The art conference held by The New York Times in Berlin last week had some head-scratching moments. Some following the event on social media were curious to see the spouse of the conference host, an intellectual-property lawyer and consultant, on a panel debating virtual reality as an art form. But that was minor compared to the unexpected way in which an offhand comment by David Zwirner was blown up into a confused discussion of how to shore up the position of smaller galleries in the art market.

It is not clear that David Zwirner’s offer to pay more for his booths at art fairs was part of a premeditated strategy to deflect some of the frustration toward the growth of larger global galleries in the art market; or that, in making the offer, it would be treated as “breaking news” by the New York Times’s social media team or picked up by a number of other art market reporters as an important or significant offer.

What should have been a brief story turned into something else late on Friday when two stories appeared in the art press picking over the issue in ways that were probably counter-productive.

If Zwirner’s comment was casual, the response seems to have equally caught others in the art economy off guard. Art Basel’s director Marc Spiegler, who has little reason to feel caught in the middle of the debate, seems to have taken the remark too close to heart. Art Basel itself is already structured to help the bigger galleries subsidize the presence of smaller firms. The fair, as do many other art fairs, also runs a number of programs that make it easier for newer and smaller galleries to thrive within their business.

Spiegler doesn’t seem to have been comfortable leaving his “it’s-a-little-more complicated-than-that” response on the dais to speak for itself. (Update: To be fair to Spiegler, the badgering from the Times’s Scott Reyburn visible in this panel video suggests he was put in a no-win situation. Reyburn ignores his affirmations and repeatedly interrupts Spiegler while he’s giving a thoughtful and thorough answer.)

From his simultaneous appearance in articles in The Art Newspaper and Artnet News—with no corresponding quotes from the directors of other international art fairs like TEFAF or Frieze—we can only assume the Friday stories were predicated upon Spiegler’s contacting the media to get his talking points out.

In a global economy that creates larger players at the expense of smaller ones in most cultural businesses ranging from music to movies to sports to print and media, it seems odd to assume that art fairs are central to the issues that impact smaller galleries. Instead of trusting in that fact, Spiegler seems to be dragging himself back into the center of the debate by counter-attacking.

To Artnet News, Spiegler laid out his case that booth fees were not main issue:

• “It’s not sufficient to have a little bit more of an increase [in booth prices], which is what David said,” Spiegler maintained. “That’s not going to have an impact across the whole fair. When we talk about how we can make things better for galleries, it’s not just in the context of the fair but in general. And it’s not just about the square meters.”

To The Art Newspaper, Spiegler re-iterated his talking points a second time, including the idea of a form of transfer fee taken from European football leagues:

• “Until now, I’ve never heard the most successful galleries publicly say they were worried about their younger peers, and offer to counterbalance the consolidation within the art market…”
• “It’s the beginning of a conversation. It’s an acknowledgement of the fact that [Zwirner] has benefitted from the system, while others have not, and it is trying to counterbalance that. It is seeing itself as part of a larger ecosystem.”
• Spiegler points out that it was not just art fairs that put significant financial strain on galleries. Often, young galleries spend years supporting artists at the beginning of their careers, only to have these artists poached by larger galleries when their careers start to take off. To soften this financial blow Spiegler suggests a “transfer fee”—like in professional football. “At the moment, there is no system of benefit when an artist leaves,” he says.
• He also suggests that larger galleries might offer to co-sign small business loans that smaller galleries struggle to secure on their own. Collectors can play their part by paying galleries on time and buying works they have reserved, Spiegler says.

Since the art market shares none of the institutional structures that make transfer fees a feature of European football, the constant repetition of the idea by Spiegler and others does nothing but confuse the issue. Artists are not athletes. And other sports, and even football in other regions of the world, do not have transfer fees which take value from the athlete and give it to the institutions that may or may not be worthy. More to the point, professional athletics is no less a winner-take-all economic environment than the art world or other cultural industries. The chasm in rewards between the top and middling players is just as great or even greater.

One can say the same about the idea of larger galleries co-signing loans which is equally insidious because it would promote the idea of larger galleries gaining access to the work of artists represented by smaller galleries in exchange for financial support. Instead of paying the artist and gallery full value, the co-signing gallery would gain a low-cost option if the loan were to be in default.

These financial solutions have the flavor of an industry without financial intermediaries. In other words, Spiegler is promoting a 19th Century or earlier form of finance for a 21st Century business. It seems hardly advantageous to the small galleries or artists.

What’s so surprising about all of this is that Art Basel, or any of the other global fairs, has the opportunity to expand their business by creating a federation of smaller galleries that can use the art fair’s platform to operate at a level commensurate with their global competitors. Art Basel has the brand value, corporate backing and economic incentive to create services that amplify small galleries’ abilities while mitigating their disadvantages.

The problem is that Art Basel has been slow to develop these services. One could easily imagine a finance art of Art Basel; or a marketing platform that puts member galleries on a global scale. One of the tells in the weekend’s stories is when Spiegler falls back on an old habit. In the past, having a pugnacious stance toward the auction houses has benefitted Art Basel by offering the member galleries an advocate for their grievances.

The auction houses don’t play a meaningful role in the primary market. Yet, Spiegler cannot resist throwing them into the fight with Zwirner and the mega-galleries when he spoke to The Art Newspaper:

• Spiegler also cited the importance of auction houses contributing to systemic assistance, considering how they benefit greatly from the work small galleries do to support artists’ careers, and are dependent upon a heathy gallery ecosystem.

Oddly, for all of Spiegler’s antipathy to auction house practices, he was keen to embrace them recently when a former auction house star used the opening of the Hong Kong fair to promote a massive private sale even as ABHK’s director acknowledged to the New York Times that some regional galleries were struggling with costs:

“From the Asian standpoint, we are still growing and developing and I think art fairs are still important in this part of the world.”

“But I fully understand the difficulties and why sometimes gallerists feel they need to opt out because they feel like it’s a race they can no longer sustain,” she added. “We are trying our best to make sure that it adds up for them, and that includes possibly cost cutting.”

Let’s close by returning to the original point. Art Basel is unnecessarily putting itself in a defensive position here that only serves to highlight negatives that are not its responsibility and minimizes the many ways in which Art Basel—and other international fairs—can be part of the solution.

Should big galleries subsidise smaller ones?  (The Art Newspaper)

David Zwirner Proposes an Art-Fair ‘Tax’ on Top Galleries—But Art Basel’s Marc Spiegler Has Other Ideas (Artnet)