Or, the Downside of the Growth of the Art Market

Thought that Private Yacht Fitted Out as an Art Gallery was a Bad Idea?

First we had the Grande Luxe, an art gallery on a large-ish Yacht meant to bring great works to where the wealthy were relaxing. Luckily for the pictures and antiques, the idea didn’t catch on. But it turns out the cruise lines have been playing the popularity of the art market for some time. The New York Times offers a fascinating glimpse of what happens when you convince people that art is an investment and they should buy without having done their research.

One is Luis Maldonado, a businessman from the La Jolla section of San Diego with interests in finance and construction and a penchant for Latin American art. He was touring the Mediterranean with his wife, Karina, on the Regent Seven Seas Voyager in November 2006 when they decided to stop by the Park West art auction promoted onboard.

He was surprised to find artworks by Picasso and Rembrandt in the auction area, a lounge near the casino, where they were greeted with Champagne. He gravitated toward the Picassos.

There, he said, the auctioneer talked up two “museum-quality” Picasso prints appraised at more than $35,000 each and a trilogy of Salvador Dalí prints valued at $35,000 as a set. Mr. Maldonado said the auctioneer described the works as “good investments,” explaining that they were being offered at 40 percent off their “appraised value,” with no sales tax.

When he asked about the nature of Park West, he said he was told it was on par with Christie’s and Sotheby’s.

It was easy to make the leap. After all, he thought, it was a prestigious cruise, and he had gotten discounts on good wines onboard before. He started bidding, with little competition from the room, and stopped at several thousand dollars below Park West’s appraised value on each. He received an invoice marked “All sales are final.”

It was only after Mr. Maldonado landed back in California that he did some research on his purchases. Including the buyer’s premium, he had paid $24,265 for a 1964 “Clown” print by Picasso. He found that Sotheby’s had sold the exact same print (also numbered 132 of 200) in London for about $6,150 in 2004.

In addition, he had paid $31,110 for a 1968 print, “Le Clown” by Picasso; Artprice.com, an online art database, showed it going for about $5,000.

Art Auctions on Cruise Ships Lead to Anger, Accusations and Lawsuits (The New York Times)