The Times can’t decide how it feels about the art market; Kenny Schachter debates Kelly Crow’s take on the market; Don Bryant jilts an art loan adviser over (non-art) valuation dispute.

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.)

Don Bryant’s Loan Adviser Quit Over Principle, Wants Pay

Lauren Ridenhour works providing family offices and HNWI, as the wealth industry calls them, advice on dealing with banks especially around their art. For prominent wealth manager, vineyard owner and art collector Donald Bryant, Jr., she had helped him and his wife, Bettina Sulser Bryant, renegotiate a loan where some of their $300 million in art was pledged as collateral on a $98m loan. (You can see some of the works in their collection in this Wall Street Journal photo essay on the Manhattan apartment they formerly owned which features works by Jackson Pollock, Willem de Kooning, Phillip Guston, Richard Serra, Georg Baselitz, Picasso, Giacometti, Robert Ryman, Louise Bouregois and Robert Rauschenberg. A Warhol Marlon Brando work was sold at Christie’s in 2012 for $23m) and Ridenhour did her job so well, she saved the Bryant’s $3m over the course of the loan. As compensation, she was paid $400,000.

That loan comes due this year. In preparation for the end of the three-year loan, the Bryants went back to Ridenhour in May of 2018 to see if she could work her magic with the banks again. The original lender was shifting its underwriting and wanted more recourse to the Bryants’ income while still using art as collateral.

Luckily the Bryants had income from the winery they own, according to a complaint Ridenhour filed with the Federal Court in the Southern District of New York seeking to be paid for the agreed upon work on renewing the loan. The complaint explains that “in addition to questioning the accuracy of income streams from Mr. Bryant’s insurance business and other income sources,” Ridenhour had, “observed that the Bryants represented the valuation of the Winery at an exceedingly generous $125m.”

That valuation was a substantial increase from documents that had been submitted only months earlier. To make matters more awkward, Ridenhour was advised that sales had declined at the winery by 40% in 2018 and a current valuation being prepared would have to be “possibly 30-40% lower” than the $100m previously claimed. Things got frosty when Ridenhour explained that the headwinds the winery was facing would have to be acknowledged to the current lender and any future lenders.

A few months later in November, Mrs. Bryant emailed Ridenhour to let her know the couple no longer wanted her to work on their loan. According to the complaint, “Mrs. Bryant terminated Ms. Ridenhour’s services because Ms. Ridenhour questioned the validity of Mrs. Bryant’s financial representations to JPMC [the lender] and refused to provide inaccurate financial information to JPMC, denying Ms. Ridenhour the compensation that she had earned.”

Contra Crow

Kenny Schacter is took exception with Kelly Crow in his take on last week’s market action:

I’m a fan of the Wall Street Journal’s Kelly Crow, but not when she states, “The art market may be entering its Frothy Period.” In my estimation it’s the opposite—the only froth is in the reportage [….]

Schacter’s got a point. Forgive us for piling on to cavil about another part of Crow’s report:

If there were cracks, they showed up in the so-called middle market, where pieces tend to hover below $1 million. Sotheby’s said it sold 90.9% of the offerings in its high-profile, $350 million evening sale of impressionist and modern art on Tuesday, but the following day it only sold 72% of the works in its day-long sale of middle-market material. Christie’s $539 million contemporary evening sale on Wednesday was 91% sold by lot, but its day-sale counterpart was only 83% sold.

We look at the middle market sales in detail in our analysis of the results available to AMMpro subscribers. At least for Contemporary art, the dollar volume spent on art during the day sales went up by 2.5% last week. That was lower than the 7+% rise in the Evening sale totals but hardly a sign of cracks in the market. But what we’re more concerned to read is the WSJ citing statistics that it surely knows are not meaningful in the way they’re presented.

In plain English, citing the lower day sale sell-through rates for Imp-Mod and Contemporary art is not evidence of anything. The sell-through rates between day and evening sales always show a disparity with lower sell-through rates during the day. We all know why that is. It doesn’t need to be explained. Nor should it be presented in the Wall Street Journal to make an erroneous point.

The Times Can’t Decide How It Feels About the Art Market

Last week’s unexpected fireworks at the top of the art market with the record price paid for works by Claude Monet, Jeff Koons and Robert Rauschenberg seems to have caught the New York Times off guard. Traditionally, the Times maintains a generally disapproving stance toward the art market. At the same time, the paper doesn’t want to feel left out when covering wealth, power and culture.

It’s a tricky situation to navigate. After all, the art market isn’t about the cultural value of the art. It’s a method for distributing art. But because the buyers and sellers are wealthy, sometimes famous persons, there can be a great deal of confusion about what’s newsworthy and what isn’t. Last week’s coverage revealed starkly that the Times really hasn’t thought through its coverage at all.

Let’s start with perhaps the most egregious story the Times ran last week. Here’s Jacob Bernstein, the Styles reporter who wrote about Mary Boone before she went to jail, framing his story about Robert Mnuchin bidding on the Jeff Koons Rabbit:

On Wednesday night, shortly after the gallerist Mary Boone traded in the Hermès for prison garb, fat cats from what is often described as the world’s biggest unregulated market besides guns and drugs traipsed into Christie’s for its postwar art evening sale.

Peter Brant, who served almost three months for tax evasion, sat near the front of the gallery.

Nearby was Larry Gagosian, the veteran art dealer who has settled two government lawsuits related to taxes. He purchased a Warhol portrait of Elizabeth Taylor for $19.3 million.

But the man of the hour was the gallerist and former Goldman Sachs partner Robert Mnuchin, who was bidding for an anonymous client. He sat in an aisle seat near the front wearing a cream-colored jacket and got in on the action when one of the artist Jeff Koons’s rare silver bunny sculptures came up for auction.

The rest of the hastily thrown together profile was more concerned with Mnuchin’s son, the Treasury secretary, and the potential buyers than it was with Mnuchin’s career as an art dealer. The fact that Mnuchin Gallery currently has a valedictory show of Willem de Kooning’s work drawn from five decades that demonstrates Mnuchin’s stature as a dealer barely gets mentioned. The article probably validates the gallery’s decision not to seek mainstream publicity for that show. The story would surely have been more about Mnuchin’s son than his ability to secure coveted de Kooning loans from some of America’s leading collectors and museums.

A story chasing the likely buyer of the week’s biggest lot, the $91m Koons Rabbit, was at least understandable, even if that lede was a cheap, tabloid shot. The beat of the Styles section is the social pretensions of New Yorkers. The Koons buyer is fair game.

On the culture side, the Times chose to run a puff piece on KAWS on the eve of the Contemporary art sales stuffed with 16 works by the artist with a combined low estimate of $6.59m. It was a smart move considering the heat on the artist. Even though the Times was forthright about the art world’s ambivalence toward KAWS, the story took pains to give him credibility among actual working artists.