Christie’s wins a big consignment; Last week saw lots of numbers about the art market but many of them remained unclear.

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.)

Collectors Say Christie’s Has $30m Ruscha

Christie’s is already selling 35 works on paper by Ed Ruscha consigned by architect Fred Clarke and the cache looked like it would meet an excited market for the artist’s work. Now word is trickling out of the Ruscha collector community that Christie’s has won a tough competition for Joan Quinn’s Hurting the Word Radio #2 (1964) that will presumably be featured in the November sales. One house was said to have secured a $30m third-party guarantee for the work which means the sale price is already equal to Ruscha’s 2014 record price for Smash (1963) which sold for $30.4m.

It’s Hard to Find Real Numbers in the Art Market

Last week was a tough one for the anyone trying to make sense of the art market. The problem wasn’t the market or its fecklessness. This week’s sales will give us a better sense of the cutting edge of the Contemporary art market. Rather the problem lay with art market commentators and their use of vague and misleading statistics. The spurious numbers came from a range of sources including a purportedly deep study of women artists and their place in museums and the marketplace; a nonsensical comparison between the Manhattan condo market and the art market (not that those two markets have nothing to do with each other but that the statistics adduced to make a connection made absolutely no sense) and a report on London’s upcoming Frieze sales that are said to be down across the board but are really mostly just down at one house.

Artnet’s Tim Schneider wanted to draw our attention to the fact that a study featured in the New York Times found a slew of unsold luxury condos in New York City. For some reason, the 35% decline in the number of contracts signed for apartment’s priced above $4m matched the 35% drop in the value of works priced above $10m auctioned this year. That’s right. Both markets saw a 35% drop.

Not that Schneider thinks these two studies are measuring the same phenomena. Or maybe he does:

[W]hile it’s a bit spooky to see an identical percentage drop for multimillion-dollar assets in these two different markets, I’m not suggesting that art at auction and condos in New York are mirror images of one another. These aren’t even the same metrics, after all. In the condo market, we’re talking about, effectively, sell-through rate for assets above a certain price, whereas in the art market, we’re dealing with a year-over-year comparison of total sales value generated by assets above a certain price.

Despite the apples-to-oranges factor, though, the general consonance between these two markets matters […]

After some thought, it would appear that Schneider does see the “spooky” recurrence of the 35% figure as meaningful. It’s just not clear how these two arbitrary measures are connected or why the 35% figure is significant:

We should not view the drastic underperformance at the peak of the auction market or New York’s condo market as isolated phenomena. We should instead view them as linked outcomes flowing from the decisions being made by many of the same ultra-wealthy, investment-minded people who have helped inflate demand in both markets this century, and especially since the start of the recovery from the 2008 financial crisis.

The art market and the New York condo market are connected. They both respond to interest rates. They both reflect liquidity conditions among the global class of UHNWI said to number as many as 200,000 by Knight Frank. But the condo market above $4m and the art market above $10m aren’t necessarily populated by the same buyers no matter what Schneider thinks. In today’s interest rate environment, a $4m apartment can easily be bought by someone making less than $1m a year. A $10m painting is not something many of those 200,000 UNHWI-ers would buy. You’ve got to have a lot more than $30m in liquid assets to buy a $10m painting. So the market for apartments reaches a much larger group than the market for masterpiece paintings.

Could that 35% figure represent something meaningful? Possibly. But it is far more likely to simply be the coincidence it appears to be.

A far more rigorous art market study published by Artnet and Sotheby’s Art Agency Partners draws attention to the market for works of art made by women. The results are unambiguous and disappointing:

Just 11% of all acquisitions and 14% of exhibitions at 26 prominent American museums over the past decade were of work by female artists. According to a joint investigation by In Other Words and artnet News, a total of 260,470 works have entered the museums’ permanent collections since 2008. Only 29,247 were by women.

The authors offer a number of reasons for this including the lack of auction prices to give acquisition committees confidence but there is something not entirely right about these headline numbers. For some reason, the study gives us an aggregate number 11% of all acquisitions over a decade. Why not show us how acquisitions have changed over those ten years? That’s a long time. Did they go up? Did they go down? What macroeconomic factors might have affected these acquisitions?

Here is the closest we get to a ten-year acquisitions chart but it is broken down by year of production:

One cannot but help notice that the combined lines for works produced since 1946 are going up and to the right over the last ten years. Does that mean museums are acquiring more work by post-war and contemporary artists at, say, the expense of women Modern artists as the chart suggests?

Another odd choice in these statistics is the way they are limited to the number of works by women artists bought. There is no differentiation among these works. How many are paintings or sculptures? How many studies or works on paper? What’s the value composition of these same 3000 works?

Value seems to play a role in the study but only as a foil to suggest the museums are falling behind. Here, take a look:

Again, notice that the number of works acquired fluctuates. Though the overall level is higher in the period from 2014 to 2018 with a dip in 2016 when the art market experienced a substantial pull back across the board. Since Art Agency Partners and Artnet don’t tell us, we can’t know whether the number of works remains the same because the price level for works by women was rising. The chart shows us the sales volume rising. But we don’t get average prices and we don’t know the composition of those museum acquisitions. 3000 major works is going to cost a damn sight more than a 3000 incidental works.

If the museums are concerned with price comparables, it suggests they’re spending money on more significant works. That’s just speculation. Artnet and AAP don’t tell us. But it matters more than a bit to their broader argument that institutions are paying lip service to becoming more representative.

None of these questions excuse that lack of progress.

Finally, no week of art market statistics would be complete without worries over a potential impending fall. Katya Kazakina contributed to the worrying with her preview of the Frieze Week sales which are said to be down either because of Brexit uncertainty, a dearth of estates on the market or a decline in the “masterpiece market” of works over $30m. According to Kazakina on Bloomberg, “Through mid-September, a total of 14 works fetched at least $30 million, down from 23 such pieces during the same period in 2018. Aggregate sales for those works tumbled 38% to $781.8 million, according to an analysis of Artnet data.”

Looking ahead to next week, Kazakina warns:

Christie’s and Sotheby’s are similarly forecasting double-digit declines in London during Frieze Week, while smaller competitor Phillips, less dependent on collections and high-end properties, projects a 2% drop.

Bloomberg also includes this helpful chart:

The only problem is that the drop is primarily confined to a single house, Christie’s. That could reflect a change of strategy at Christie’s, a shift in composition of material and the most suitable sales location or other factors. Unremarked upon, is the fact that Phillips is employing a far greater number of third-party guarantees than its rivals to achieve its flat estimate range.