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Artelligence for May 15, 2018

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Brooke Lampley Makes a Good Case for the Modigliani Deal: By now you’re probably tired of reading about the Modigliani sold last night at Sotheby’s for $157m. So watch this interview with Brooke Lampley instead. Newly arrived at Sotheby’s, Lampley is becoming their go-to representative on Bloomberg mostly because she stakes the right ground and defends it well. Here, she talks about the Modigliani price as a confirmation of an earlier public price and some lower, controversial private prices. Watch Here …

Rockefeller Profits Might Also Have Been About Timing: Colin Gleadell maks an interesting observation about some of the returns on the Rockefeller works of art, “a Juan Gris cubist still life that he bought for $45,000 in 1966 sold for $31.8 million. By the same token, a Georges Seurat painting of a fieldworker, bought in 2006 for $1.4 million, sold for half that.” One factor could be time. Larger gains come from longer holding periods. The Seurat bought in 2006 hasn’t had much time or chance to appreciate. Then, again, the Gauguin still life bought around the same time sold for multiples of its fairly recent price. …

Heritage Holds $12.2m Comic Book Auction, The Largest of Its Kind: In Chicago, Heritage set some new records for Comics and comic book art:

  • Chicago’s largest public auction dedicated to vintage comic books and original comic art fetched $12,201,974  – setting the world record for the most valuable sale of its kind. The top lot claimed its own record when artist Frank Frazetta’s Original Art titledDeath Dealer 6, 1990 – first published as the cover for Verotik’s 1996 Death Dealer #2 comic book – more than doubled the all-time auction record for any piece of comic art when it sold for $1.79 million. “As the live session opened, the Frazetta painting had a bid of $600,000, but within moments it had come down to two collectors, bidding by phone, who waged a pitched battle for this very desirable painting,” said Barry Sandoval, Director of Comics Operations at Heritage.

Sotheby’s Sold $318m in Art, So Why’s Everyone So Glum?

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Helena Newman was clearly nervous last night as she began the Evening sale of Impressionist and Modern art at Sotheby's. A seasoned auctioneer and art market professional, Newman's demeanor in the box is usually more commanding and operatic. The immediate question forming in viewer's minds was whether Newman had a tell. Eighteen lots later, it appeared that she did. The Evening's focal point lot, Modigliani's Nu Couché sold to its guarantor for $157m or a price within 8% of the record set by Liu Yiqian two and half years ago for another Modigliani nude.

Throughout the run-up to the sale and during its immediate aftermath, it has been easy to find any number of opinions on the sale and whether the painting would or should get a bid in advance of the pre-determined one Sotheby's had arranged.

Because it seems to matter, we can add to that debate a question—heightened in this era of extensive or pervasive Irrevocable Bids and third-party guarantees—about whether the atmospherics of the auction room with its frisson of drama and voyeurism matter to bidders, the majority of whom participate by hearsay clutching a phone and listening to a play-by-play narration from their representative.

As far as the lot of the evening goes, there was clearly some confusion about who would bid and how much. It is worth noting that the scene at Sotheby's was nearly identical to last week's scene at Christie's when auctioneer Jussi Pylkkanen stood at the podium eyeing a specialist during the crying of the top lot from the Rockefeller sale.

Both Pylkkanen and Newman, with so much riding on their respective transactions were tense (though with Pylkkanen's armor of insouciance it is harder to see when he is perturbed.) Both lost some patience waiting for an expected bid that never materialized finally calling out the specialist's name in the vain hope a bid would materialize.

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Artelligence for May 14, 2018

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New Malaysian Prime Minister Re-Opens 1MDB Case: Malaysia’s politics have been upended by accusations of corruption surrounding the 1MDB development bank which was linked purchases of real estate, art and the financing of a Hollywood movie about the excesses of Wall St. Now the new Prime Minister is re-opening the case and we may end up learning a lot more about why so much money was spent on art. …

National Gallery of Canada Gets Anonymous Donor to Cover Break Up Fees on Chagall: Canada’s National Gallery narrowly avoided a scandal surrounding the misadventure of its Chagall sale. To recap, the Chagall was going to be sold at Christie’s to raise funds to buy an Old Master painting of Saint Jerome being sold by a Canadian church to fund refurbishments. The local government stopped the sale making the Chagall sale unnecessary. That left the National Gallery on the hook for some fees to Christie’s and the political climate was turning against the National Gallery, The Art Newspaper tells us:

  • The National Gallery’s board then decided to drop its plans to acquire Saint Jerome, and cancelled the sale of the Chagall painting, less than three weeks after the consignment was announced. This led members of Ottawa’s parliament to demand an explanation from the National Gallery of the management of its public funds, which nearly had to be used to pay a hefty fee to Christie’s for pulling the work from auction. …

The Royal Museums Greenwich Acquires Kehinde Wiley’s Ship of Fools: A recent work by Kehinde Wiley based upon Hieronymus Bosch’s Ship of Fools has been bought by a UK public collection.

  • Head of art and curator of the Queen’s House Christine Riding added: “I am a great admirer of Kehinde Wiley’s work and I am thrilled that the museum has acquired this powerful, complex and thought-provoking painting. Ship Of Fools deftly reworks and updates Bosch’s famous allegory to highlight major challenges and injustices today. I feel certain it will resonate with many people, whatever their age, heritage and background.” …

Charles Ray Works Very Slowly: The NY Times has a brief look at Charles Ray’s new show at Matthew Marks:

  • The five new pieces in the show represent a large portion of the work he has completed since his 2014-2015 retrospective, shown in Chicago, which may help explain why they cost between $2 million and $8 million each. For a major artist, Mr. Ray produces very little. “I work very slowly,” he said.

Even Galleries Dabble with the Blockchain Now

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There’s a been a great deal of controversy within the art trading community about the fate of smaller galleries. Much of the conversation takes on the tone of mis-directed arguments about income inequality. Others talk about structural changes to art’s peculiar retail environment (gallery going has declined.) A select few go to conferences and talk about innovation without offering much in the way of practical guidance.

Enid Tsui, in her round up of blockchain and art-related developments in art, finally has an example of a medium-sized gallery that is trying something different, an Initial Coin Offering.

Traditional art galleries are also setting up blockchain-enabled platforms as a way to raise capital. Whitestone Gallery, which moved its headquarters from Tokyo to Hong Kong in 2015, wants to raise 5 billion yen (US$46 million) through an initial coin offering (ICO) to fund its expansion.

In January, the 50-year-old gallery invited members of the public to buy its cryptocurrency, called WHS and initially priced at 1,000 yen a unit. The gallery has various plans for the funds raised: building an art trading and verification platform using cryptocurrencies and blockchain technology, and opening more bricks-and-mortar galleries in New York and London to promote Japanese artists abroad. Early investors have been promised dividends paid in WHS.

Chief executive Koei Shiraishi says the gallery has not yet achieved its fundraising target, and plans for public trading of WHS on cryptocurrency exchanges have been delayed because Asian governments have begun to enact laws to regulate the market.

Buying art with bitcoin, authenticating it with blockchain – art world cottons on to cryptocurrencies (South China Morning Post)

Malaysia’s 1MDB Probe Re-Opened After Surprise Election Defeat

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There was a shock election in Malaysia that brought a former leader, Mahathir, back to power. Much of the campaign centered around the conduct of Prime Minister Najib Razak who has been at the center of a multi-billion dollar scandal around the 1MDB development bank from which money seems to have been siphoned.

Mahathir moved quickly to prevent Najib from leaving the country and announced that he would re-open the 1MDB case which was being pursued by Switzerland, Singapore and the US. For the art market, the case has uncovered a number of paintings that were traded at exceptional prices several years ago, especially Jean-Michel Basquiat’s Head of a Madman (above):

Mahathir said he was instructing the auditor-general to remove any restrictions from the Official Secrets Act on publicizing the details of a report into 1MDB, and planned to replace the attorney-general, though he did not name a candidate for the role. The police would submit the report to him and he would study it, he said.

The U.S. Department of Justice claims billions were siphoned from 1MDB, which was set up in 2009 to support infrastructure projects. Najib faced allegations some of 1MDB’s money ended up in his personal accounts before an election in 2013. He acknowledged around $700 million appeared in his accounts but said it was a donation from the Saudi royal family and most of it was returned. He was cleared by the attorney-general of wrongdoing.

New Malaysian Leader Tightens Net Around Ousted Najib Over 1MDB (Bloomberg)

Cryptokitty Auction Makes $140,000 for Art + Blockchain Foundation

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A donated Cryptokitty being sold at auction at the Ethereal Summit in New York

Blockchain entrepreneurs and enthusiasts gathered at the Ethereal Summit in New York this weekend to talk through burgeoning blockchain technology based upon the Ethereum.

On Saturday night, Codex Protocol held a charity art auction to benefit its foundation for art & blockchain. The event was accessible through Live Auctioneers. The nine works offered were all unique digital works of art whose authenticity as the original or edition, as opposed to a digital copy, is protected by the blockchain.

There were several works sold for sums in the high four figures but the news of the evening was a record price paid—$140,000—for a cryptokitty.

Don’t know what that is? Well, it is a form of digital collectible similar to a beanie baby originally created to demonstrate the blockchain that has since burgeoned into its own craze.

Here’s an excerpt from Bloomberg’s take on the cryptokitty:

Entrepreneurs are already using blockchain to verify the authenticity of artworks. And according to Bryce Bladon, communications manager at Axiom Zen, crypto could help resurrect the digital art market, which collapsed when the internet made it possible to endlessly reproduce and distribute files. Digital art could regain value if ownership is recorded on distributed ledgers, he said.

“There are serious problems with art that the blockchain could solve,” said Bladon, whose company makes the popular blockchain game CryptoKitties. In CryptoKitties, players breed and trade virtual cats.

There are about 700,000 different digital kitties, some of which have sold for more than $100,000. Guilherme Twardowski, art director at CryptoKitties, calls the game “procedural art.”

Crypto Artists Unlock Value With Lambos, Kitties and Blood (Bloomberg)

Wynn’s Picasso Withdrawn from Christie’s Sale

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Katya Kazakina reported late on Sunday that Picasso’s Le Marin, a $70m painting featured in Christie’s Impressionist and Modern Evening sale had been damaged and, thus, withdrawn from the sale this week:

Christie’s withdrew “Le Marin,” a self-portrait painted in 1943, from its auction this Tuesday for restoration, it said in a statement. It declined to comment on the nature or extent of the damage.

Update: Christie’s had released on their website a statement on the matter earlier on Sunday:

Pablo Picasso’s Le Marin (The Sailor)was accidentally damaged Friday during the final stages of preparation for Christie’s May 12-15 exhibition. Two outside conservators have now been consulted and have made recommendations for the successful restoration of the painting. After consultation with the consignor today, the painting has been withdrawn from Christie’s May 15 sale to allow the restoration process to begin.

Christie’s has a very high standard of care for the objects entrusted to us and we have taken immediate measures to remedy the matter in partnership with our client. No further information is available at this time.

The last time this happened with a Picasso owned by Wynn, admittedly a very different painting, Le Rêve, at a very different time, the restored work ended up selling a few years later for more than his original asking price.

Further Update: The New York Times’s Scott Reyburn is reporting that another Picasso work owned by Wynn has also been withdrawn:

Christie’s has not divulged the precise nature of the damage to “Le Marin,” but following the mishap, the auction house said in an email that Picasso’s 1964 painting “Femme au chat assise dans un fauteuil” (“Woman With a Cat Seated in an Armchair”), estimated at $22 million to $28 million, has also been withdrawn from the sale. This second Picasso had also been identified as being offered by Mr. Wynn. Like “Le Marin,” it had been guaranteed to sell courtesy of a third party.

Pablo Picasso Painting, Valued at $70 Million, Is Damaged Before Sale  (The New York Times)

How’s This Season’s Contemporary Market Stacking Up?

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Our friends at Pi-eX have shared their charts for the New York Evening sales and we're happy to add a little narration for the AMMpro subscribers. Above the paywall, it's worth remarking that the pre-sale volume (excluding works with estimate upon request which is an increasing category) is down this year over 2017 but within a range that has remained fairly steady since 2015.

In other words, for all of the talk of "recovery" in the art market over the last year and a half, the Contemporary category has actually been restrained and substantially lower than the period from 2012 to 2015.

This is especially important when we turn to the issue of guarantees.

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Artelligence for May 11, 2018

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The Rockefeller Sale Comes in at $828m and counting: At the end of the week, the running total for the Rockefeller estate came in at $828m with the online sales continuing through Friday.

The $212k Picnic Basket: One of the crowd favorites in the Rockfeller personal effects was a very large picnic hamper that was being used as an end table in one of the family’s homes that turned out to contain an elaborate set of horn-handled cutlery and table settings, china and the world’s fanciest set of tupperware. The estimate for the item was $5-10k. It sold for $212,500. …

Margin Mix Headwinds at Sotheby’s: The Financial Times seems to have garbled some financial reporting from Sotheby’s. In their weekly column on the art market, we read that the biggest lots like the Modigliani or the Malevich coming up next week are raising the specter of lower returns: “Such high-octane sales have raised the perennial issue of “margin mix headwind”, the rather uncatchy catchphrase among Wall Street’s investment community to describe how major works eat into profits at the auction houses.” A quick Google search of the term yields no results of that particular phrase which makes it hard to credit as “catchphrase.”

A quick look at the earnings call script from Sotheby’s Q1 report last week, which is referenced later in the item, reveals that Sotheby’s falling commission margin was a product not of an increase in very big deals but a calendar change in the Hong Kong auctions which brought the big Saturday night sale into Q1 for 2018:

  • “With respect to our Auction Commission Margin, for the quarter we reported 17.3% against 18.0% last year, and for the six month period, 17.1% against 18.0% last year. The inclusion of the big Hong Kong evening sales in this year’s numbers explains most of this change. We also saw a modest impact from our guarantee hedging strategy which has the effect of moderating our margin when expressed in percentage terms. However, this strategy is clearly important to our overall profit levels and it brings the additional benefit of offering more predictability to our earnings as well.” …

Seeing Reds: Robert Mnuchin got the idea for a show of Modern masterpieces around the theme of the color red while watching John Logan’s play about Mark Rothko and the painting of the Seagram’s murals that now reside in the Tate in London. The show includes a stunning red Rothko along with interesting and rarely seen museum properties by Willem de Kooning, Franz Kline, Ad Reinhardt Francis Bacon, Louise Bourgeois, Glenn Ligon, Wade Guyton, Alexander Calder, John Chamberlain, Cady Noland and Kazuo Shiraga. …

Zao Wou-ki Makes $862,000 at Freeman’s in Philadelphia:  “a three-panel painting by Zao Wou-Ki, “15.04.80 – Triptych,” which sold for $862,000, after a prolonged and intense bidding war between two phone bidders. A small-scale work painted in the delicate colors of spring, the piece bears a dedication to the original, and only owners to date, Ambassador Arthur Hartman & Mrs. Donna Hartman.”

A Tale of Two Gris

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Rockefeller Juan Gris, left, $31.8m; YSL, Juan Gris, €3.8m

In making the New York Times’s case against the Rockefellers, their columnist adduces two works by Juan Gris and wonders why one sold for so much more than the other:

A telling case in point was Lot 2 in the Rockefeller auction. A fine 1914 Cubist still life of a violin on a table by the Spanish painter Juan Gris caused little excitement when it fell to a telephone bid of $31.8 million. In 2009, a similar, slightly smaller Gris still life of a violin, from 1913, sold at the Saint Laurent auction for 3.9 million euros, or $4.6 million at current exchange rates.

The question raises an interesting issue. In the grand scheme of the art market the YSL provenance may have a greater added value than even Rockefeller. His name was synonymous with global high society, culture and fashion. But the YSL sale did take place during the depths fo the global financial crisis. The fact that works sold at all was an achievement. That they sold so well was epochal.

After the sale, Josh Baer reported in his Baerfaxt that Acquavella purchased the Gris for an institution. One has to presume the institution was less interested in the Rockefeller provenance than it was in the work itself.

What if the Rockefellers Had Bought Pollock Instead of Porcelain?  (The New York Times)

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