Judith H. Dobrzynski on Culture
This is an example where pictures are worth a thousand words. For the past two days, the website Hyperallergic has been tracking down the storm’s impact on Chelsea art galleries and artists. Have a look at one picture below; there’s more information and pictures here and here, and Bloomberg has a short story here.
Meantime, Christie’s is offering space and computer access to dealers and artists who need that.
A friend of mine noticed something new while visiting the presale exhibitions of Asian art sales at Sotheby’s last week:  Label, placed right under the traditional lot information, that said, “Clients who wish to bid on this lot are required to complete the pre-registration form and to pay a deposit of $150,000.”
Both Sotheby’s and Christie’s, it turned out, have been asking for such hefty deposits on some lots for the last few years, particularly for Asian art, where they’ve been burned by non-payers. But Sotheby’s is the one that is being so transparent about it. Sotheby’s calls them “premium lots” and here’s an example.
This might seem a little “inside baseball” for RCA readers, so I wrote a short item for the Art in America website — posted here.Â
I think this — transparency — is a good thing. While one dealer said it might deter spontaneous bidders, I can see the rationale.
The other day, USA Today caught up with the news and added two interesting tidbits, one of which shows the dynamics of some museum boards. One might explain the other, but not in a satisfactory way, to me at least. First, the reporter managed to get a price estimate for the work from Guernsey’s, the New York auction house that discovered it and will sell it: Femme Assise au Chapeau Rouge is estimated at $30- to $40 million, according to Arlan Ettinger. Some people think that’s high, however. (And so do I, from afar, but you never know.) At the time of the gift, in the late sixties, it was appraised for tax purposes at $20,000.
Second, the story quotes John Streetman, the museum director, saying: “I wanted to show it, but the president of our board came up with a list of good reasons not to.”
The article says the board debated the picture’s fate internally before announcing the discovery, but it seems that the board, led by a president named Steve Krohn, a lawyer and businessman, had their eyes on the money — the museum’s endowment totals $6 million. He told the reporter: “It would have cost too much money to insure and to adequately protect. We might have had to hire additional security and make changes to the physical plant that we couldn’t justify for one item. We made the only prudent decision.”
Call me skeptical,  but I think he’s exaggerating. I’m with the local who said,  “Something that’s been there since ’68, to right away take it to where no one’s going to see it again? I’d say keep it and put it on display a year or two, then sell it. But that’s just me.”
With money from a sale — which will be private, not at auction, Guernsey’s has said — the trustees can rest on their fund-raising laurels, which is a pretty seductive reason to sell.
Photo Credit: Courtesy of the Evansville Museum
Just in case you’re seeking indoor shelter or solitude or just relaxing on this Labor Day weekend, I have a piece, plus a sidebar, in today’s Wall Street Journal on the Islamic art market. A lot has been happening in the art world regarding Islamic art — not just the opening of the Metropolitan Museum’s newly refurbished Islamic galleries last November and other museum gambits, but in the market, too. That’s mostly in London and hasn’t received the attention it deserves.
As major collector Nasser D. Khalili, an Iranian-born businessman and philanthropist, told me:
Twenty years ago, there would be 20 magnificent pieces and four people buying. Now there will be four major, important pieces if you’re lucky and 50 people buying.
There’s more coming in the museum world and the gallery world, and you’ll hear about it. So you might familiarize yourself with the situation — here’s the link to my article and one to the sidebar. Together, they have four items that will be up for sale this fall — a bowl, a ewer, a manuscript and a child’s sword — all worth a look.
In the interest of not repeating, I’m posting here the item that holds the world auction record for any Islamic work of art: an illustrated folio from the famed Shahnameh, a 16th-century manuscript (also known as the Book of Kings) chronicling Persian history, which sold at Sotheby’s in London in April 2011 for  just under £7.4 million. That price, which includes the buyer’s premium, far exceeded the presale estimate, which was estimate: £2-3 million, not including the commission.
It came from the famed collection of Stuart Cary Welch, a scholar-curator, and drew seven bidders, who competed for almost ten minutes. The buyer remains anonymous.
Photo Credit: Courtesy of Sotheby’s
There’s a truism in the investment world which says that when an opportunity is opened to the little guy, it’s time to look for the exits. Not necessarily to cut and run, but rather to devise an exit strategy.Â
That’s what ran through my mind when I read an article in this week’s Bloomberg Business Week headlined Short Jackson Pollock! Go Long on Damien Hirst! It describes a vehicle for investing in art under development by a suburban St. Louis company called Liquid Rarity Exchange, which intends to securitize art works and thus open “the exclusive club of art speculation to the investing public.”
As the article says:
The Clayton, Mo., company says it has patented a technique for banks to take individual works or groups of works public, with the first offerings still 12 to 18 months away. Its argument is that by making paintings—as well as vintage cars, rare books, musical instruments, and other appraised goods—more liquid and subject to SEC regulation, the market will be fairer and priced more accurately. Also, museums would have a new way to raise funds by selling stakes in their collections while continuing to display the work of art.
This fund would mimic the private investment vehicles owning art that have been around for a couple of decades in various permutations, the LRE execs say.
They didn’t explain their vehicle very well in what is a very slim story. What’s weird and somewhat shocking is that while some anonymous Wall-Streeters pooh-poohed the idea, some art world players did not. Here’s collector/hedge-funder Adam Sender:
Any time you bring more liquidity to a market and it’s done properly, it’s a good thing, not a bad thing…The more liquidity you bring to a market, the more confidence you bring to it, and the more money flows in.
And here’s Jennifer Zatorski, a senior vice president at Christie’s:
This is a sign of a healthy global market.
No it isn’t. Those quotes are signs that maybe the art market is nearing the limit on new buyers (for the moment at least), but those with inventory want to make sure it hasn’t.  As Sender hints, keeping this party going requires an inflow of more money.
Photo Credit: Courtesy of the Daily Telegraph