Purchase Plan
The two mega auction houses worldwide, Sotheby's and Christies, have undergone mega changes during the recent past. On July 1st the Bass brothers, Perry and Sid, sold their entire holdings of Class A shares in Sotheby's to money manager Ronald S. Baron. In 1992 the Bass group bought shares when they were trading below $13, acquiring more since, bringing the total up to nearly 5 million shares which Baron bought at prices ranging from $22 to $23 each. Baron now controls well over 40% of Sotheby's Class A stock and 77% of Class B shares.
Speculation about Baron's motives for the purchase were to some degree caused by the earlier takeover of Christie's by French multibillionaire Francois Pinault for $1.19-billion. After Pinault had bought 29% of Christie's shares from Joseph Lewis, a British businessman living in the Bahamas, he quickly made his move to acquire the company. The successful bid was made through Artemis, the holding company Pinault created in 1992. Pinault apparently is planning to privatize the auction house.
Sotheby's has been more profitable than Christie's despite Christie's highly successful auction sales during the recent past. The cause may be financial services offered by Sotheby's and in which Christie's lags behind. With the acquisition of the house by Pinault, a leading figure in private banking, we may see Christie's moving into the area of financial services and rivaling its rival in yet another area of expertise.
Gallery Comings and Goings
One of the most immediate results of the new Sotheby's is streamlining. While it increases the size of its central salesrooms at 72nd and York, in Manhattan, it is downsizing satellite locations. At the end of October the Andre Emmerich Gallery at 41 East 57th Street, following the conclusion of its current evhibition. Emmerich founded his gallery in 1954 and sold it to Sotheby's in 1996. Emmerich, a senior vice-president at Sotheby's, will handle estate sales for the auction house.
After famed British artist Francis Bacon died and left his estate to his long-time companion and model John Edwards, the artist's estate was lost to Marlborough Fine Art, which had successfully represented Bacon since 1958. The unspecified number of artworks left by the artist , valued confusingly by various sources at prices ranging from about $15-million to $150-million, is being handled by Tony Sfrazi, a well-known Soho dealer who had his own 15 minutes of fame when several years ago he flung a pot of paint at Picasso's Guernica , then on exhibition at the Museum of Modern Art in Manhattan.
Prices for Bacon paintings may be high - up to $8-million for triptychs and $1-3 million for figural works - but his buy-in rate at auction is also high, and interest in his art by American collectors has been limited. As with de Kooning's estate, there may not be much left of the more desirable works. Bacon, who died in 1992, was said to have left behind a large quantity of unfinished works.
Best known for her thought-provoking sayings displayed on banners and electronic screens, Jenny Holzer has left her long-time dealer Barbara Gladstone and is currently representing herself. The split occurred simultaneously with a lawsuit by Holzer against Gladstone that ended in settlement. Holzer said Gladstone had disregarded fiduciary obligations and demanded millions in damages; Gladstone countered that Holzer owed her a six-figure sum in fabrication costs. In the end it was the artist who apparently had to pay the dealer.
After eight years, Christie's head of contemporary art in New York, Neil Meltzer, has resigned to become a private dealer.
PRICE/VALUE/WORTH
Price is what one pays for an object, value is what one gets for paying the price. Worth cannot be determined until the one paying the price and receiving the value has been dead for 200 years. (ELE, 1998)
Jasper Johns
In 1997 at the Christie's New York sale of the Ganz collection, White Numbers, 1959 Johns, 53 ? x 40 1/8 inches, sold for $7.9-million. Now Sotheby's has announced that another White Numbers, from 1958, only 28 x 22 inches, will be offered from the Mildred and Herbert Lee collection in November for $7-9 million. This should test the market, not just for Johns, but for the stability of contemporary "Old Masters" in what some see as a bear market at the Stock Exchange. Think back to the very late 80s when Johns' Colored Alphabet. A 12 x 10 ½ inch oil, encaustic and paper collage, sold at Sotheby's for $3.2-million, making it at $142,222 per square inch perhaps the most expensive contemporary painting ever sold at auction. If White Numbers even reaches the low estimate it still can't t beat that price.
While many see the currently healthy art market heading toward the debacle that occurred when prices roared uncontrollably upwards in the late 1980s and then suddenly deflated in mid-1990, the purchase pattern diverges from that of eight or nine years ago. The very best art still rotates at the very best prices, but the middle market and that of the lesser artworks remains relatively becalmed. The "bad" buying of the late 80s, i.e., the careless flinging of large sums of money at mediocre and just plain awful pictures by big name artists (Yes, Virginia, very good artists do sometimes produce abysmally poor pictures.) A costly lesson, perhaps, but a lesson apparently well-learned. Humiliation is a powerful motive for improvement.
Monet/Renoir
At Sotheby's Impressionist and Modern Art sale in New York in May Monet's Le Grand Canal, estimated at $8-10 million, sold for an impressive $12-million plus. But at Christie's related evening sale Renoir's circa 1878 Jeune Fille au Bouquet de Tulipes, estimated at circa $15-million, came to a halt when bidding stopped at $11. 5-million. While that figure might have impressed the Renoir owner under other circumstances, the 1997 sale of a Renoir nude at nearly $12.5 could have raised expectations unrealistically for the second offering of another woman - this one fully dressed. While clothes may make the man apparently they don't do as much for Renoir's women.
At Christie's newly reorganized sales of Impressionist and 19th Century Art, Monet's 1972 La Promenade kd'Argenteuil sold for considerably over $5-million. On June 30th in London at Christie's another Monet, Bassin aux Nympheas et Sentier au Bord de l'Eau from 1900 drove two telephone bidders frantic, finally coming to a halt when a record $33-million was achieved. No doubt Monet (or at least his fans) could rightfully claim a place on the cover of Time as Artist of Year for 1998.
Warhol
Competitive telephone bidding also lit up the salesrooms at Sotheby's when the star attraction, Warhol's Orange Marilyn advanced to $17,327,500, selling (it ultimately turned out), to magazine tycoon S.I. Newhouse, and setting a new record that went well beyond the $4.07-million paid in 1989 for Warhol's Shot Red Marilyn. This 40x40 inch Warhol rarity might well be considered the most expensive work by a post World War-II ever sold at auction since the 1989 sale of de Kooning Interchange for $$20.68 was actually a non-sale. The Japanese buyer it turned out didn't have the funds to pay for the painting and had to offer Sotheby's other paintings he owned to pay off his debt.
Hassam
American paintings and the New York Stock Exchange were at their all-time high recently when a 1917 depiction of a celebration in the city, Flags, Afternoon on the Avenue, 1917, sold for just under $8-million at Sotheby's, while a painting done by the artist while in France sold for $3-million. The Western Art collection of Texan John F. Eulich brought a record $25-million for a single owner sale in that category at Sotheby's on the same day.
Timepiece
At the debut auction of Antiquorum in new York a 1960s yellow gold Patek Philippe watch, estimated at $600,000 - $700,000, sold for $1.1-million. Only one of three in the world, the timepiece had been purchased in 1981 for $9,000.
Unpleasantville
When the stock of Reader's Digest Magazine began trading this spring for about half its 1995 price, the newly appointed chairman and CEO Thomas Ryder decided to renew stockholder confidence by selling off a Monet and van Gogh from its art collection. The two realized over $6-million at auction, not a fat enough finger in the corporative dam to offset the magazine's losses. As a signal to investors that Ryder means to strengthen the company by generating cash from the sale of its unproductive artworks, the magazine is planning sales of more of its 8,000-piece art collection, insured for $125-million. The only art purchases made by the corporation this year are 250 20th century photographs of children that will be used for the marketing of childrens' books.
ART OF THE UNKNOWN
In the October issue of ARTnews an article by Ann Landi entitled "Is the Price Right?" relates to a question with which an appraiser wrestles regularly, but does not delve as far into the subject as does the appraiser deals on a daily basis with value and pricing, whether for an artist's estate, a litigation matter, or for a marital dissolution.
How does a gallery decide what price to place on a work of art? One dealer explains that an untried artist's work might be price at $1,000 to begin and then gradually, if these works sell, the next exhibition will display higher price tags. The very fact that an established gallery has enough faith in the work of an artist to enable it to invest time and money into a one-person show is proof enough that the artists should be taken seriously.
If the artist has been exhibited in a prestigious group show, or has been acquired by a major museum (Many regional museums will accept gifts of art from donors out of courtesy in order to acquire more significant artworks from the same giver, so it's important to know how the artwork was acquired.)
On more occasions than we enjoy remembering, our firm has been asked to place values on the paintings, sculpture, prints or other artworks by forgotten, obscure, or unproven artists. Some are artists who were reputed to have had great success in their own countries, but who have not yet become established in the United States. Since this last group is one growing in numbers, there are certain ground rules for determining their values. Firstly, can they produce invoices to verify past sales? Can they produce CVs (Resumes) that establish their artistic history? Have they gallery contacts in their native countries? Were they simply regional artists who enjoyed a local reputation, or were they exhibited artists who showed works well outside their specific locale? In what publications were their works reviewed? Can they refer to any important scholar who might be familiar with their work?
An appraiser does not usually make aesthetic judgments in reaching values for unknown or little known artists. They base their findings on what prices the artist has received - on a regular basis - prior to this period in his career. The really professional appraiser scrutinizes the sales information supplied by artists to determine if the handful of sales may have been artificially produced to sway the opinion of the valuer, i.e., sales to friends or relatives offered now as proof of sales history. Regional sales must also be carefully interpreted. Galleries frequented by tourists may sell works of local artists, but these paintings or sculpture would not have a market outside that immediate area.
The appraiser also has to consider the time frame of the sales. An artist may have had a promising beginning and sold several paintings at the start of his career. It is usually the sales within the past year or two that should be considered. In matters of litigation, sales after the fact might be considered but never accepted as proof of the artist's values at the period involved in the litigation. There are two reasons for this: One is that in court cases it is the date of the event that matters, not what happened years before or years later, and secondly, there are too many ways of puffing up an artist's values after the fact to allow post-incident sales to be taken into account.
Values for art work backwards and forwards. A painting by an artist who is part of a popular movement may, when that art movement is in vogue, bring $20,000. When that school of art is replaced by another the same painting might be reduced in collector acceptance to $5,000. Twenty years later, when the artist's school and his reputation are revived, the painting might be sold for $15,000. Each period of time has its own value; there is no one writ-in-stone single price for any work of art. Within the past 20 years as legions of people became interested in the art market, the volatility of art has increased, and therefore prices for individual artworks should be reviewed yearly to ascertain if there have been any dramatic changes in his market..
When requesting whether or not an update on your appraisal is appropriate, the truly professional and dependable appraiser should tell you if the market for that artist - or that antique - justifies another evaluation, or whether you should wait another year for a review. If the appraiser values you as a client, he or she should be able to risk an immediate job for a long-term relationship.