London’s sales were dominated by guarantees and a few big lots. Does that mean the market is running out of steam or just treading water while it regains its strength?
This commentary by Marion Maneker is available to AMMpro subscribers. (The first month of AMMpro is free and subscribers are welcome to sign up for the first month and cancel before they are billed.)
The most significant message from the London Contemporary art sales held earlier this month is that the market continues to be heavily managed but tempered. The sales results, which we will delve into later this week for AMMpro subscribers, are down from the previous year. But the question is why. There are several explanations floating around: a new strategy, a different mix of material on offer and even the supposed shadow of Brexit looming over this sales cycle.
These were all offered as good reasons to ignore the lower overall value of the sales but we could add another conjecture. The market works in cycles where sales either raise expectations for future sales or cause a cautionary pullback against perceived weakness. Auctions, by their very nature as price-seeking events, are rarely static or consistent. The last three years in the art market, especially the Contemporary art market, have seen rising totals after a sharp drop in 2016. London’s Winter sales totals might just be the sort of regular retrenchment the market needs as a self-correction after two years of momentum gained.
More Rich Folks, Flat Art Sales
The New York Times’s Scott Reyburn gestured at this explanation with his recap of Clare McAndrew’s annual art market report for Art Basel. (We’ll try to put together a summary of her report and the other three reports published to compete with it later this week or early next.) McAndrew thinks the art market did $67.4bn in business in 2018 which was up 6% from 2017 and all but the best year of the last decade bar 2014 when the market did $68.2bn by her estimate.
A solid two percent of that gain was from two very large collections sold at Christie’s last year which would suggest the organic growth in the art market is pretty flat. Here Reyburn offers a thought that has been mentioned elsewhere by an economist who follows the art market: the rich are getting richer; and there are more rich people today than ever before; but that doesn’t meant rich people are spending money on art.
To Reyburn, this raises a favorite explanation for all things: wealth inequality. Except here, the very rich are spending on art but the merely rich are not. “A broader base of buyers lower down the wealth scale [have] so far been slower to engage in the market,” Reyburn says paraphrasing McAndrew.
No matter who is doing the buying, the London sales reflect a move away from the biggest ticket items and toward a search for new names, as the press reports suggest. Let’s take a look:
Henry Couldn’t Wait Until June
By far the biggest item of the sales cycle was Hockney double portrait offered at Christie’s which was the last remaining lot of the Ebsworth estate. Christie’s could not sell two of Hockney’s celebrated double portraits in the same season last year (though there had been early rumors that the house might try to sell the more flamboyant Portrait of an Artist (Pool with Two Figures) during the Frieze sales cycle in October to be followed by the Henry Geldzahler and Christopher Scott double portrait the next month.
There turned out to be more than enough drama surrounding the $90m sale of the pool picture that necessitated moving the Geldzahler, an echt New Yorker, to London. But there never seemed to be a doubt that the pool painting would be sold first. The question wasn’t whether the pool painting would set a new record for the artist. The question was how high the new record would be. Once that was established, the market would determine how to value the nuanced Geldzahler painting which was clearly worth a great deal more in the post-retrospective Hockney market. But how much more?
No one doubts that the Portrait of an Artist with its amalgamation of Hockney themes—shimmering chlorinated water, hilly landscapes, and Hollywood-style glamour—would find the market friendlier. That hasn’t stopped many from secretly rating the Geldzahler portrait as a superior work of art. Christie’s own specialists were happy to dilate upon the way Hockney depicted glass and reflections (the vase, the coffee table, Geldzahler’s glasses) in the painting, a variation on the way Hockney distinguished himself painting the refractions of light on and through water.
Anny Shaw, writing in The Art Newspaper, spoke to Hugh Gibson who, with a hint of defensiveness, declared the painting, “more important than the one Christie’s sold in New York—and I’m not the only one who thinks it.”
Gibson declared the price “quite cheap” and the product of a very small—and seemingly dwindling—number of buyers at that level. “The air is quite thin,” Gibson told Shaw. “[T]here are few people who have £30m to spend on a painting.”
Gibson might have elaborated that those who do have £30m to spend on a painting have previously wanted to spend that money on an artist with a longer tenure in the pantheon of market-valued artists like Rothko, Pollock, de Kooning, Lichtenstein, Warhol or Picasso.” One might even add that had Christie’s been able to wait, the painting might have sold better in May or, even, November giving the potential buyers a chance to assimilate the idea that he belongs in the small club of artists who can command high eight-figure prices. It took Francis Bacon nearly a decade of sales to regularly command such prices.
Tying Up Ebsworth’s Loose Ends
Christie’s couldn’t wait for several reasons. The drop in sales volume was most significant at Christie’s where there has been a change in leadership in the Post-War and Contemporary department and the new heads now say they want to balance London’s high-value load across three sales in March, June and October, instead of the two sales Christie’s was targeting in 2018. Without the Geldzahler portrait, Christie’s Evening sale would have suffered an even sharper drop in value.
Christie’s also had some unsettled business with the Ebsworth estate. The whole collection was guaranteed at a figure that should have been around $350m. The November sale of the estate went very well but it didn’t cover that nut. Christie’s was still $25m shy of making their money back. Getting the Geldzahler sold for $50m closed the books on Ebsworth in a way that would have been a relief to management. Judd Tully points out that the Geldzahler sale put the entire collection well in the black: “So far, the Ebsworth collection has realized £289,271,628 / $373,067,563.”
The Best of the Rest
Christie’s wasn’t the only shop where the big sales overshadowed the rest of the market. Phillips too had nearly half of their total sale wrapped up in the Richter jet they were bringing back to the market. That doesn’t mean there were no interesting moves there.
Sotheby’s also brought a number of new names to market and saw their efforts rewarded. The Art Newspaper’s Shaw points out that the sea change in institutional support for artists is beginning to filter through the market with the success of a few women artists and artists of color.
“The most telling aspect of their success at auction is that for these artists, it followed their institutional engagement. We’re often wary of when the opposite occurs. These days we forget that this is the natural course by which careers, and then markets, develop,” says Adam Sheffer, the vice president of Pace Gallery.
That kind of market growth is also happening without institutions taking the lead. Cecily Brown was a repeat out-performer earlier this month. “The last time her Night Passage was at auction was in October 2007, at the height of the pre-Lehman Brothers boom,” Colin Gleadell wrote of one sale at Christie’s, “when it was sold by Charles Saatchi for £468,000. This time, with Brown’s reputation still growing, the painting sold to a phone bidder for £3.1 million—one of the better returns in the sale.” While another one at Phillips, Gleadell noted, “attracted multiple phone bids from the US. In the end, it went (without a guarantee) for £1.8 million ($2.4 million), double its estimate.”
Gleadell also kept an eye on the bidding for another long-standing artist whose market has lagged until recently:
“Saatchi has not had a work in an evening sale for a while. Tonight, perhaps in competition with Per Skarstedt’s exhibition of David Salle’s paintings nearby (titled “Musicality and Humour“) which were selling from $275,000-$450,000 each, his 1998 painting, Bigger Rack, was on offer. The collector has owned the painting for 30 years (unusual in itself). It had a £200,000-£300,000 estimate. Two phone bidders vied with Bona Montagu of Skarstedt before she let one of them take it at £515,250 ($676,000)—the second highest auction price for the US artist.”
And while we’re quoting liberally from Gleadell, let’s add this important observation around these markets. The overall sales in London were heavily managed with third-party guarantees covering much of the value at risk, two thirds of Christie’s sale by Gleadell’s calculation. That doesn’t leave much room for drama in the market. Nonetheless, Gleadell was keeping count on what the dealers were buying:
In situations where there is no guarantee and a reduced reserve, dealers can take the opportunity to buy well below estimate. And buy they did. White Cube snapped up an Antony Gormley sculpture for £300,000 ($394,526), while the London-based dealer Stephen Ongpin bought a portrait by David Hockney of the textile designer Celia Birtwell for £555,000 ($729,874). The Nahmad family hoovered up a punctured white canvas by Lucio Fontana for £447,000 ($587,844).
Low reserves were not the only buying opportunities. There were still works in these sales that buyers believed represented good value, according to Gleadell:
The Bridget Riley market was also in good shape; her striped and colored Midi (1983) appeared to sell to an Asian buyer at the high estimate of £1.8 million ($2.4 million)—double the price it fetched two and half years ago. Meanwhile, a Chris Ofili work balanced on elephant dung supports from the collection of management consultant David Teiger sold to a not-yet-identified American museum above estimate for £915,000 ($1.2 million). And a swirling, smudgy 1979 Howard Hodgkin from the Tan collection was chased by Sotheby’s former chairman, Henry Wyndham, before selling for a double estimate £747,000 ($982,371).
Having said that, let’s close on one word of caution about calculating profit or loss in the market. Artsy’s coverage made the same assumption in judging the return on two separate Lichtenstein enamels. In one case, Vicki!, Artsy claimed the seller made a “half-million-dollar return” when the work was likely sold for a wash or such a small profit to have made the whole endeavor not worthwhile. Artsy made the same assumption a few nights later at Phillips where Lichtenstein’s Girl in Mirror sold for what might have been a $1m profit if one assumed that the auction house gave away all of its fees to get the consignment.
That outcome is possible in both cases but the way Artsy reports on the sales leaves the impression that consignors receive the entirety of the premium sales price which is an extreme rarity even during the madness of today’s Evening sale deal-making.
