Pinky Says: THE ART MARKET
INTO THE STRATOSPHERE
I must admit to you that my head is spinning at the prices and the quantities of dealers, art fairs, and artists that have appeared in the art markets of the world this year. While money has never been the object of this blog, it is nevertheless a vital consideration for collectors and auction houses. Let me just summarize a few of the prices that have created a perfect storm between supply and demand in the final months of 2012. Sotheby started off the action with a rollicking $375,000,000.00, the highest total the firm has ever racked up. Leading the pack of winners was Mark Rothko’s “No. 1 (Royal Red and Blue) which sold for $75.1 million which was well over its pre-sale estimate of $50 million. There was a perfect little Pollack drip painting from 1951 that set a new world record for the painter at $40.4 million. The major winners were Warhol, pop art and abstract expressionist works with painters like Kline, De Kooning and Bacon being feverishly sought. Then Christie’s raised the roof even further the next night when the firm turned in another record sale, this time soaring to $412.2 million and topping their previous high estimate . It was the firm’s highest result ever in the postwar and contemporary category. Warhol, Kline, Basquiat and Lichtenstein dominated the upper reaches of the sale with new records established for Kline ($40.4 million) and Warhol ($43.7 million).
Forgive me for this next paragraph in which I relate my own sad story. We were in an elevator going up to see works in a gallery in the mid 1970s when a runner (runners were employed to bring works of art from one dealer to another when a cash patron was on the scene and the dealer needed to sell him.) This runner was holding a Mark Rothko work on paper in yellows and creams. It was a beauty and I could not resist asking the price. It was $18,000.00 and a real steal. However I did not have any moneys near that amount and the runner left the elevator at the same time as I did. He was taking the painting to the same dealer that I was going to see. The customer was waiting and the dealer welcomed me and identified me as a knowledgeable historian. When the client asked me about the work, I was thrilled to tell him how perfect it was in both price and quality and he bought it on the spot. How I wished it could have been mine. What has happened to the art market in the ensuing 30 years? The market has expanded massively, there are far more people in the higher income brackets and the number of international buyers has increased dramatically. These new buyers are tending to favor postwar and contemporary over the modern field. Artists such as Warhol, De Kooning, and Rothko are seen as safe bets and have consistently commanded yet higher prices.
There has been some radical changes in other parts of the art market. The art fair merry-go-round spun almost out of control with two major new fairs added to the jam packed roster. Art Basel in Miami was still the king of the hill but a raft of small fairs were started up or announced in Melbourne, Istanbul, Rio de Janeiro, Lima and London. How all of these will survive is still a question. Galleries also grew by opening huge new spaces in New York, London and Paris as well as Hong Kong and London. The heaviest hitters in the art business offered international exposure to their artists and tapped into the local mega-wealthy communities. The sale of one of Munch’s “The Scream” done in pastel brought a record $120 million. The great Gagosian empire hit a bump in the road when three of the gallery’s artists defected. Jeff Koons, Damien Hirst, and Yayoi Kusama bowed out of their relationship with Gagosian. It seems as though the top artists have gotten the upper hand and are abandoning any loyalty to their dealers. Also of note the Warhol Foundation for the Visual Arts has released hundreds of Warhol’s lower value works which would ordinarily sink the market value, but this did not happen. The Foundation is divesting itself of all its Warhol art works. There were no great masterpieces in the group but this did not deter buyers . Many of the lots went at prices under $20,000.00. The sale totaled $17 million. There is plenty more to come from the same source, much of which will be sold by Christie’s on line. So much art is needed to fill these huge galleries, private museums, art fairs, and auction houses. Observers of the art market have accused artists of over production and fears as to the quality that could lead, sooner than later, to an implosion of art values.
What conclusions can we draw from this ending of 2012? We know that contemporary art rules the roost. We know that there is still continuing strength in Impressionist and modern art sales. We know that the market is a place for Chinese businessmen, Russian oligarchs, oil rich kingdoms, and hedge fund managers. We know the financiers know the value of hype and they understand that if artworks sell at exorbitant prices those works and the artists who painted them become newsworthy and then the media plays along with them. The very best that we can hope for is that these well-heeled collectors will see fit to establish museums or gift existing ones with their largesse. And we must be aware that the art market is international in scope and that it is no place for the novice collector.
OK. Enough of this money talk! Next month we’ll get back to the essence of art.