Big Bucks: The Explosion of the Art Market in the 21st Century
3/5
()
About this ebook
Read more from Georgina Adam
Dark Side of the Boom: The Excesses Of The Art Market In The 21st Century Rating: 5 out of 5 stars5/5The Rise and Rise of the Private Art Museum Rating: 0 out of 5 stars0 ratings
Related to Big Bucks
Related ebooks
Art Collecting Today: Market Insights for Everyone Passionate about Art Rating: 1 out of 5 stars1/5Art Business Today: 20 Key Topics Rating: 3 out of 5 stars3/5Art as an Investment?: A Survey of Comparative Assets Rating: 3 out of 5 stars3/5Art of the Deal: Contemporary Art in a Global Financial Market Rating: 0 out of 5 stars0 ratingsSelling Contemporary Art: How to Navigate the Evolving Market Rating: 1 out of 5 stars1/5The Contemporaries: Travels in the 21st-Century Art World Rating: 0 out of 5 stars0 ratingsThe $12 Million Stuffed Shark: The Curious Economics of Contemporary Art Rating: 4 out of 5 stars4/5The Global Work of Art: World's Fairs, Biennials, and the Aesthetics of Experience Rating: 0 out of 5 stars0 ratingsNew Art, New Markets Rating: 0 out of 5 stars0 ratingsThe Supermodel and the Brillo Box: Back Stories and Peculiar Economics from the World of Contemporary Art Rating: 5 out of 5 stars5/5Curating Art Now Rating: 0 out of 5 stars0 ratingsVisual Arts and the Law: A Handbook for Professionals Rating: 0 out of 5 stars0 ratingsThe Art Collector's Handbook: A Guide to Collection Management and Care Rating: 0 out of 5 stars0 ratingsCollecting and Care of Fine Art: An Introduction to Purchasing, Investing, Evaluating, Restoring, and More Rating: 0 out of 5 stars0 ratingsOn Curating: Interviews with Ten International Curators: By Carolee Thea Rating: 4 out of 5 stars4/5Selling Art without Galleries: Toward Making a Living from Your Art Rating: 2 out of 5 stars2/5A Brief History of Curating: By Hans Ulrich Obrist Rating: 5 out of 5 stars5/5The Artist as Curator Rating: 0 out of 5 stars0 ratingsCrime and the Art Market Rating: 0 out of 5 stars0 ratingsThe Art Fair Story: A Rollercoaster Ride Rating: 5 out of 5 stars5/5Art Unlimited?: Dynamics and Paradoxes of a Globalizing Art World Rating: 0 out of 5 stars0 ratingsArt in the Age of Mass Media Rating: 1 out of 5 stars1/5The Business of Being an Artist: Sixth Edition Rating: 0 out of 5 stars0 ratingsArt amp;amp;amp;amp;amp;amp;amp;amp; Outrage: Provocation, Controversy and the Visual Arts Rating: 3 out of 5 stars3/5Art after Money, Money after Art: Creative Strategies Against Financialization Rating: 0 out of 5 stars0 ratingsThe Business of Art: 30th Anniversary Edition Rating: 0 out of 5 stars0 ratingsArt in the After-Culture: Capitalist Crisis and Cultural Strategy Rating: 0 out of 5 stars0 ratingsBiennials: The Exhibitions We Love to Hate Rating: 0 out of 5 stars0 ratingsCorporate Art Collections: A Handbook to Corporate Buying Rating: 0 out of 5 stars0 ratings101 Top Secret Techniques Used by Successful Part Time Weekend Art Dealers Rating: 0 out of 5 stars0 ratings
Art For You
The Shape of Ideas: An Illustrated Exploration of Creativity Rating: 4 out of 5 stars4/5All the Beauty in the World: The Metropolitan Museum of Art and Me Rating: 4 out of 5 stars4/5Art & Fear: Observations on the Perils (and Rewards) of Artmaking Rating: 4 out of 5 stars4/5The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life Rating: 4 out of 5 stars4/5Everything Is F*cked: A Book About Hope Rating: 4 out of 5 stars4/5Flow: The Psychology of Optimal Experience Rating: 4 out of 5 stars4/5Find Your Artistic Voice: The Essential Guide to Working Your Creative Magic Rating: 4 out of 5 stars4/5The Creative Habit: Learn It and Use It for Life Rating: 4 out of 5 stars4/5Creative, Inc.: The Ultimate Guide to Running a Successful Freelance Business Rating: 4 out of 5 stars4/5Vanderbilt: The Rise and Fall of an American Dynasty Rating: 4 out of 5 stars4/5And The Mountains Echoed Rating: 2 out of 5 stars2/5The Egyptian Book of the Dead: The Complete Papyrus of Ani Rating: 5 out of 5 stars5/5Make Your Art No Matter What: Moving Beyond Creative Hurdles Rating: 4 out of 5 stars4/5Art 101: From Vincent van Gogh to Andy Warhol, Key People, Ideas, and Moments in the History of Art Rating: 4 out of 5 stars4/5Draw Like an Artist: 100 Flowers and Plants Rating: 4 out of 5 stars4/5Botanical Drawing: A Step-By-Step Guide to Drawing Flowers, Vegetables, Fruit and Other Plant Life Rating: 5 out of 5 stars5/5Bibliophile: An Illustrated Miscellany Rating: 4 out of 5 stars4/5Morpho: Anatomy for Artists Rating: 5 out of 5 stars5/5How to Draw and Paint Anatomy, All New 2nd Edition: Creating Lifelike Humans and Realistic Animals Rating: 4 out of 5 stars4/5Art Models 10: Photos for Figure Drawing, Painting, and Sculpting Rating: 3 out of 5 stars3/5Super Graphic: A Visual Guide to the Comic Book Universe Rating: 4 out of 5 stars4/5The Designer's Guide to Color Combinations Rating: 4 out of 5 stars4/5The Designer's Dictionary of Color Rating: 5 out of 5 stars5/5The Electric State Rating: 4 out of 5 stars4/5The World Needs Your Art: Casual Magic to Unlock Your Creativity Rating: 0 out of 5 stars0 ratingsAnatomy for Fantasy Artists: An Essential Guide to Creating Action Figures & Fantastical Forms Rating: 4 out of 5 stars4/5
Related categories
Reviews for Big Bucks
2 ratings1 review
- Rating: 5 out of 5 stars5/5Raw, efficient and more importantly a key book to understand the way art market is growing so unsustainebly. Through such crude and strong depictions of real life events to the crucial conclusions that drives this amazing book, this read leaves you on the emotional side and is quite a huge reality-check, so if you are prone to feel depressed very quickly maybe not the best option but if you want to dive deep in this vicious market's reality is by far one of the best books about it!
Book preview
Big Bucks - Georgina Adam
BIG BUCKS
BIG BUCKS
The Explosion of the Art Market in the Twenty-First Century
Georgina Adam
LUND HUMPHRIES
First published in 2014 by
Lund Humphries
Wey Court East, Union Road, Farnham
Surrey GU9 7PT
UK
and
Suite 3–1,
110 Cherry Street
Burlington VY 05401–3818
US
www.lundhumphries.com
Lund Humphries is part of Ashgate Publishing
© Georgina Adam 2014
ISBN Paperback: 978-1-84822-138-3
ISBN eBook (PDF): 978-1-84822-159-8
ISBN eBook (ePUB): 978-1-84822-158-1
A Cataloguing-in-Publication record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data: 2014001071
Adam, Georgina.
Big bucks : the explosion of the art market in the 21st century / by Georgina Adam.
pages cm
Includes bibliographical references and index.
ISBN 978-1-84822-138-3 (pbk. : alk. paper) 1. Art--Economic aspects--History-- 21st century. 2. Art--Marketing--History--21st century. I. Title.
N8600.A33 2014
381’.457--dc23
2014001071
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electrical, mechanical or otherwise, without first seeking the permission of the copyright owners and publishers. Every effort has been made to seek permission to reproduce the images in this book. Any omissions are entirely unintentional, and details should be addressed to the publishers.
Georgina Adam has asserted her right under the Copyright, Designs and Patents Act, 1988 to be identified as the Author of this Work.
Designed by Crow Books
Printed and bound in Italy by L.E.G.O. S.p.A., Lavis (TN)
For my husband, Christopher
CONTENTS
Introduction
Prologue: Gagosian Throws a Party
PART I: THE PLAYERS
1 Auction Houses
From Dusty Booksellers to The Art People
2 Dealers
The Emergence of the Mega-gallery
3 Artists
From Starving in Garrets to Founding Their Own Museums
4 The New Taste-makers
Collectors, Curators and Advisors
PART II: A CHANGING MARKET
5 Art Fairs
An Event-driven Lifestyle
6 Clicks v. Bricks
Selling Art Online
7 Emerging Economies
New Worlds, New Money
8 The Dark Side of the Moon
An Unregulated and Opaque Market
Epilogue
Notes
Bibliography
Index
INTRODUCTION
Soon after I had started writing this book, a senior figure in an auction house said to me: ‘What I really want to know is how a 1960s Warhol, such as a Liz, can go from selling for $2 million in 1999 to $24 million in 2007 – in just eight years!’¹
Since then, Silver Car Crash (Double Disaster), 1963, one of Andy Warhol’s highly sought-after Disaster series, has set a new world record for the artist, making a stunning $105.4 million at Christie’s New York in November 2013. It was just one of a number of new price highs set in 2012–13 that demonstrate just how decisively the market for modern and contemporary art, at the top end, shrugged off the effects of the 2008–9 financial crisis and powered back to reach heights that eclipse even the 2007 season, the peak of the previous art market boom. Indeed, 2013 stood out in art-market history as its highest grossing, ever, for sales of fine art at auction.
This book is an attempt to answer that question: to show how the whole art trade has profoundly changed in this century and how it is still evolving.
The total value of the art market, including all categories, was estimated at $65.7 billion in 2013, a figure which comprises both dealer and auction sales; it has grown by 154 per cent since 2003.² For fine art at auction – paintings, sculpture, photography and drawings – the total was $12.05 billion in 2013.³ Unlike in other industries, exact figures are impossible to obtain. Dealer sales are not public, nor are the increasing number of sales over the internet. Auction figures, while often considered transparent, can be skewed by financial instruments and ‘buy-ins’ – works that do not sell. And the auction price may not be the final value if a work is bought by a dealer and marked up. Many indices to track the performance of art have been created, alongside the growing interest in art as an asset class. None are perfect, and a recent study has found that they may be over-optimistic in their calculation of the returns on investing in art.⁴ A recent book, Art as an Investment? A Survey of Comparative Assets by Melanie Gerlis, concludes that art is a very fragile asset from an investment point of view.⁵
The ascendency of contemporary art, which now completely dominates the market, is the most notable of these changes. Between 2004 and 2012 this market grew by 564 per cent in value – far eclipsing the previous traditional heavyweight category of Impressionist and modern art.⁶ This is partly due to the lack of supply – there is a diminishing inventory in all other sectors – but is also due to the changing profile of collectors; an overlap between the worlds of art, fashion, luxury and celebrity; the impact of emerging economies; and the sharply increased interest in art as an investment. It also reflects changes in the wider world, notably the nature and polarisation of wealth, and the impact of globalisation and the internet.
Contributing substantially to growing this market have been the new players. Foremost are art fairs, which have burgeoned across the world to an extraordinary degree. The internet has zipped information on art, artists, exhibitions and events around the world, provides a new selling platform for art and reaches a far younger demographic than the ‘old’ market ever could.
‘Superstar’ curators and art advisors have played a major role in determining artists’ credibility and their validation in both the not-for-profit and for-profit fields, and indeed the permeability between the two – as curators move from the public to private sectors – is increasing. Public museums, once standing aloof from ‘the market’, are increasingly involved with this new world. Even the most traditional ones now show contemporary art or commission artists’ interventions so as to be inclusive and remain relevant to their time.
The fashion for private museums, the billionaire’s ‘must have’ in the twenty-first century, has triggered and accelerated demand for high-impact works by ‘brand-name’ artists. Apart from those in China, where some also feature traditional art, these private spaces overwhelmingly exhibit contemporary art – further boosting the fame and fortunes of living artists.
The art market is a large mansion with many rooms, and contemporary art is just one of them – and even within that room there are enormous variations. The present ‘winner takes all’ scenario concerns just a small number of living and recently dead artists, whose work is chased by a growing pool of ultra-wealthy buyers, anxious to acquire the trophy works that will give them incontestable bragging rights. And the higher the price the better in this billionaires’ playground. In many cases we are not even talking about ‘art’ anymore. The production, indeed overproduction, of some living artists puts their work squarely into the category of luxury goods. Some of these changes in the art market have an echo in the fashion industry, which moved from a personal, artisan-led trade in the 1970s to the corporate, branded behemoth companies we see today.
This is the world I look at in the following pages. It is only a partial view of the art market, the one that is most visible and in the news this century. Indeed, the picture of a totally booming market for modern and contemporary art should be nuanced – the strong top end disguises a weaker situation further down the scale, particularly among mid-market galleries, who are classically squeezed between the big operations and the smaller, lighter emerging dealers. This scenario is still being played out, with the mid-market galleries the most under threat. I shall come back to this in Chapter 2.
I have been helped by so many people when writing this book that it would be impossible to name them all. Some are quoted by name, many others did not want to be identified. I extend my heartfelt thanks to them all. I would particularly like to thank my colleagues at The Art Newspaper for their unfailing support and unquenchable good humour over many years. My thanks also go to my commissioning editor Lucy Myers of Lund Humphries for excellent suggestions as to structure, and to Howard Watson for his eagle-eyed copy-editing. Any mistakes are, of course, entirely my own.
Finally, thanks to my husband Christopher, for his constant belief in me, and to my children Sacha, Olivier, Benjamin and their wives for sharing me with the art market.
NOTES
Currencies. When a price conversion is necessary for comparative purposes, the historic converter tool at oanda.com has been used unless a conversion at the time of sale was already provided by the saleroom or dealer.
Auction prices. Auction houses publish pre-sale estimates, both for individual works of art and for the final results of the sale, without taking into account the buyers’ premium. This varies from 12.5 per cent to 25 per cent depending on the hammer price, and depending on the auction house. (As of December 2013, Christie’s and Sotheby’s charged 25 per cent on works up to $100,000, 20 per cent on works between $100,001 and $2 million, and 12.5 per cent thereafter.) These fees must be added to the final hammer price. In this book, prices with premium are given unless otherwise indicated.
PROLOGUE
GAGOSIAN THROWS A PARTY
‘It smelt and tasted of money, but cold money.’
Guest at Gagosian’s opening in Le Bourget airport
Wednesday 17 October 2012: The invitation was one of the most hotly sought-after in the autumn season. The thick card, with what looked like a field of golden wheat on the front, fell through Parisian letter-boxes with a thud a few weeks before. Inside, a rather mysterious X-shape invited the recipient to the opening of a show by the German artist Anselm Kiefer, as well as the dinner afterwards.
The party was being held to celebrate the launch of Gagosian’s newest space in Le Bourget, at the time the twelfth outpost of the mega-dealer’s art empire, which spans the world from Beverly Hills to Hong Kong. Larry Gagosian, the acknowledged master-dealer of his age, who had started his career 30 years earlier selling posters in a Los Angeles car park, was opening a second space in Paris and, to cap it all, right in a private airport. As someone commented at the party: ‘Before, billionaires could jet into a city to visit an art gallery – but they still needed a limo to get there. By putting his new space in an airport, Larry has eliminated the need for the limo!’
The 250-odd guests in Le Bourget that night were offered another form of transport – a train. While Gagosian’s white-cube space, in a former 1950s hangar, was capacious, with 1,650 square metres, it was too small for the number of guests. In any case it was filled with an installation of a caged-in, golden wheat field, along with paintings of flower-strewn meadows in the adjoining galleries, some so freshly painted that you could smell the oil. So after the vernissage of the show that evening, guests were rattled in a small shuttle 300 metres down the road to another, far bigger hangar, hired for the occasion. Here the interior was mostly plunged into darkness, but the aviation theme was strong: blue lights around the walls and red spotlights on the tables, which were laid out in the form of a cross, lit with lines of LED lights like a landing strip. This, then, as guests realised, was the ‘X’ in the invitation.
But what really made them gasp were three full-size private jets, looming out of the darkness, parked between the arms of the cross. To one side, a flashing black-and-white checkerboard dancefloor pulsated to the music of a DJ.
Among the international smorgasbord of guests were artists – Californian Ed Ruscha in open shirt and bootlace tie, Anselm Kiefer in sober white shirt and French Marcel Duchamp prize-winner Tatiana Trouvé in patterned black-and-white; architect Jean Nouvel, responsible for the elegant refit of the gallery; collectors, including the Irish hotel mogul Paddy McKillan, Greek financier Dimitri Mavrommatis, and French photographer and philanthropist Jean Pigozzi in a colourful shirt; decorator Peter Marino; members of the Picasso family; Swiss/Spanish film star Vincent Pérez; and museum curators, among them Suzanne Pagé, who now buys art for Bernard Arnault, the luxury-goods mogul who owns Dior, Dom Pérignon, Louis Vuitton and much else besides.
Then there was a smattering of European princely scions and art dealers, including Jay Jopling of White Cube, with his girlfriend, the Asian-American actor Hikari Yokoyama, and Thaddaeus Ropac, a big-league art dealer fresh from opening his own new mega-space – bigger than Gagosian’s – in Pantin, just outside Paris.
Ropac had inaugurated his space with a show by Kiefer, long planned, before Gagosian suddenly announced that he too would open his new space with Kiefer. ‘I’m speechless!’ said a stunned Ropac when he heard the news.⁷ But the art market is a ruthless jungle: the only concession was moving his opening to follow that of Ropac. Badly placed on a table near the exit, Ropac quickly left the party.
Permanently tanned, Gagosian has been compared to a lion, or more unkindly, to a shark. The leonine comparison is the most apt: with his full head of crisp grey hair, snub nose and strong jaw, along with his don’t-mess-with-me demeanour, at the time Gagosian was the undisputed leader of the pack, the dealer who revolutionised the way contemporary art was sold. He turned his galleries, and many of the artists he represents, into ‘brands’ recognised across the world. He was the first art dealer ever to create a worldwide network of art galleries, which he uses to run a global art enterprise that represents 77 artists and handles dozens more; his empire was reported, in 2012, to generate revenues of almost $1 billion a year.⁸
Gagosian appears to be single-mindedly focused on his business: he has no children and no apparent succession plan. He does have girlfriends, the present being Chrissie Erpf. She was at his side at the Le Bourget party, seated at one end of the giant ‘X’ table with the more important guests. As the evening wore on some guests took the dance floor, in a desultory fashion: many were concerned more about getting back to Paris. The whole evening was, says one guest, ‘A demonstration of luxury, power and money. The evening was glamorous, impressive, but somehow grim: it smelt and tasted of money, but cold money.’
Gagosian’s party encapsulated much of the scope of this book, bringing together most of the players and the themes we shall meet in the coming pages: the glamour, the exclusivity, the spending and the global nature of the market today.
The art market has always had glamorous parties, but nothing on the scale or ambition of that evening. The market has had its prolific artists, but historically none were able to produce so much, so fast, thanks to armies of assistants and a globalised world. It had seen a few international dealerships such as Wildenstein or Marlborough, but nothing on the global scale of Gagosian. It had seen a ‘branded’ gallery in Duveen, but nothing with the scope, size and influence of today’s mega-dealers. It had seen a handful of massively wealthy collectors, such as Henry Huntington or Tsar Nicholas II of Russia, but nothing comparable to the pool of 2,170 billionaires across the globe, worth an aggregate total of $6.5 trillion, reported in 2013.⁹
Contemporary art has seen other peaks, for example in late nineteenth-century Europe, but had never seen the art of today become so fashionable, desirable and sought-after on a global scale. Perhaps most importantly, it had never seen museum building – mainly due to private initiative – taking place simultaneously in so many countries, with all vying for the latest, largest and most striking contemporary artworks. And it had never seen the hordes of intermediaries, advisors, agents, bankers, socialites, art fund managers and independent curators who had appeared, riding on the coat tails of the boom.
In the following chapters we shall look at all these different players: how contemporary art has become the overwhelming force in the market; how dealers and auctioneers went global; and why art prices have rocketed so high that one player quite seriously believes that he will see a $1 billion artwork in his lifetime.
PART I
THE PLAYERS
Chapter 1
AUCTION HOUSES
From Dusty Booksellers to The Art People
‘I am convinced I will see a work of art sell for $1 billion in my lifetime.’
Francis Outred, head of contemporary art, Christie’s ¹⁰
12 November 2013: It was a freezing evening in New York as sleek black limousines with tinted windows disgorged their passengers in front of Christie’s Rockefeller Center saleroom in New York. As the visitors hurried into the building, passers-by were photographing the reflecting orange flanks of the ten-foot high, polished steel Balloon Dog, 1994–2000, by Jeff Koons, positioned outside. The slick, shiny sculpture was one of a handful of big-ticket items going on sale in that evening’s post-war and contemporary art evening sale, all expected to shatter existing records: a Bacon triptych was, indeed, widely tipped to set a new world record for any work of art sold at auction. So the excitement was intense as potential bidders, top dealers, collectors and moneyed prospects pressed through the glass doors to pick up their bidding paddles and place tickets. Those deemed not quite as important were directed to a side room, linked by video to the main saleroom up a double staircase on the first floor.
Christie’s had heavily hyped the sale with an extravagant marketing campaign focused particularly on the Koons, rebranding its catalogues in orange and placing inserts even in its Dubai sales material. The piece, claimed the firm