The Gray Market Weekly
Seven days in the evolving business of fine art. This week, a trio of stories that illustrate the appeal and absurdity of art-industry blacklists..
Every Monday Tim Schneider, Director of Research at Kayne Griffin Corcoran Gallery and the brains behind The Gray Market Blog, dissects the most important stories of the week from the art market.
The Commercial Is Social
On Friday, international high-end gallerist Thaddaeus Ropac used a small part of his keynote speech at this year's Talking Galleries symposium in Barcelona to vilify "art flippers," or buyers willing to resell their recent acquisitions for a profit within a few years of purchase. Ropac defended his use of blacklists to bar these characters –– who I dubbed COINs, or Collectors Only In Name, a few years ago –– from ever being able to acquire from him again after their first flip. According to Henri Neuendorf, Ropac then went on to urge gallerists and dealers to "forge preferential relationships with 'sophisticated' collectors, because artists 'trust us with their most valuable goods.'"
While I agree with Ropac's assessment that the rapid-resale phenomenon has accelerated to an unprecedented velocity over the past 15 years or so, I have two reactions to his urgings on primary-market ethics. First, Ropac himself now operates several top-level galleries in three different international metropolises: London, Paris, and Salzburg. If he's funding all three of those spaces strictly by selling to knowledgeable connoisseurs, I will paste my social security number into next week's newsletter. That's not a judgment. It's just the reality of where we are in 2017.
Second, let's consider what Ropac is saying from the perspective of anyone yet to be initiated into the art industry's upper echelons, especially if they're also under the age of about 35. Essentially, he's advocating that merchants should maintain the right to control what their customers do with lawfully acquired property for something close to 10 years after purchase, under threat of permanent ostracism from the industry's elite tier if alleged bad behavior arises. It's a mentality that reveals collecting high-end art for what it is, at least in one important respect: less a string of traditional transactions than the signing of a series of social contracts with aristocratic gatekeepers. I'm not necessarily saying I encourage rapid resales. But the next time you hear someone in the art market question why they're having problems turning wealthy Millennials into consistent buyers, remember that Ropac's blacklist and the old-money status quo it reinforces play a crucial role in killing the vibe. [artnet News]
Thaddaeus Ropac at Talking Galleries
Other People's Privates
British mega-collector Charles Saatchi announced on Wednesday that he will auction 100 works from his vast holdings in order to continue funding free admission at his namesake private institution, the Saatchi Gallery. The space reportedly welcomes over 1.5 million visitors annually, including about 1,000 trips by school groups. Saatchi has chosen Christie's to handle the sales, which will be spread between London and New York on dates to be determined.
Although there are some legitimate reasons to be cynical about many private museums' long-term sustainability, Saatchi's sell-off represents one clear advantage their founders hold over public nonprofit institutions. In the US, influential professional associations like the AAMD (Association of Art Museum Directors) hold that it's cultural sacrilege to deaccession even a single work to cover operational costs, let alone more than one... despite that they also judge it A-OK to divest pieces in order to bankroll new acquisitions. For one recent example, in 2014 the AAMD blacklisted the Delaware Art Museum for auctioning multiple works from its permanent collection to pay off construction debt and replenish its waning endowment. A key component of the AAMD's sanctions involved advising its other member institutions not to conduct artwork loans or collaborate on exhibitions with the Delaware until further notice––a punishment that could seriously undermine any public institution's programming and standing.
But while there are vanishingly few good economic arguments for this policy––and some very strong ones for heaving it overboard––private institutions are generally beyond the long arm of museum-group law. True, some do request artwork loans or other assistance from public collections. But the majority simply exhibit the works owned by their founders, leaving them free to deaccession as they see fit, for any purpose, without fear of reprisals from their professional peers. That may not make private museums better places to appreciate art than public ones. But in at least one important respect, it does empower them to run as better businesses. [Evening Standard]
Saatchi Gallery London
The Wool of Wall Street
Finally this week, Sotheby's continued its transformation from an auction house into "an art business" (to quote chairman Amy Cappellazzo) by naming private collector and too-big-to-fail banking lifer David Schrader its new head of contemporary-art private sales. The move is most notable for Schrader's complete and utter lack of professional experience in the art industry––a void that left Sotheby's copywriters no choice but to resort to defining Schrader with vagaries like "seasoned market player" in Cappellazzo's statement on his hire. But hey, his "intelligence" is "particularly deep" on branded must-haves like Yayoi Kusama, Mark Grotjahn, Rudolf Stingel, and Christopher Wool, so what else do you need?
Easy as it is to take potshots at this hire, though, I don't think Schrader is as ill-equipped for the job as many traditionalists would like to believe. What the phrase "seasoned market player" means in practice is that Schrader, who famously resold a Richard Prince "Nurse" painting for a 70X return within five years of acquiring it, has extensive experience among the allegedly blacklist-worthy COINs that the high-end art market increasingly depends on for profitability. Why does Schrader have this extensive experience? Precisely because he either is a COIN himself, or because, at the very least, he's acted like one in the past (and has undoubtedly networked with many more since he began collecting in the '90s).
Considering both the increasing financialization of the art industry and the steady blurring of boundaries between formerly distinct roles within it, there's an argument that a Wall Street vet who's been trading market darlings for 20+ years might actually be a savvy choice to lead contemporary private sales for a major auction house, art business in the 21st century. More to the point, he might be a savvy choice not DESPITE his overfamiliarity with the same blue-chip artists and brand-conscious buyers as every art adviser worth her Louboutins, but BECAUSE of it. Either way, though, the fact that we're even having this conversation proves once and for all––as if any more evidence was necessary––that the old rules are ashes. Welcome to the new art world order. [Bloomberg]
That’s all for this edition. Til next time, don't be afraid of the dark. It's all around us anyway.