those who can afford it, very expensive for those who can’t”.) Frieze is setting a new bar, in terms of admission, of $40 — plus another $20 if you want to drive there and park . (There’s no public transportation, but Frieze does provide shuttles from Manhattan.)

Before the fair opened, a lot of people wondered whether New Yorkers would make the schlep; the answer is that, it turns out, Randall’s Island is actually easier to get to than Venice or Basel or Miami. Today, Frieze announced that all Sunday tickets had been sold: “The number of tickets on sale is not very limited,” spokeswoman Belinda Bowring told me, “but we do cap the number so that the tent does not get too crowded – we have had feedback from galleries and they do not like the fair to be too crowded and therefore we try to find an optimum number.” Clearly the $40 price tag wasn’t enough to put off thousands of visitors. But equally clearly, this is not a fair which makes its money from entrance fees: the tent alone cost $1.5 million.

In many ways the most honest and important part of Saltz’s Frieze review comes in the comments section, where Saltz admits that “IF I DID have to pay $40.00 to go to an art fair I would NEVER EVER EVER go”. Saltz’s job is to look at this kind of art, but even he admits that the value of seeing all this work in the same place at the same time is significantly less than $40 — at least if you’re not going to buy anything.

And while Frieze co-founder Matthew Slotover tells the NYT that he is “very much pro-democratization and a larger engagement” with the general public, the fair’s location on a desolate island, and its sky-high entry fee, and even its galleries all mitigate against that. It’s the galleries who asked for — and received — fewer visitors, remember, and on Friday night I met one gallerist who was complaining that while she met some very high-end collectors on Thursday, the Friday crowd had altogether far too many “lookie-loos”.

In the run-up to the fair, Bowring suggested that I might be interested in talking to the lead sponsor, Deutsche Bank, for Felix TV. I was! The Deutsche Bank sponsorship looks and feels exactly the same as the kind of sponsorship that the bank might provide for, say, a Gerhard Richter retrospective at MoMA. But in this case, it’s not a non-profit museum which is the recipient of Deutsche’s largesse; instead, it’s a for-profit art fair, which is dedicated to making money both for its organizers and for its exhibiting galleries. I wanted to ask Deutsche: does the bank think that it is performing the same kind of public service, in sponsoring Frieze, that it does in sponsoring traditional museums? Or is it just trying to market itself to art-loving New Yorkers as a bank which Gets Art?

Sadly, Deutsche Bank never got back to us, so I haven’t yet managed to ask those questions. But the prominence of a major international bank as the lead sponsor of this fair comes as no surprise. It’s just another part of the branding game which has taken over the entire contemporary art world: banks, galleries, artists, curators, art consultants, even collectors all have their own carefully-tended brands, these days, and their prominence within the art world is indistinguishable from the degree to which those branding campaigns have been successful.

Which is why it’s fascinating to me that the imprimatur of high prices is still conferred almost exclusively on those artists with high-profile gallery representation. You’d think that the internet — a medium made for disintermediation — would by now have done a spectacular job of cutting out the middleman and allowing branded artists to sell directly to awed collectors. But that hasn’t happened, and galleries continue to happily introduce big-name collectors to their top artists, comfortable in the knowledge that neither artist nor collector is likely to try to do a deal behind the gallery’s back.

At Frieze, the Gagosian gallery had a stripped down single-artist exhibit of Rudolf Stingel paintings; I’m sure it did very well. But by the same token, if Stingel himself had booked out the exact same booth and exhibited the exact same paintings at the exact same prices, that would have been genuinely shocking, and the organizers would surely have had to deal with a series of extremely upset galleries, just for starters. There are branded artists out there without gallery representation — the Starn brothers are a good example. Given their fame and the number of art fairs every year, it would make perfect sense for them to just send their work from fair to fair, and live on the proceeds. But they don’t, and I’m sure that a large part of the reason is the institutional opposition that any such attempt would run into. Instead, they confine themselves to studio sales, institutional work, and the occasional online special.

The last visual artist to become enormously successful selling his work directly to the public was Thomas Kinkade, who was actually damaged, rather than helped, by the rise of the internet. In the age of Kickstarter and Etsy, one would imagine that there would be a crowded field of artists exploring the possibilities of this new commercial medium, but, it turns out, not so much. The highbrow version of Etsy, Artsy, is all galleries: no artists representing themselves. “We do not currently work with artists directly,” says the Artsy FAQ. “However, should you be represented by a gallery, please have them contact us about partnership opportunities.”

Representing yourself is not a good way to build a strong reputation in the art world: collectors tend to require an institutional imprimatur before they’re willing to believe the evidence of their own eyes. But it does strike me that art fairs like Frieze now have enough institutional imprimatur that if they accept a tightly-curated group of branded artists, people of the stature of Stingel or the Starns, then there probably wouldn’t be any shortage of willing buyers out there. But I’m not holding my breath. Galleries butter Frieze’s bread, and there’s no good reason for Frieze to place that relationship in jeopardy by encouraging artists to disintermediate the galleries.

There’s no shortage of small, artist-run collectives aimed at emerging artists. But just as Kickstarter is emerging as a very powerful platform for established artists, a high-profile art fair could, in theory, allow artists to apply for space just as galleries do. That would be good for artists, and good for collectors. If the fairs don’t let it happen, then they clearly exist to sell collectors to galleries, rather than to sell art to collectors. Remember that, next time you go to one of these things: you might think that the art is the product being sold. But, in fact, it’s you.


I’m a little confused with your example of the Starn Brothers — I know they have a West Coast gallery, Steven Wirtz (http://www.wirtzgallery.com/artists_fra me.html). I don’t think Wirtz has had much of their recent work; I’ve only seen “Attracted To Light” there. And it may be that they are using galleries strategically, without a single one being their prime / sole representative. This seems a lot more common in photography, where there editions are the norm.

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Art valuation datapoints of the day

Felix Salmon
May 3, 2012 15:11 UTC

As you have no doubt heard by now, The Scream sold at Sotheby’s for $120 million yesterday, prompting Mark Gongloff to wax apocalyptic about “the big squeaky speculative bubble in the art world”. He’s absolutely wrong: whether there’s a bubble or not, this purchase was not speculative. The buyer, I’m quite sure, intends to keep it until he dies; this is not going to get flipped for some great profit. Still, this painting is a great example of exactly what sells for huge amounts of money these days.

Remember the Card Players which sold for $250 million? Or, for that matter, the Jeff Koons Rabbit I wrote about earlier this week, which is probably worth the same amount of money as The Scream, more or less? The three artworks all have something in common: they’re editions, broadly speaking. There are four Screams, five versions of the Card Players, and four Rabbits. And in each case, the value of any given work goes up, not down, as a result of the existence of the others.

munch.jpgThat’s because what people are buying, when they buy one of these pieces, is a cultural icon, something instantly recognizable. As Clyde Haberman says of the Scream, “if you’ve never seen a tacky facsimile of it, there’s a chance that you have also never seen a coffee mug, a T-shirt or a Macaulay Culkin poster”. And truth be told, it’s not exactly Good Art. Edvard Munch is a decent Norwegian symbolist, but to give you an example of what we’re talking about here, the painting on the right, Vampire, is the one which held the previous auction record for the artist, at $38 million. It’s really not all that far from what you find in any art class of tortured adolescents.

The real value of the Scream, then, the reason that a pastel on cardboard sold for $82 million more than the price of the oil-on-canvas Vampire, lies precisely in all those mugs and t-shirts and Home Alone one-sheets. Whatever was being bought, here, it wasn’t really art, in any pure sense. It was more the result of a century’s worth of marketing and hype.

And while the Scream is an extreme example of the phenomenon, it can be seen in every major modern and contemporary art auction. It explains pretty much all of Damien Hirst, for instance, not to mention Takashi Murakami, a man whose paintings go up in value proportionally with the number of Murakami Louis Vuitton handbags spotted in the wild.

Meanwhile, if you want to see a pure art market, one based on connoisseurship rather than branding, well, there’s no such thing. But one very interesting place to look is China, of all places — the market which westerners love to dismiss as the place where the only thing that matters is the label on your bottle of Chateau Lafite.

In fact, the Chinese market is much more sophisticated than that. The record price for a Chinese painting, $65 million, is held by Eagle Standing on Pine Tree with Four-character Couplet in Seal Script, a large piece by Qi Bashi dating back to 1946. Qi was a master, who painted the work at the age of 86, and who worked very much within a long tradition of Chinese art. There’s nothing revolutionary or iconic about this work: it’s just a masterful piece which can be located near the end of a very long tradition.

Or, to take another example, an old porcelain bowl, roughly the size of your hand, and looking like nothing so much as the thing which lives by the door where you keep your keys, sold for $27 million at Sotheby’s in Hong Kong last month. It might be a trophy, but it’s not an obvious, branded trophy in the way that the Scream is.

Now, I don’t think that the Chinese auction market is particularly transparent or reliable: I suspect that it’s used quite a lot as a way of laundering bribes. But it does frequently set records which don’t fall into the branded-object-of-fascination category. And for that alone it makes a refreshing change from what we’re seeing in New York.


“It’s really not all that far from what you find in any art class of tortured adolescents.”

Because they are all imitating Munch. This is sort of like saying Emily Dickinson is derivative of the formless poetry of high-school girls.

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Eli Broad’s conventional art

Felix Salmon
Apr 30, 2012 17:29 UTC

166249456.JPGEli Broad’s new book comes out tomorrow, and the cover alone speaks volumes. The title is “The Art of Being Unreasonable: Lessons in Unconventional Thinking”. And the way that Broad has decided to illustrate how unreasonable and unconventional he is? He’s posing next to Jeff Koons’s Rabbit.

Now I happen to be a fan of Rabbit: I think it’s a genuinely excellent and important piece of 20th Century art. I’m also not alone in that view. Ingrid Sischy explained it well, back in 2001, writing of the “Neo-Geo” show where it was first exhibited:

The piece that grabbed the spotlight was Rabbit, his flawless stainless-steel casting of an inflatable bunny. It was a 41-inch-high art-bomb that thumbed its nose at the aesthetics of high art and yet at the same time embraced them, a fusion of Pop and Brancusi. With its wit, its physical simplicity, and its characteristically Koonsian reference to sexual symbols and childhood pleasures, Rabbit has become one of the artist’s most famous and enduring icons…

Kurt Varnedoe, today the chief curator of painting and sculpture at the Museum of Modern Art, is one of many viewers who stayed put when he saw that silver bunny. He recalls, “There are just a few occasions in my art experience in New York where I’ve been sort of knocked dead by an object instantly. This piece was just riveting. You wanted to laugh, you were shocked, you were planted to the floor. I was galvanized by the object. It has such an amazing physical presence… ‘Uncanny’ is the word that comes to mind. There were so many different things going on at once in the piece. It was hilarious, it was smart, and it was chilling… It had that kind of Utopian high-gloss modern clarity to it.”

In 2001, Sischy estimated Rabbit’s value at somewhere in the $2-3 million range; today, it’s probably closer to $100 million. (One Rabbit reportedly sold for $80 million back in 2008.)

Rabbit exists in an edition of three, plus one artist’s proof; Broad owns the artist’s proof, which he bought from Koons in the mid-1990s when the artist needed money to pay the enormous fabrication bills for his Celebration series. Of the other three, two are promised to museums — the Museum of Contemporary Art in Chicago, and MoMA in New York. It’s almost the perfect artwork for a financially-minded collector. Because it’s part of an edition, it’s possible for the piece to be owned by MoMA and by Eli Broad at the same time. Because it’s owned by MoMA, it has the best possible institutional legitimacy. And because there’s a “spare” privately-owned Rabbit out there somewhere, Broad can mark his Rabbit to a private market in the piece.

In the book, Broad says that “people often think it’s strange how briskly I go through museums”: he explains that “I’m there to learn and apply my knowledge to our collections. As much as I would like to stay, I have to move on.” Basically, the job of a museum, in Broad’s view, is to ratify Broad’s own collection. In that sense it’s very different from art fairs, where he can go shopping and build his collection: “While I may dash through a museum,” he writes, “I do give myself time to take in artists’ studios and art fairs in Miami, London, Venice, and Basel.”

All of which is to say that Broad’s Rabbit is an example of unconventional thinking in much the same way as a Saudi oil well is an example of an unconventional energy source. Broad’s famous for buying most of his collection from a single gallerist, Larry Gagosian; the piece he chooses to pose with for the cover of his book is the most valuable and recognizable object he owns. It’s a piece which has been ratified by both museums and the market; a piece which is about as mainstream as contemporary art gets.

The cover of Broad’s book does not depict a man who’s secure in his own taste. Instead, it shows a man who collects trophies and prowls museums looking to make sure that he’s collecting the right ones. Yes, Broad’s collection is extremely valuable. But there’s nothing unreasonable about it.


$100 million, huh?

Proof that the 0.0001% are out of control.

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Why is Jonathan Sobel suing William Eggleston?

Felix Salmon
Apr 6, 2012 18:39 UTC

Both Kelly Crow, at the WSJ, and PDN have interviews with Jonathan Sobel, a photography collector who is now suing the legendary color photographer William Eggleston. Neither of them actually posts the suit itself, however; you can find it here.

At first glance this looks like what it is: one of the silliest lawsuits the art world has seen in a very long time. In order to win, Sobel will need to demonstrate two things, neither of which is true. Firstly, he’ll have to show that the value of his vintage Eggleston prints has been diminished as a result of Eggleston making a new series of much larger digital prints. And secondly, he’ll have to show that Eggleston had no right to make the new prints.

In reality, however, Sobel’s prints have probably gone up in value, not down, as a result of Eggleston’s splashy reintroduction to the contemporary art market, in the form of a Christie’s sale which raised $5.9 million and set a new record price for the artist. And in any case, Eggleston has every right to create new editions of his work. Sobel owns vintage 16″x20″ dye-transfer prints; Eggleston can’t make more of those. But creating a brand-new series of 44″x60″ digital prints is perfectly fine.

As Daniel Grant explains, print disclosure laws make explicit exceptions for prints of different sizes, or even just series which have different numbering. And Josh Holdeman, Christie’s international director of 20th century art, goes so far as to say that “I don’t know of any photographers who haven’t produced multiple editions of the same images”: this is undoubtedly standard practice in the art and photography world.

So what’s really going on here? Sobel is no naif, and it’s hard to imagine he thinks he really has much of a case. This suit is brought not for money, but out of a sense of being angry and aggrieved; of having his ownership violated

I haven’t talked to Sobel myself, but my feeling is that the motivation behind the suit comes from a few different feelings about what’s going on with the Eggleston market.

First of all, as PDN’s Conor Risch explained in a great article last month, the Christie’s auction was more or less an explicit attempt to wrest the Eggleston market away from photography collectors like Sobel, and reorient it towards deeper-pocketed contemporary art collectors. Here’s Holdeman again:

According to Joshua Holdeman, international director of the Christie’s photography department, the point of the sale was to establish a new market for Eggleston’s photography in the contemporary art world. “Eggleston has been kind of stuck in the old school world of the photography collectors for a long time, whose primary concerns are about process, print type, print date, etcetera,” says Holdeman.

Whereas the type of print and the exact date a print was made is “a huge deal” for photography collectors, Holdeman says, “for contemporary art collectors it’s much more about the object itself—they couldn’t care if it’s a dye transfer or a pigment print or whatever, as long as the object itself is totally amazing, that’s what they care about.”

“This is an attempt to start a migration of Eggleston from the quote unquote confines of the photography world into the larger context of the art world,” Holdeman adds.

This kind of talk is basically a slap in the face to collectors like Sobel — people who are used to being a big fish in the small photography pond, and who now find themselves small fish in the much bigger art pond. The writing has been on the wall since November 2011, when Eggleston officially joined Gagosian in Los Angeles, but the Christie’s auction was probably enough to tip Sobel over the edge.

It’s often a sad day, for photography collectors, when photographers join high-end art galleries and thereby become much more expensive. I can add a personal datapoint here: I’ve long loved Todd Eberle’s photographs of Donald Judd’s art in Marfa, Texas, and there’s one photograph in particular which I was interested in buying. But when I got in touch with Eberle, he told me to talk to Gagosian, since they’re in charge of selling his prints. And Gagosian, in turn, was perfectly happy to sell me a whopping great 50″x60″ print (plus frame) for $15,000. Even if I could afford that kind of money, I don’t have anywhere to put a photograph that big. But Gagosian isn’t selling the prints in the smaller sizes that photography collectors generally like.

The Gagosian announcement and the Christie’s sale, then, were a sign to Sobel that he wasn’t really wanted in the Eggleston world any more. But what’s going on here is not just a question of whether Eggleston is owned by the photography world or by the contemporary-art world. There’s another issue, too: are Eggleston’s images owned by Eggleston, or did he sell them, in some sense, to the people who bought his photographs?

The legal and moral answer to that question is clear: Eggleston’s images are owned by Eggleston. Sobel owns physical photographs, which have some kind of value. But Sobel, unlike Eggleston, has no right to reproduce those images. But after Sobel shelled out $250,000 for “his” photograph, it’s pretty easy to see how he felt some kind of ownership of what he was looking at, and felt that Eggleston had no right to start creating lots more versions of the same image. (In fact, Eggleston didn’t do that: while Sobel’s prints are generally in editions of 20, the new digital prints are in editions of just 2.) Of course, Sobel’s feelings are neither here nor there when it comes to the merits of his lawsuit, but they probably explain why he brought the suit in the first place.

I suspect that what was most galling to Sobel, however, was the fact that Eggleston had simply managed to conjure up $5.9 million for himself (or rather, for his foundation), without going out and shooting a single new photograph. Eggleston is quite explicitly following in the footsteps of Damien Hirst, here: Hirst was the first artist to shamelessly make millions of dollars by consigning new work directly to auction, much to the displeasure of the art world. And as a result, Hirst has gotten to a point where he, Hirst, captures most of the increase in the value of the global Hirst market — and Hirst’s collectors don’t.

What Sobel sees, when he looks at the Christie’s Eggleston auction, is a serious increase in the value of the Eggleston market, with the overwhelming majority of that increase accruing to Eggleston himself, rather than to collectors who were prescient enough to buy early. You can hear the whine quite explicitly in Crow’s article: Sobel used to own the most valuable Egglestons in the world, and he was very proud of that. And now he doesn’t. And he’s upset.

This is all very childish, of course — which is par for the course when it comes to the art world. And somewhere underneath it all, Sobel might even have a legitimate beef. Eggleston is 72 years old, and suddenly, after decades of being a photographic eminence, he’s deserting the photography community and throwing his lot in with Larry Gagosian and the contemporary-art crowd, just because that’s where the money is. Eggleston has had a devoted following in the photography community for a very long time, and his latest move seems designed to annoy his base, which is never a particularly wise thing to do. There might be lots of money in the contemporary world right now, but that world is fickle.

Here’s the thing, though: if the fine-art crowd ever gets sick of Eggleston, the photography crowd will always be there for him. They’re going to keep the Eggleston faith no matter what he does in his old age. Even if they act out sometimes by filing frivolous lawsuits.


W Eggleston is 80 +, living in sheltered accommodation. He is frail and elderly. Any recent decision to reprint images was probably made by his foundation/estate management.
They are doing what our capitalist society determines they should, capitalise on their asset. This has nothing to do with art, everything to do with art brokers.
An infinite number of copies of an image is exactly what modern technology allows which is why B & W prints made by Ansell Adams can command the prices they do.

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Annals of art world skullduggery, Larry Gagosian edition

Felix Salmon
Mar 28, 2012 18:19 UTC

Randy Kennedy has a good overview of the litigation going on between Jan Cowles, a prominent art collector, and Larry Gagosian, the world’s most prominent art dealer. He doesn’t provide or link to any of the primary documents, however, which can be found here, and they’re where all the fun is.

In a nutshell, Jan’s no-good son Charles got desperate for cash, and so sold her Lichtenstein through Gagosian without her knowledge or consent. What’s more, his desperation was so obvious to Gagosian that he wound up getting spectacularly ripped off: while Gagosian had initially promised him $2.5 million for the piece, the final payment to Cowles was just $1 million. Meanwhile, another version of the piece, which is an edition of eight, sold at Christie’s in 2010 for $4.9 million.

A lot of attention is focusing on the smoking email from Gagosian director Deborah McLeod, who was based in Gagosian’s Beverly Hills outpost, to the collector who ultimately bought the work, Tom Dean. “Seller now in terrible straits and needs cash,” she wrote. “Are you interested in making a cruel and offensive offer? Come on, want to try?”

Eventually, Dean came back with an offer of $2 million, with generous terms allowing him to avoid paying most of the price for six months. McLeod then talked to Gagosian personally, and told Dean that the deal was on:

Larry says the $2 mm will fly only for immediate payment, so he will buy it. If he succeeds in buying it for 2mm, he will do the 6 month payout for you.

This is quite funny, in hindsight, because of course Larry didn’t buy the piece for $2 million at all. He sold the piece for $2 million; he bought it for just $1 million.

With all of the focus on the emails, however, it’s important not to lose sight of all the revelations in the original complaint, including the extremely serious allegation that Gagosian lied about the condition of the piece in order to justify its very low sale price. The complaint also accuses Gagosian of essentially stealing the work from Jan Cowles:

Although Gagosian knew the Lichtenstein Work belonged to Mrs. Cowles, and not Charles, Gagosian made no effort to contact her, or her attorney-in-fact, Lester Marks, to obtain either any authority to remove the work from the apartment or to offer the work for sale to any third party. Nevertheless, on or about October 10, 2008, Charles purported to consign the Lichtenstein Work to Gagosian. Gagosian took delivery of the work from Mrs. Cowles’s apartment, and listed it as a consignment with the understanding that it would not be sold for less than $3 million, with Charles to receive no less than $2.5 million.

This is all extremely reminiscent of the way in which Anthony Marhsall allegedly sold a Childe Hassam belonging to his mother, Brooke Astor; you’d think that Gagosian would be a bit more cautious about such deals after the Astor case got so much negative publicity.

But what’s absolutely clear here, no matter who wins the legal case, is that the opacity, skullduggery, and information asymmetry in the art world should put off anybody who ever thinks they’re dealing fair and square with a prominent dealer. Charles Cowes was an art dealer in his own right — an art-world insider — and even he ended up getting ripped off by Gagosian.

I’ve heard a few stories, over the years, of what happens when collectors who own art try to sell that art through a gallery. In the first instance, the gallery is always very bullish, and promises to sell it for a high price at a modest commission. But then it somehow never sells, and the consignor becomes increasingly desperate, and eventually accepts a sum of money from the gallery which is a mere fraction of the amount originally mooted. It’s a standard m.o. in the gallery world: never sell anything too quickly, and wait instead for the seller’s need for cash to be as urgent as possible. That minimizes the amount the gallery needs to pay the seller, and therefore maximizes the amount the gallery can keep for itself.

Which is yet another reason why art is not an investment. You might have a good idea what a piece is worth, but you’re unlikely to ever be able to realize that kind of sum. Not unless you don’t need the money — and if you don’t need the money, you won’t want to sell it in the first place.



Maybe it’s an addiction to the deal that explains Gagosian’s vast wealth ? You can see this in many walks of life, including finance. It is an addiction, and those with it will probably never kick it.

Also, bear in mind what happens in public auctions. I get catalogues, if I’m interested I pop along to the viewings. There’s usually a few items “withdrawn from sale”. And that’s quite often because of ownership disputes. It’s endemic.

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How Damien Hirst recaptured his market

Felix Salmon
Mar 27, 2012 16:28 UTC

It should come as no surprise that the Damien Hirst retrospective at Tate Modern has caused editors across the UK to run articles about what it might mean for the Hirst market. After all, Hirst, more than any other artist, is famous in large part just because he’s expensive.

Thus do we get Sarah Thornton, in the Economist, writing that “many collectors of Mr. Hirst’s work hope that this show will reinvigorate his market”. Against that is Julian Spalding, who’s written an entire Kindle Single entitled Con Art – Why you ought to sell your Damien Hirsts while you can. And then there’s Hari Kunzru:

This isn’t just art that exists in the market, or is “about” the market. This is art that is the market – a series of gestures that are made wholly or primarily to capture and embody financial value, and only secondarily have any other function or virtue. Hirst has gone way beyond Warhol’s explorations of repetition and banality. Sooner or later, his advisers will surely find a way for him to dispense with the actual objects altogether and he will package concepts in tranches, like mortgage securities, some good stuff with some trash, to be traded on the bourse in Miami-Basel.

Kunzru starts off near the mark, here, but then veers wildly off course. What I think that all three of these writers are missing is the fact that the Damien Hirst market is largely nonexistent, and has been ever since the “Beautiful Inside My Head Forever” sale at Sotheby’s which was held the day Lehman Brothers filed for bankruptcy in 2008. Here, from Artnet, is Hirst’s annual sales volume at auction (the grey bars are all lots, the orange bars are the top ten lots):


What you’re seeing here is a speculative bubble in Hirst which grew right up until September 2008. After that, Hirsts became a luxury good, in many ways closer to a Prada coat or a bottle of Bordeaux than to artists with healthy secondary markets, like Gerhard Richter. For the past three and a half years, Hirsts have been something to buy, to consume: they’re no longer something that can be easily sold, let alone at a profit.

There is absolutely such a thing as the art market: a place where artworks are bought and sold, and where dealers and auction houses make money as the intermediaries finding the prices at which buyers and sellers can agree to transact. There isn’t, by contrast, such a thing as the Prada market: that’s a consumption market, where Prada makes goods, sets the prices unilaterally, and then sells them to as many people are willing to pay their price. (And given that Prada is in the Giffen Veblen goods market, often raising the price has the effect of raising the demand.)

Hirst, for better or worse, has moved himself out of the art market and into the consumption-goods market: he manufactures art works, sets the prices for them, and sells them to anybody willing to buy them. Once you have bought a Hirst, you then exhibit it as a way of displaying your wealth and, um, taste. Hirsts have not been a speculative investment since 2008, and I very much doubt the Tate retrospective is going to change that.

I don’t think this is a bad thing. Hirst, more than any other artist, has managed to capture the value of his works for himself. The global stock of Gerhard Richters is hugely valuable, and that value is at least one and possibly two orders of magnitude greater than the total amount of money that Gerhard Richter himself has made over his lifetime. The value of the art, in other words, has accrued to collectors rather than to the artist.

That’s not the case with Hirst: I suspect that of all high-profile artists, he has personally pocketed the greatest percentage of what you might call his global market capitalization. All too often, discussions of artists’ prices work on the assumption that higher prices, and higher dollar volumes, are always good for that artist. But I think Hirst has managed to disprove that rule. Collectors are not getting rich off his work. But he is.


two things. first, hirst’s total auction volume for 2011 appears to be at or slightly north of $25 million. i’d love to see you produce this chart for other artists, let alone living artists, to see who else sold $25 million in art in ’11. (i understand that these artnet charts are pricey, but it would give better context to your claim.) second, this chart is only about *auctions*. the whole reason ’08 shoots through the roof is because hirst sold the entire ‘beautiful inside my head forever’ exhibition through auction! but for this stunt, it would have been exhibited and sold through gagosian and the volume sold at auction would be materially smaller, much more in line with the other years on the chart. throwing in the downturn in the world economy and the art market during ’08-’11 you are really making a stretch here. feeding in to the easy obvious anti-hirst narrative rather than doing any sort of meaning research on the market.

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Auction-house opacity datapoint of the day

Felix Salmon
Mar 13, 2012 19:11 UTC

Greg Allen has a fascinating report on a monochrome painting which went unsold at Christie’s last week. It had originally appeared in Christie’s auction catalogue under the authorship of “Henry Codax”, with this explanation:

Henry Codax, a pseudonym created by New York-based artist Jacob Kassay and the Swiss conceptual artist Olivier Mosset, is referenced from a fictional character in the contemporary novel Reena Spaulings published in 2005… In the present example, Kassay’s iconic silvery paintings have been replaced by a sleek, anonymous grey surface. Stripping away any obvious authorship, Kassay and Mosset’s Henry Codax joins the company of fictional and pseudonymous artists including Marcel Duchamp’s Rrose Selavy and Richard Prince’s John Dogg.

That’s an unambiguous statement of fact: “Henry Codax” is a pseudonym created by Kassay and Mosset. But Christie’s provides no sourcing for that fact, and Kassay’s gallery is on the record as saying that they know nothing of Henry Codax.

Kassay has, as Allen puts it, a “hyper-speculative Kassay auction market”: that is, if a Kassay comes up for auction, many people will be bidding on it just because they think that Kassay is a star whose works are going to rise sharply in value. So if Codax is Kassay, the Codax painting, estimated at a modest $10,000 to $15,000, could be a highly lucrative investment. (Kassay is shooting up the hot-young-artists league table, with $1.8 million of auction sales to date, at the age of 28.)

So I was a little surprised to see that the Codax had been bought in at auction: that no one was willing to spend even $10,000 for a huge, 7-foot-square piece described by Allen as “the awesomest” painting that Codax ever made. (Admittedly, there aren’t all that many of these things.) What happened? Allen got on the case:

Someone who attended the sale told me that Christie’s had read a statement, known as a saleroom note, before the sale, in which Kassay said he’d “had nothing to do with” the painting, and that his “name should not be associated with it.” [In trying to confirm the text of the actual statement, I contacted Christie's, first as press, and then finally as client. The specialist who worked on the lot was helpful, if circumspect. But she also referred me to the sale results page, which, I was told, would have the saleroom notice appended. Except, of course, it didn't, because Christie's deletes online references to unsold lots completely, in order to not taint their saleability in the future.]

An auction-house saleroom is an interesting quasi-public space: what goes on there is generally considered public knowledge, but at the same time information about auction-house results can be quite expensive to retrieve. And even the best results databases don’t make an attempt to document the statements read out at the beginning of the sale.

What’s interesting here is that Christie’s seems to be doing everything it can to bury Kassay’s statement. In the sale, Kassay said that his name should not be associated with the painting, but on Christie’s website, the only mention of the painting still says that it’s a Kassay. And Kassay’s statement itself is nowhere to be found; it’s certainly not being released by Christie’s to Allen, either as a member of the press or as a buyer.

This is just another example of the way in which the entire art market is built on information asymmetries. Christie’s knows something; that information has value, and it rises in value the fewer the number of other people who know that thing. So while Christie’s claims to be in the business of providing public and transparent pricing for art, in fact it’s in the opacity business as much as it’s in the transparency business.

What’s more, the Christie’s press release for this sale trumpeted its online aspect:

Upon the heels of the incredibly successful Elizabeth Taylor online only auction, the First Open sale featured the most LIVE registrants ever for a Christie’s contemporary sale signifying a new era in bidding and buying for this department.

If you look at the LIVE website, it explains that bidders “may enter the online saleroom up to 15 minutes before the start of the sale, or at any point during the sale.” If someone wanted to bid on the Codax using the LIVE system, it’s entirely possible that they could have missed the reading of the Kassay statement. But Christie’s, a bit like Goldman Sachs, is an intermediary always out for itself. Just like everything else in the art world, the rule at auction is always caveat emptor.


Boy, Felix, you really have a bug up your butt about the art auction business. I mean, who cares, really? Rich people want to blow their money on art, it doesn’t really matter who it’s by. Today’s wunderkind, yesterday’s, some poseur, what’s the diff? I mean, if you’re willing to drop a wad of cash on a canvas of gray paint, just so you can have the name in the corner, you kind of deserve what you get, you know?

And go on Netflix and rent The Moderns.

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The commodification of the contemporary art market

Felix Salmon
Mar 7, 2012 21:51 UTC

One of the odder reactions to my post about the commodification of Gerhard Richter came from Marion Maneker, who accused me of “serious lapses in logic and intellectual judgment”, not to mention “sloppy thinking and a poor grasp of the art market”, without ever really coming out and saying what I was meant to have got wrong. Instead, he confined himself to dropping this cryptic comment:

Valuable art is valuable because it has become a currency, not a commodity. No one suggests that gold is a “better” metal because it is accepted as currency. It simply fills that role.

This, of course, makes no sense at all. Currencies are things that you use to pay for other things; commodities are things that you buy. If art is going to be one or the other, it’s going to be a commodity, not a currency. But on Twitter, Maneker doubled down.

Anything used as a medium of exch = currency. One uses a Richter Abstrakt to “buy” all sorts of things that mere money cannot @felixsalmon
Mar 06 via Twitter for Mac Favorite Retweet Reply

Being unfamiliar with the use of art “as a medium of exchange”, I asked for an example. And Maneker responded with an extremely bizarre blog post entitled “Art as a Currency“.

In his new post, Maneker makes the rather banal point that if you buy a painting (for old-fashioned cash), then you don’t just get an object to put above the fireplace, you also get cultural cachet. Or, as he puts it, “access to an emerging social class of global capital”. So far, so good. But then we get this:

Richter has emerged as an artist whose work can be used as social currency to join that class. Because it is a widely used currency, Citibank is providing a legitimate service to its clients when it advises them on the value of that currency. In that sense, commenting on Richter’s Abstrakt paintings is no different to giving guidance on the Swiss Franc. I may buy Swiss Francs as an investment or I might be moving to Switzerland for a few years or just a few months. Each of those scenarios will require different decisions on my part but I am still informed by an report on the Swiss Franc.

But here’s the thing: as Maneker himself says, a currency is a medium of exchange. And in trade, or exchange, you have to give something up in order to get something else. If I want a ham sandwich, I have to pay $4. If I want a mid-market Richter, I have to pay $4 million. The Richter, or the sandwich, goes one way; the currency goes the other.

When Maneker is talking about “social currency”, however, there’s no exchange at all. If I use my Richter to join a class of Richter collectors, that costs me nothing. I pay for my Richter with dollars, and my new-found social fabulousness comes for free. Or, if you’d rather, I pay a couple of million dollars for the prestige associated with owning a Richter, and the painting on the wall comes free. Either way, the painting itself is not the currency — it’s not something I need to give up in order to buy something else. Quit the opposite.

Maneker does concede that commodities (like cigarettes) can be “used as currencies” (in, say, prison). But even then, you have to give up your holding of your commodity — your cigarettes — if you want to get something else in exchange. If I just want to impress my friends with the size of my Richter, however, I don’t need to give it to anybody.

The Swiss franc has intrinsic value: it is used, in Switzerland, to buy stuff. More to the point, there is a vibrant foreign-exchange market where billions of Swiss francs are traded for dollars, and vice versa, every day. The value of a Swiss franc can be pinpointed with extreme accuracy: right now, for instance, it’s $1.0911. And every Swiss franc in the world is worth exactly that much. The jargon term is that the Swiss franc is fungible. So when Maneker says that “Richter’s paintings are not fungible”, he’s actually giving a reason why they’re not a currency.

Commodities, by contrast, are different. They’re fungible — but only up to a point. Different weights of oil, different types of wheat, different grades of beef, sell for different amounts of money. And in the art world, you’ll notice that nearly all the most successful artists (financially speaking) now make art in series. Richter’s a prime example: his website even goes so far as to list them all in alphabetical order. (The “Photo Paintings” are subdivided into “Apples, Astronomy, Baader-Meinhof, Buildings, Candles, Cars, Children”, and so on, while the “Abstracts” are broken down by date, with a separate category for the Colour Charts. The Mirror paintings come under “Other”.)

Looking at art through an economic lens, where people rationally respond to incentives, this makes perfect sense: if you have works in series, they become increasingly fungible and interchangeable. That’s one reason why editioned works can be worth so much: there’s more of a market to mark them to. And it’s worth noting that Richter’s biggest series, the Abstrakt paintings, has also provided the majority of his most expensive works.

Maneker asks “whether the Abstrakt paintings are a commodity” — to answer it in the negative — shortly after starting a sentence with the phrase “If I buy an Abstrakt”. But the phrase answers the question: a world where you can talk about “buying an Abstrakt” is a world where “an Abstrakt” is something which has become commoditized. (Incidentally, I think the Abstrakt paintings are gorgeous; Maneker’s entirely wrong when he says I don’t like them. I love comfy armchairs as much as the next guy, and there’s nothing wrong with them at all.)

When I say that Richter has become a commodity, I’m not expressing “bigotry toward the very rich”, or “passing judgment” on them, as Maneker thinks — I’m just describing the way that the upper echelons of the art market work. It’s a place where artist-brands are instantly recognizable, and where the cognoscenti are largely incapable of looking at a work without mentally attaching a price tag to it. There are so many Warhols and Richters floating around the market that any Warhol or Richter can be valued pretty accurately at this point.

If a certain class of person walks into an apartment and sees a huge Richter, they’re going to know pretty much immediately how much that Richter is worth. If they see a medium-sized Old Master, by contrast, the financial value of the piece — not to mention its authorship — is much less obvious. As such, Old Masters are much less good at displaying the wealth of their owner than Warhols and Richters are. Which has to explain at least some of the reason why Warhols and Richters are so incredibly expensive.


What was worrying, was the oversimplification of how the art market works. I have many people in my life who have held work long enough to liquidate it into a house, or several other useful things other than art. But if, as you state, you just go and buy art because it’s makes you happy.. you are ignoring a long tradition of supporting qualified artists and investing in your culture base. Sunday painters, your Dad’s work in his retirement, your kids drawing, are not supporting the Canadian Art Culture. Canada could use comments that encourage investment in our artists, rather than criticize it. The country would benefit, as would our artists who just happen to be our poorest demographic. In part because of this continued ignorance about what is and isn’t good art. In fact, The Scream, is priceless.

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The commodification of Gerhard Richter

Felix Salmon
Mar 4, 2012 23:26 UTC

Jonathan Binstock is the head of Citibank’s art advisory and finance operation — the shop which was famously founded by Jeffrey Deitch. Recently, he put out a four-page research report on Gerhard Richter. According to Binstock’s report, Richter “has recently emerged powerfully as the next great market force among the tradition of 20th century painters including Pablo Picasso, Willem de Kooning and Andy Warhol”. What’s more, “it is clear that he is in the process of being catapulted to a rare and illustrious realm of authority”. And he turns out to have been a great investment, as this chart from the report purports to demonstrate:


Binstock was kind enough to agree to come in to Reuters to talk about this report, which I’m not really a fan of. For one thing, I don’t think there’s much in the way of meaningful information in Binstock’s chart, and I think it’s incredibly dangerous to make it seem as though artists are investable assets which can be compared in some way to the S&P 500. Binstock says that he’s “trying to bring a level of financial professionalism to the project”, but I’m pretty sure that most of my readers would be able to come up with two or three ways off the top of their heads in which the above chart is unprofessional.

In any case, Binstock is very much part of the way in which the art world is turning individual artists, like Gerhard Richter, into asset classes. When I asked if his phrase about Richter “being catapulted” was a classic momentum-trade analysis, Binstock replied that “yes, he’s being catapulted, and I think that’s an imprimatur that comes now from the market”. In other words, Binstock is now lumping Richter in with Picasso, de Kooning, and Warhol just because Richter paintings are selling for large and ever-increasing sums at auction.

But here’s the thing: Picasso, de Kooning, and Warhol aren’t just good artists, they’re important artists — among the most important of the 20th Century. They permanently changed the way we look at and think about art: what it is, what it can do, what it should look like. Richter’s no slouch on that front, but he’s not in their league, and never will be. What’s more, there’s a very clear distinction between Richter’s important art, on the one hand — think fuzzy black-and-white paintings interrogating Germany’s attitudes to its own history — and his expensive art, on the other. Here’s how Binstock describes the expensive art:

A particularly desirable series of abstract paintings from the late 1980s and early 1990s provides an excellent case in point. The artist made a stunning array of these in a convenient easel size of roughly 48 x 40 in (122 x 102 cm) — domestically scaled objects with overwhelming wall power. Their beautiful rubbed surfaces are among the most delectable of all Richter’s abstract conceits. A red and blue example, sold at the same Sotheby’s sale mentioned earlier, brought $6.3 million, an extraordinary price for a painting that might have been $2 million in late 2007. Indeed, another painting from the series, primarily white and especially creamy, made $1.8 million in October of that year.

Check out the adjectives: “convenient”. “Domestically scaled”. “Wall power”. “Delectable”. “Especially creamy”. This isn’t art, it’s interior design for the private-jet crowd. Binstock is talking here about what he calls “the mid-market”, which he defines as paintings in the $1 million to $5 million range. (Yes, $5 million is now officially the new middle market.) The middle market is where you find apartment-sized, instantly-recognizable paintings which look nice above the fireplace.

Picasso, de Kooning, and Warhol all faced art-world opposition to what they were doing: they were breaking rules, creating something challenging and new. It took a long time for the art world to embrace them, and to this day their work still carries a frisson of transgression. Richter’s expensive art, by contrast — the colorful squeegee paintings, or the beautiful candles — is perfectly calibrated to middlebrow taste, and has never been remotely controversial.

Remember that when we’re looking at extremely expensive art, we’re looking, pretty much by definition, at the art which is most coveted by incredibly rich men. (That’s why paintings of women have always sold for much higher sums than paintings of men.) And while your typical incredibly rich man might well have a lot of sophistication when it comes to arbitraging the capital structure of potential takeover targets, his taste in art is most likely to run very much in line with Matisse’s famous quote about how a painting should be like a comfortable armchair. Richter’s “beautiful rubbed surfaces” sell at a premium for exactly the same reason that the apartments at 15 Central Park West sell at a premium: they’re modern yet timeless, incredibly easy to live in, and utterly inoffensive.

This didn’t make it into the video, but Binstock and I talked a bit about Richter’s mirror paintings, and he told me about a blood-red piece which sold at Sotheby’s in London a couple of weeks ago for about $750,000. He loves that work; I, too, am very partial to the Richter mirror paintings, especially the room devoted to them at Dia: Beacon. But the mirror paintings are very much at the highbrow end of the Richter spectrum, which means that they barely even count as “middle market” as far as the Richter money-scale is concerned.

I therefore had to ask Binstock about the famous declaration by Tobias Meyer of Sotheby’s that “the best art is the most expensive art because the market is so smart”. Binstock said that “in some cases”, Meyer is correct, but he then reversed himself, noting that “you can buy a Velásquez for a lot less than a Richter”. How does that make any sense? “It’s a question of supply and demand,” said Binstock. There might be a much greater supply of Richters than of Velásquezes, but, he said, “there’s much more demand”.

It’s worth quantifying this for a minute. I went on to Artnet to see how many works by Velásquez had sold for more than $100,000 in the history of its database: the answer is three. There’s the portrait which sold at Bonham’s in December for $4.6 million, and then there’s one other portrait, of Saint Rufina, which has sold twice: at Christie’s in New York in 1999 for $8.9 million, and then again at Sotheby’s in London in 2007 for $17 million.

Richter, by contrast, has no fewer than 545 works in the Artnet database which have sold at auction for more than $100,000. If you want a Richter, and you have the money, it’s trivially easy to buy one: you can get one directly from any number of art dealers, or you can just wait until the next round of art auctions, where I’m sure a lot will be available for sale. Even so, there have been 15 different Richters which have sold for more than $10 million since 2007; two of them beat the $17 million Velásquez figure in 2011 alone. There are so many Richters for sale these days that the tenth-most-expensive Richter to sell at auction in 2011 still managed to bring in $5.7 million; in total 108 Richters sold at auction in 2011, at an average sale price of $1.85 million apiece.

Is it really possible that demand for Richters is so much greater than demand for Velásquezes that Richters can flood the market and still sell for more than $20 million, while Velásquezes, which come along once a decade or so, fetch only $4.6 million? That’s what the market is telling us. But I don’t think that the laws of supply and demand are particularly useful here. In many ways, the high prices we’re seeing for Richter represent a liquidity premium, and also the way in which rich people are happier dropping enormous sums of money on art if those sums have already been ratified by dozens of other transactions at similar valuations.

If you look down Wikipedia’s list of the world’s most expensive paintings, there’s certainly a fair few pieces by artists who come up for sale only rarely — Klimt, van Gogh, Titian, Pontormo. But they’re very much outnumbered by Picassos and Warhols with quasi-commodity status. And if you want to be charitable to Binstock, that’s really all he’s saying in his research note: that Richter is becoming a commodity just like Picasso and Warhol, and that the commodification of an artist is generally accompanied by a significant increase in that artist’s valuations.

I would never encourage speculating on the art market: it’s a rigged game, which you’re almost certain to lose. But if you really want to do it, here’s a tip: buy work which (a) is instantly recognizable as coming from the artist in question; (b) looks great when hung on the wall of an expensive apartment, and (c) comes from a fecund artist with a massive output. Oh, and if you can, get a painting with lots of red in it. And remember, you’re not buying great art, or art you particularly love. You’re second-guessing, buying the kind of art you hope that billionaires are going to covet in the future. It’s a pretty soul-destroying exercise, with a low probability of success. But if you’re the kind of person who marks your art collection to market, you probably don’t have much of a soul to begin with.


Once again, it’s Keynes’s line about betting on a beauty contest: Don’t bet on the woman you think is most beautiful. Bet on the woman whom the judges will think is most beautiful.

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