Who Will Laugh Last? The Press or the Artist?
With the collapse of markets everywhere since the Lehman Brother’s bankruptcy. it comes as no surprise that press is fixating on the market for Damien Hirst’s artwork. After all, the Beautiful Inside My Head Forever sale defied all expectations even with the turmoil and uncertainty of Lehman’s collapse earlier that week. Ever since, Hirst’s success has been trotted out as a symbol of irrationality and excess even in extremis.
Three months later the financial world is a very different place. Under the tabloid rules of emotional journalism, there must be punishment for excess. So Bloomberg and Portfolio have trotted out their stories on the “collapse” of the Hirst market:
Three months after Hirst sold more than 200 of his works for 111.5 million pounds ($199 million) at Sotheby’s in London, his market has contracted dramatically. At the bellwether November sales in New York, 11 out of 17 Hirst lots failed to find buyers at three auction houses. On the resale, or secondary market, dealers said demand has dried up, especially for works above $1 million.
(A broader analysis of the Hirst market after the jump.)
At Portfolio, Liz Gunnison lifts most of the Bloomberg story (note the bellwether echo): “In November, during the string of modern and contemporary art auctions in New York, 11 out of 17 Hirst lots failed to find buyers. Certainly, the slide in demand for Hirst’s works reflects the state of the art market in general, as illuminated by the results at the bellwether November auctions.” But then Portfolio makes a fundamental mistake about the art market, the writer treats works of art as fungible expressions of the artist’s value:
Paintings by Warhol, Bacon, Rothko, Manet, Matisse, and Monet failed to sell — in short, artists much better than Damien Hirst could not hold their value, either.
For all we know, Hirst’s career may have ended this Fall. But even if that is true, it won’t be apparent for some time to come. More to the point, there’s a further confustion of markets here. If Hirst were a stock making a new high in September and retreating in December, the story would be one of retracement and possible weakness but also the opportunity for the stock to go much higher.
When Sotheby’s auctioned in 2004 the contents of Pharmacy, the restaurant Hirst had been a part owner of, his market had a similar reaction. It took two years before the volume of Hirst’s work and price level returned to the 2004 level. In 2007, the dollar volume of Hirst’s work at auction tripled the year of the Pharmacy sale. In 2008, it tripled again with the BIMHF sale representing 80% of the Hirst auction volume.
Indeed, the BIMHF sale total was more than preceding five years of auction activity including Hirst’s 2008 sales separate from the BIMHF sale. Put in that context, the fact that anyone thought to try to sell a Hirst in New York this Fall is more noteworthy than their failure to sell.
Damien Hirst, of $100 Million Diamond Skull, Sees Prices Slump (Bloomberg)
Has Hirst’s Bubble Burst? (Portfolio)