Andrew Fabricant takes a new role as Chief Operating Officer as his spouse, Laura Paulson, joins the firm to establish an advisory arm.
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.)
Sometimes a lot of news comes at us pretty fast in one announcement. Late Tuesday afternoon, the Wall Street Journal’s Kelly Crow published some news from Gagosian Gallery that unpacks a number of themes within the art market. All of which are well worth considering at length. So forgive us if we devote a great deal of attention to what really amounts to a small corporate announcement: Larry Gagosian has named Andrew Fabricant to a new position, Chief Operating Officer, at the global art dealing concern. Additionally, it was announced that Gagosian would open a new division to offer art advisory services. That division will be run by Fabricant’s spouse, Laura Paulson, a relatively recent departure from Christie’s.
Both moves are important because they chart several broad shifts in the business of selling art. They expose the inner workings of the world’s first global gallery, a business large enough to have an impact on the art market, as its founder moves toward an age when his business will have to transition to a format that no longer requires his daily presence and leadership.
These moves raise questions about Gagosian’s leadership, the changing business model of the secondary market, the rise of advisory services to valuable estates and the rise of the next generation of dealers at Gagosian (or on their own.)
Fabricant’s New Role
Andrew Fabricant’s appointment as COO of Gagosian Gallery has been rumored for several weeks now. Fabricant, who spent 15 years with Gagosian before working with Richard Gray Gallery for another 20 years, had recently returned to the Gagosian fold as senior member of the staff with valuable connections and the potential to play statesman.
- “Mr. Fabricant said his duties will encompass everything from negotiating real-estate leases and art sales to brainstorming with directors on potential shows and visiting artists in their studios—and showing up wherever Mr. Gagosian needs him to be. “It’s a gargantuan task to run this gallery, and I’m hoping to take more stress off Larry,” he said.”
Thus, one saw Fabricant appear in the videos accompanying Gagosian’s Online Viewing room presentation of an Albert Oehlen work that successfully sold a $6m painting before the Art Basel Hong Kong art fair.
Crow speculates that creation of the COO’s position for Fabricant less than a year after his return is a sign that the 64-year-old Fabricant is a potential successor to the 73-year-old Gagosian. But that doesn’t really make much sense for reasons we will address below. Here it is worth making a few observations about Gagosian’s leadership style and Fabricant’s leadership experience.
On paper, Larry Gagosian ought not to have been the first global gallery with locations in multiple time zones and jurisdictions. Gagosian’s reputation was built around his larger than life personality, indefatigable work ethic and relentless focus on remorseless deal-making. At Gagosian’s gallery, the artists are in the background; deals are in the foreground; and Larry seems to be at the center.
And yet, any operation that bothers to announce an advisory panel of 24 dealers who will act as a steering committee for the enterprise, as the WSJ story told us today, needs must be more than a one-man band. In catering to 24 of his directors, Gagosian is both acknowledging their importance to the firm and revealing the depth of his managerial skill.
The famously hard-driving, “I’m-at-work-why-aren’t-you” dealer has attracted to himself, trained and satisfied at least 24 go-getters he doesn’t want to see leave. There are several other dealers, like Fabricant, that Gagosian did launch into their own very successful careers over the last 20 years. They too demonstrate that Gagosian has some innate motivational skill.
During that same 20-year period, Andrew Fabricant was a highly successful art dealer. But he wasn’t an empire builder, nor did he manage someone else’s empire for them. Fabricant’s bona fides come from having been involved in some of the biggest art purchases ever made. Those skills are not in doubt. His ability as a leader is un-proven.
Collections Hold the Key
Hold that thought. Let’s take a moment to pull back and look at some of the changes that have recently begun to influence the composition of the art market and how deal-making is staffed. Gagosian Gallery’s expansion into a global enterprise that rivals the auction houses in reach has forced other firms to bulk up to compete. Meanwhile, the auction houses have recently undergone a bit of makeover as senior staff shuffled positions within the three principal auction houses in the Contemporary art market and two of those houses, Christie’s and Sotheby’s have recently shed some of their most tenured (and highest paid) staff.
In the years after the global financial crisis, the auction houses were active market makers employing incentives and complex deals to generate spectacular sales as much to generate confidence in the art market as they were interested in driving revenue. Without sales, there is no art market. In the years from 2009 to 2015, art values rose with such rapidity, there was little incentive to sell.
Since 2016 when Sotheby’s silenced skeptics with the strong performance of the Ames collection, the business has focused more on landing esteemed collections over the deal-making of individual specialists. Indirectly, this trend has led to figures like Brett Gorvy leaving to become private dealers but also offering advisory services to estates whose legal and financial advisors seek “inside” knowledge when dealing with the auctioneers.
That brings us to the second part of the announcement. Gagosian is opening an advisory service to be run by Fabricant’s spouse, Laura Paulson, a veteran of both Sotheby’s and Christie’s.
- “Ms. Paulson said she approached Mr. Gagosian with the idea of starting her own advisory firm in his shop. They agreed that the firm would be based in the Gagosian headquarters on New York’s Madison Avenue, where she will have a separate office entrance, email domain and database. Ms. Paulson will manage her own team and intends to hire about five or six people, she said.”
Crow’s article puts a heavy spin on art appraisals and their role in Paulson’s career:
- “Appraisals became Ms. Paulson’s forte. She left the house in late 2017 as global chairman of 20th century art in part, she said, because the auction house’s management suggested she step back from conducting appraisals regularly. “They wanted me to turn over the reins of these collections I’d cared over for years,” she said, “but these are relationships, not portfolios.”
The explanation, according to Paulson’s former colleagues, lies not in Paulson’s exit from the auction house but in her current value to Gagosian. At Christie’s, Paulson never charged her clients for appraisals. They were a way to develop relationships, gather information and project an image of neutrality while locking a client into dealing only with her.
Paulson won’t be able to charge for appraisals at Gagosian. Nor will Larry or Fabricant want her to. She’ll be a conduit for Gagosian Gallery to pitch collectors without ever charging an advisory fee. But her services will help Gagosian’s directors make sales and commissions.
When the collectors Paulson advises eventually die or decide to sell their art, Gagosian will have a chance to cherry pick works for private sale or Paulson can bring the big collections to the auction houses who will compensate her with an override fee. All three auction houses recently added points to the top tier of their Buyer’s Premium as a means to compensate these outside advisors.
The number of boomer collections coming to market have allowed the auction houses to let their best paid staff become independent advisors who only get paid when they bring business to the firm. Setting Paulson up gives Gagosian access to this trend. This is something that Lévy Gorvy already does.
With Paulson addressed, we can return to the main theme of this essay: Gagosian’s succession plan. Like King Lear, Larry Gagosian has more of a hope than a succession plan. Unlike Lear, Gagosian seems to be addressing the problem before he is too old and his successors are too fractious to keep his kingdom together.
Gagosian himself is a swashbuckler, a heroic figure. But his preternatural management abilities have either been unable to identify a worthy successor or unwilling to show favoritism. Perhaps he just doesn’t want to acknowledge his own eventual departure. By installing Fabricant between the younger generation of directors and himself, the firm’s namesake may have come up with another way to figure out the next phase of the gallery.
Gagosian’s alternative plan may be to create enough space for that generation to grow into their own future. In this version, Fabricant isn’t so much the successor as he is a transitional figure. If Gagosian is the King, Fabricant is a more of a Grand Duke artfully corralling the other duchies to retain their fealty. Medieval countries often oscillated between strong and weak kings as the power of regional rulers waxed and waned.
With Fabricant playing regent to these young dukes and duchesses, the next generation can decide over the coming decade how to transform the gallery from a sole proprietorship into a true partnership. One of those 10 might emerge as far superior to his or her peers and assume Gagosian’s mantle as the next sovereign. A gifted peacemaker who can earn the trust of the larger group to assuage and mollify any fractious issues might take over from Fabricant and lead Gagosian as a true partnership like a talent agency or a law firm.
A smaller core might coalesce eventually causing some of the others to choose to go it alone or split off as a group. It’s even possible that Gagosian won’t be able to loosen his grip even with Fabricant’s help and the golden goose might just peter out of eggs as the next generation loses patience and leaves.
Whatever happens next, the story at Gagosian has started to shift from the founder toward this new generation whom we’ll all surely be learning more about in the coming years.