Edition

The Back Room: The Inaugural Edition(!)


__________________________________________________________________________________

The Bottom Line

The opening of Frieze New York 2021 came off as close to a best-case version of the “new normal” as could have been hoped. Yes, health checks and masks were a drag. But much of the industry showed up, timed entry made the experience uncharacteristically pleasant, and sales were brisk. The virus situation makes European fairs a question mark, but Frieze’s success bodes well for the Armory Show and Independent’s return in September.

 

[READ MORE]

__________________________________________________________________________________

The Art Detective

Breakups and Sell-Offs

Happy Divorce! (Photo by Keith Beaty/Toronto Star via Getty Images)

Happy Divorce! (Photo by Keith Beaty/Toronto Star via Getty Images)

pandemic-driven divorce boom is shaking up the world of elite wealth—and it should keep the art market jumping well into 2023.

That’s the message in Katya Kazakina’s inaugural edition of The Art Detective, her weekly column sleuthing through the market’s best-kept secrets. (Another Midnight Publishing Group News Pro perk, folks.)

Some of the names parting ways and splitting collections are familiar: Bill and Melinda French Gates, Linda and Harry Macklowe, and even Sotheby’s private sales guru David Schrader, who just finished divvying up a 20-year collection with his ex-partner.

Appraisers are the first to benefit from the acrimony. Divorce-related valuations of fine art and collectibles are up 25 percent compared to just before lockdown, according to Winston Art Group’s Elizabeth Von Habsburg. The reason? You can’t finalize a divorce settlement without agreed-upon asset valuations.

Splitting amicably saves collecting couples money, too, and not just because they avoid paying trial lawyers. Quietly sorting out who gets what means soon-to-be-exes also avoid hefty capital-gains taxes that would come from selling to outsiders.

But if a divorcing couple can’t come to terms privately, they’ll be forced to liquidate at auction, meaning auction-house fees and sales taxes, too. The dueling can even extend to the salesroom. Lawyers agree spouses often wage bidding wars against one another, sometimes strictly to inflict pain—exemplified by one husband threatening to win a piece just so he could burn it on video.

Expect 12 to 36 months of art-market action from all this, according to Schrader. Between appraisals, settlement negotiations (or trials), and a pandemic-induced bottleneck in divorce court—to say nothing of the private sales and auctions—the trade is in for a different kind of COVID-related long haul.

 

[READ MORE]

__________________________________________________________________________________

Stock in Trade

Can Masterworks Master Scale?

A promotional image for Masterworks's offering of shares in Andy Warhol's 1 Colored Marilyn (Reversal Series) (1979). Courtesy of Masterworks.

A promotional image for Masterworks’s offering of shares in Andy Warhol’s 1 Colored Marilyn (Reversal Series) (1979). Courtesy of Masterworks.

Masterworks, the investment platform securitizing fractional shares in blue-chip paintings, is on a mission to become “the largest buyer in the market” according to founder Scott Lynn. After acquiring more than $100 million in paintings in 2020 alone, and attracting more than 140,000 users to date, the company’s Silicon Valley-style growth strategy is premised on the notion its shareholders can consistently beat the niche art trade through its Wall Street models, proprietary market analytics, and economies of scale.

But art-industry veterans questioned three elements of the Masterworks sales pitch:

 

●  Fee Structure

Is it too much to charge a 10 percent fee inside the initial offering price, a 1.5 percent management fee yearly, and a 20 percent fee on the resale profit when a painting is finally dealt?

●  In-House Data Accuracy

Has contemporary art at auction really posted bigger gains and softer losses than the S&P 500, global equities, and other assets since 1995? And is an index tracking repeat sales of U.S. homes really the best model for tracking changes in individual artists’ historical results under the hammer?

With plans to spend $300+ million on art by EOY—“typically” resulting in its acquiring new work every week—can Masterworks consistently buy low and sell high on top-quality paintings for the long run? Or will this torrid pace prove incompatible with the narrow supply and irregular market conditions of blue-chip art?

“Auction houses were knocking themselves out to get good pictures. I didn’t have any clients coming to me desperate to sell. If you spent $100 million in 2020, were you getting the best opportunities?”

– Megan Fox Kelly, president of the Association of Professional Art Advisors, on Masterworks’s shutdown-era buying spree.

The Bottom Line

Masterworks acts as a Rorschach test, even for finance-savvy collectors: Do you see great paintings as an asset whose value can be standardized, quantified, and diversified invisibly into a portfolio… or a highly specific, irregular good whose value must be experienced, not just traded? If the former, read the fine print. If the latter, ignore the whole enterprise.

 

[READ MORE]

__________________________________________________________________________________

Data Dip

March 2021 Fine-Art Auction Sales Up 22 Percent Vs. March 2019

All data © Midnight Publishing Group Analytics 2021.

You read those dates right: global fine-art sales at auction this March ($1.1 billion) were more than one-fifth higher than in March 2019 ($940 million)—a full year before shutdown—according to the Midnight Publishing Group Price Database.

The biggest difference? Fifteen lots sold for $10 million or more this March, against only seven in March 2019.

Even on its own, the resurgence in trophy sales would have boded well for supply and demand at the house’s this spring. Add in the bonanza of choice pieces pushed onto the block by marital strife, and signals suggest May will be an epic bounce-back month for the auction market.

Smash the button below for more detailed analysis from Julia Halperin.

 

[READ MORE]

__________________________________________________________________________________

 

“Shortly after I arrived at [MOCA Los Angeles], Eli asked us to print out all of the museum’s financial records from the past several years. I delivered to Eli a two foot stack of accounting records. This would be his weekend reading. Eli was unique in combining this financial acumen with an enthusiasm for the latest artistic innovations.”

– Jeffrey Deitch remembering Eli Broad, whose death at age 87 was announced last weekend.

__________________________________________________________________________________

 

Express Checkout

Adam Chinn’s Incognito Sales Platform + Three More Market Morsels

Ex-Sotheby’s dealmaker Adam Chinn will launch LiveArt Market, a peer-to-peer online sales platform powered by machine learning and extreme discretion, this month. (Wall Street Journal)

Aimed at cutting out the middleman for high-end sales, features will include…

● Free automated estimates via algorithms that crawl auction data

● Control over what data remains anonymous (including a work’s current owner)

● In-house provenance researchers and conservators

● Flat 10 percent buyer’s premium (vs. up to 25 percent at major auction houses)

__________________________________________________________________________________

 

Veteran collectors (surprise!) have almost no interest in NFTs. (New York Times)

__________________________________________________________________________________

 

Zona Maco was lively thanks to a focus on local galleries and restriction-free travel from Europe and the U.S. (Midnight Publishing Group News Pro)

__________________________________________________________________________________

 

Positive outlooks for economic growth and corporate profits have led investors to greet Joe Biden’s proposed tax hikes as follows: ¯_(ツ)_/¯. (New York Times)

__________________________________________________________________________________

Artwork of the Week

Roy Lichtenstein’s Interior: Perfect Pitcher

Roy Lichtenstein, <i>Interior: Perfect Pitcher</i> (1994). Courtesy of Christie's Images Ltd. 2021.

Roy Lichtenstein, Interior: Perfect Pitcher (1994). Courtesy of Christie’s Images Ltd. 2021.

Clocking in above 10 feet by 16 feet, this vibrant example of Lichtenstein’s “Interiors” series epitomizes the value of a sterling provenance. Only the artist himself and his estate held the painting before its current unlisted owner… who sources claim is none other than Larry Gagosian. (A Gagosian spokesperson denied the claim.) What we do know is that the painting is backed by a third-party guarantee, so no matter what happens on auction night, someone will walk away with this bravura painting—and I’ll bet you that someone owns exactly zero NFTs.

FIAC’s Digital Edition Clicks With Buyers, Thanks to a Curated Approach and a ‘Chance Encounter’ Button That Emulates the Fun of IRL Fairs


There’s been no shortage of grumbling about the never-ending parade of virtual art fairs and about how “online viewing rooms” (or OVRs) are, really, just another website. Nevertheless, dealers and collectors alike appeared this week to be enthusiastically embracing the virtual edition of the high-profile French fair known as FIAC (Foire Internationale d’Art Contemporain).

The VIP preview days started on March 2 before the fair “opened” to the broader public on March 4. (It runs through Sunday, March 7.) After a full-year of lockdown, it appears both organizers and exhibitors have been stepping up their game when it comes to online presentations.

In addition to user-friendly features that allow for searching by artist, gallery, or title, viewers can sort and filter works by price and opt to see works with or without prices in order to “browse as collectors or as art lovers,” according to a statement.

A new feature, a button dubbed “chance encounter,” generates a random artwork each time it is clicked. The goal is to recreate “the sense of surprise discovery as at an in-person fair.”

Screenshot of FIAC's 'Chance Encounter' feature in action.

Screenshot of FIAC’s ‘Chance Encounter’ feature in action.

Galleries also have the option of changing up the works on view in the course of the fair, including labeling works as sold where applicable. In addition, FIAC raised the game by having five international curators each present their own selection of artworks from the participating galleries.

FIAC’s first-ever virtual edition “kick-started this year’s art fair calendar,” Hauser & Wirth president Iwan Wirth told Midnight Publishing Group News. “Collectors have moved quickly to secure exceptional works by our master artists with our first day sales so far totaling over $5 million.”

The gallery’s sales included works by Louise Bourgeois, George Condo, Mark Bradford, Charles Gaines, and Phyllida Barlow. FIAC’s special curators’ selection included a new work by Nicole Eisenman and a body print made in the 1970s by David Hammons, noted Wirth. Works sold ranged in price from $25,000 to over $2.2 million.

Charles Gaines’s Numbers and Faces: Multi-Racial/Ethnic Combinations Series 1: Face #16, Naoki Sutter-Shudo (Japanese/French/Swiss German) (2020) sold for $350,000. The top price for a work sold by the gallery was $2.2 million for Condo’s painting Two Hippies (2020).

Barlow’s mixed-media untitled: smallmodernart, 7; 2020 lockdown 7 (2020) sold for $25,000. Bourgeois’s 2009 gouache on paper Pregnant Woman went for $110,000.

Galeria Nara Roesler, which operates branches in Rio de Janeiro, Sao Paulo, and New York, opted to create a booth with just two artists, a “dialogue” between late Brazilian painter Abraham Palatnik and French artist Xavier Veilhan.

Abraham Palatnik, <i>W-533</i> (2014). Image courtesy Nara Roesler.

Abraham Palatnik, W-533 (2014). Image courtesy Nara Roesler.

“The presentation juxtaposes the work of two artists from different generations and backgrounds, with widely different practices in formal, conceptual, and technical terms,” according to a statement. Co-owner Daniel Roesler confirmed the sale of Palatnik’s W-533 by the end of the first public viewing day. The asking price was $100,000.

Galerie Thaddaeus Ropac bolstered its FIAC OVR with an IRL element by displaying some of the works highlighted in its online presentation at its Paris space.

“This year, we are contributing to the FIAC online viewing room with a selection of the highlights from our anniversary exhibition ‘30 Years in Paris,” director Sévérine Waelchli explained to Midnight Publishing Group News via email. “In order to celebrate this exceptional occasion, artists such as Anselm Kiefer, Antony Gormley, Georg Baselitz, Lee Bul, and Alex Katz have participated with new and outstanding works now presented at FIAC.”

The buzz seemed to help. Early on in the first preview day, the gallery sold a vivid Alex Katz portrait, Vivien Vertical 1 (2020), for $650,000, as well as an Antony Gormley steel figural sculpture, OPEN INCH (2018), for $557,000 (£400,000)

Alex Katz, <i>Vivien Vertical 1</i> (2020). Image courtesy the artist and Thaddaeus Ropac

Alex Katz, Vivien Vertical 1 (2020). Image courtesy the artist and Thaddaeus Ropac

By the end of the second preview day, March 3, at least ten additional sales were reported.

Frank Elbaz (of Paris and Dallas) sold: a work by Mungo Thomson to a Chinese museum for $80,000; a work by Bernard Piffaretti to an Austrian collector for $58,000 (€48,000); and a work by Kenjiro Okazaki to a Chinese foundation for $7,500.

Galerie Chantal Crousel reported selling a painting by Jean-Luc Moulène for $66,000 (€55,000), a large photo by Wolfgang Tillmans for $120,000 (€100,000), and a sculpture by David Douard for $18,000 (€15,000).

David Zwirner sold four works on paper by Luc Tuymans at prices ranging from $75,000 to $150,000.

And Xavier Hufkens reported selling out its online booth by the end of the first preview day with works ranging in price from $15,000 to $40,000.

Follow Midnight Publishing Group News on Facebook: