An Experienced Collector Responds: “About Fontana & the Italians, Beware the Dealers…”

The previous post speculating that the Fontana market was driven by global demand for easily identifiable abstract art brought out some sharp commentary from a regular reader who happens to be an experienced collector. This person is one of the many who like to get in touch when they feel I’ve gone too far off the reservation. (Feel free to box my ears whenever the spirit moves you too.)

Hi Marion,

I hope you’ll enjoy ABMB. A quick note about that Bloomberg piece about Italian art…ever since I started following the art market (late 1980s) Fontana was in London evening sales, as well as Burri, and always at comparatively high price. Prices were already much higher in private in Europe.

Just to give you a sense, there was a Twombly sold in June 2005 at Sotheby’s London. That Twombly was the third highest price of the Evening sale. It was tied with—guess who?—that black and silver Fontana which was sold again at Sotheby’s in November.

There is nothing new here, but for two factors: the US market (which also discovered Twombly, and Richter, after Europe) and speculative artists such as Castellani, Scheggi and company.

The Italian market is an entirely dealer-driven market with very big players holding large inventories (such as with Fontana and Burri) and a smattering of Italian galleries backed by big Milanese money.

The demand for easily recognizable abstraction has little to do with the rise of that market. You go to an Italian sale in London and 80% of the audience is made up of dealers. Half of them leave the room when the post war and contemporary sale starts, right after the Italian sale.

I responded: “I knew I was going to hear from you about the Fontana comparison to Richter. You are right about dealer’s dominating this market. Those works are trading like poker chips or bitcoins. But the dealers have to have SOME reason for buying at higher prices even if they make up the market themselves.”

To which my mentor responded (and this is her real point) :

Right, but it is the mechanism of demand creation in the art market that is erroneously explained in that piece. The more the merrier. As in the Picasso, Warhol and Richter markets. Flooding a market creates a demand, contrary to what people think. It is a mechanism that is characteristic of the art market.

Flooding the market means supplying auction houses (where do you think most of those white and red Fontanas that stuff evening sales come from?), but also mounting simultaneous exhibitions in galleries of the same artist, whether Burri, Fontana or Castellani, or artificial group shows, etc. if institutions help (Guggenheim, Musee d’Art a Moderne de la Ville de Paris…), all the better. That is how you create a demand.

Oh, and I was almost forgetting the last step in the demand creation process: having a recognized art market expert endorse the movement in a Bloomberg piece…