How to preserve the art market
New York’s recent and forthcoming sales show that supply is the key to success, and that means guarantees, says Colin Gleadell
‘Although the art world detests Trump’s antiliberalism, his proposed tax cuts find favour with wealthy buyers’
T he modern and contemporary art market is under the spotlight as it reaches full throttle this month. A week of art fairs has just closed in New York. Reported sales were good, but not exceptional. At The European Fine Art Fair, TEFAF’S first outing in New York, focusing on Modern art rather than Old Masters, there was a rush of sales on the first day – some of which were made even before the event opened. Among the top prices was a posthumous, 2003 polished bronze casting of Constantin Brancusi’s baby’s head, Le Nouveau-né, which was sold by Paul Kasmin for around $4 million.
At Frieze, which opened the next day, the emphasis was less on the new than the usual, appealing to a more conservative audience. One of the top sales was £1.2 million for a 1990 concave wall sculpture by Anish Kapoor. Europeans were less in evidence than hoped, said dealers, probably because European art fairs in Brussels, Cologne and Berlin had just closed and the all-important Venice Biennale opens this week.
But before the Americans shot off to Europe for the Venice openings and the Documenta exhibition in Germany and Greece, they had a chance to catch the first viewing days of New York’s major Impressionist, Modern and Contemporary art sales next week.
On offer is an estimated $1.3 billion (£1 billion) of art. That sounds like a lot, but it is half the amount realised at the equivalent New York sales in 2015. But at least the estimate suggests the market is going at a consistent rate. The equivalent sales last May made $1.1 billion, and $1.3 billion in November. The instability associated with Trump’s election has made no impact; if anything, although the art world detests his anti-liberalism and threats to public arts funding, his proposed income tax reductions find favour with wealthy art buyers.
Put the sales under the microscope, and it becomes clear that supply continues to favour post-war and contemporary art, and that is where Christie’s has exerted maximum effort to hold off rival Sotheby’s, which had clawed its way back into contention after several years lagging behind.
Addressing the first point, the earlier Impressionist and Modern art sales at Sotheby’s and Christie’s are reckoned to bring at least $452 million against the contemporary sales which, including Phillips, should surpass $835 million. Nine works from the earlier category are in the $10 million-plus range, led by a $35million angst-ridden portrait by Picasso at Christie’s of his lover Dora Maar. Last time out, in 2011, this painting trebled estimates to sell for £18 million. So will the buyer make a gain?
In the contemporary sales, by way of comparison, there are 17 works estimated at $10 million-plus. Leading the pack is an almost 6ft portrait by Jean-michel Basquiat which has been guaranteed by Sotheby’s with a record-busting $60 million estimate. The painting was bought by American property developers Emily and Jerry Spiegel in 1984 for about $20,000, and is being sold by their descendants. At Christie’s, another branch of the Spiegel family is selling more than $100 million of art, while French actor Francis Lombrail is selling a small Francis Bacon triptych for $50 million in order to buy a theatre.
Among the higher-estimated lots is a 1962 painting of a Campbell’s soup can by Andy Warhol with a $25 million estimate. Coming from the Cingillioglu family of Turkish bankers, who bought it in 2010 at $23 million, it has been guaranteed by Christie’s to sell, as have half the lots in the $370 million showcase evening auction. Based on the lower pre-sale estimates, the accumulative value of the guarantees made either directly by Christie’s or by a third party is $270 million, or 62 per cent of the value of the sale. In spite of the Basquiat, Sotheby’s is trailing with just $115 million of art guaranteed, or 54 per cent of its estimated £212 million sale.
Guarantees, which are made to persuade owners to sell, are clearly a key to market dominance. Just look at the lower-value Impressionist and Modern art sales, where the guarantee percentage-to-value ratios sink to 28 per cent at Sotheby’s and 34.5 per cent at Christie’s. Without them, one shudders to think how thin these sales would be.