Art Market Monitor

Global Coverage ~ Unique Analysis

Art Capital Group Expects 150% Rise in Loans

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Kelly Crow reveals the growing size of the art loan market in the Wall Street Journal:

Art Capital Group expects to dole out as much as $300 million worth of new art-backed loans this year, up from $120 million last year and $60 million five years ago. Citi Private Bank said its top clients also increased their borrowing against their collections to as much as $100 million last year, up from a typical maximum loan of $20 million a decade earlier.

The Art World’s Gordon Gekko (Wall Street Journal)

Executioner's Song: Leibovitz's Woes Continue

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Things are bad when you let Lawrence Schiller into your life. Just ask O.J. Simpson. Now Annie Leibovitz has Schiller hanging around, lending a hand marketing her “master set” of prints. The New York Times‘s Allen Salkin explains:

Through James Danziger, a gallery owner who had represented Ms. Leibovitz from 1990 to 2000, she has begun selling a limited-edition “Master Set” of 157 of her photographs. Only 10 sets are planned, and they are being offered for up to $3.5 million a set, although the prepublication price is lower, said Mr. Danziger in a phone interview from Miami. […] Lawrence Schiller, a writer, publisher and television producer who helped produce Ms. Leibovitz’s first book of photography in 1974, is also helping to market the master sets. He said three had already been sold. Mr. Schiller would not reveal what buyers paid, but said some of the prepublication sets were being offered for $2.5 million. Mr. Schiller said he had been helping Ms. Leibovitz take stock of her archives to determine how to use it to pay her debts, but in a measured fashion that would not suggest desperation.

Worse than having Schiller involved is the financial advice Leibovitz is receiving. The resolution of her deadline with Art Capital seems to have come at great cost by adding more debt to the already substantial pile:Continue Reading

Art Capital Group Negotiates with Goldman Sachs Through Bloomberg

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Katya Kazakina follows up on Andrew Goldman’s revelations in New York that Goldman Sachs wants out of its portion of the Annie Leibovitz loan that Art Capital Group holds. The Bloomberg reporter has ACG spokesman Montieth Illingworth on the record laying out terms for the deep-pocketed firm

“If Goldman Sachs wishes to purchase our interests in this loan, we invite a bid and wish them well in their future relationship with this borrower,” said Illingworth.Continue Reading

Aggressive Art Capital Group

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There don’t seem to be many heroes or innocent victim’s in the L’Affaire Leibovitz. New York Magazine story catalogues Art Capital Group’s own troubles with its hair-trigger legal strategy. In this case, the publicity involved seems to have spooked Goldman Sachs, the backer of the ACG’s loans:

Art Capital has treated borrowers aggressively in the past. In 2003, the company loaned $1.5 million to a wealthy young widow named Melanie Gill—who had inherited a large collection of museum-quality furniture—so she could buy a hotel and spa in New Orleans. After Gill missed one interest payment, Art Capital consigned her antiques to Christie’s and foreclosed on and sold her apartment. […]Continue Reading

NPR on Leibovitz Finance Troubles

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[intro]“She has risked something worth quite a lot of money–her entire artistic legacy–in order to get a loan.”[/intro]

A couple of days ago, NPR waded into the Annie Leibovitz financial car wreck with this story using the New York Times’s Allen Salkin as the expert and voice of the story. Salkin says the expenses of running her studio “seems to have run out of control.”

NPR on Leibovitz

Gawker Fingers Si in Leibovitz Loans

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[intro]Not $24 Million–but a Newhouse Loan Was Among Her Debts[/intro]

Newhouse & Leibovitz

Gawker‘s John Cook, a wizard with documents, ferrets out the facts on the amount of loans owe by Annie Leibovitz to Si Newhouse. Again, the question raised is whether Newhouse is calling in loans from other Conde Nast notables that haven’t resulted in headlines?

According to a December 2008 mortgage document dated the same day as the loan from Art Capital to Leibovitz, Art Capital took over $15.5 million worth of various mortgages on Leibovitz’s Greenwich Village and upstate New York homes. It was that $15.5 million worth of debt, one imagines, that drove Leibovitz into the arms of Art Capital.

Which is why it’s stunning to discover that she owed half of it to Condé Nast, which pays Leibovitz a reported $2 million a year to take pictures. […] In Leibovitz’s case, two of the loans she has taken out over the years were from a company called Rhinebeck Properties LLC which, according to this document that handed over Leibovitz’s debt to Art Capital, is based at Condé Nast’s famous 4 Times Square address. The document is signed by John Bellando, Condé Nast’s chief operating officer. Another person who’s benefited from a Rhinebeck Properties mortgage is Condé Nast editorial director Tom Wallace.

Rhinebeck Properties held two mortgages on Leibovitz’s homes: A December 2006 mortgage for $2.5 million on her Greenwich Village townhouses, and a November 2006 loan of $4.7 million on her home in Rhinebeck, N.Y. All told, when Leibovitz did her deal with Art Capital late last year, she owed Condé Nast a total of $6.9 million—nearly half of her $15.5 million in outstanding debts.

All of this raises some questions: If the debt on Leibovitz’s homes amounted to $15.5 million when she went to Art Capital, why did she seek $24 million from them?

Did Conde Nast Call In Its Sweetheart Loan to Annie Leibovitz? (Gawker)

The Creditor Who Pushed Annie

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[intro]Was it Si Newhouse Called in Her Loans?[/intro]

The big question is how and why Leibovitz needed to raise $24 million last year. Allen Salkin says Si Newhouse might have called in one of his famous real estate loans to a Conde Nast top performer like Leibovitz. How many others are raising cash at 4 Times Sq.?

Leibovitz Needs Better Advisors

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[intro]Another Story that Raises More Questions than it Answers[/intro]

Annie Leibovitz needs a better PR strategy. Let’s hope she does a better job picking her PR than she did with a financial adviser. Starr & Co. But so far the gambit is to point fingers at ACG but not explain how she got so far behind financially nor to give a sense of what her plan has been these last 14 months since she first got involved with ACG.

Leibovitz townhouseSince the news broke of her $24m loan from Art Capital Group, two questions have dominated the press coverage: why did she need so much money? and what was she thinking signing over everything for a short-term loan?

Allen Salkin in the New York Times tries to answer the first question. According to Salkin’s reporting–and its a shame to see anyone’s personal finances become a matter for public discussion–Leibovitz’s ill-fated renovations has put her in possession of around $6 million in West Village real estate in the form of three town houses. She lives and works in two and rents out one.

In addition, Salkin points to two lawsuits for $700,000 and a $1.4m tax lien (no, its not anything related to inheritance tax.)

None of this would explain how and why she got involved with Art Capital Group. Continue Reading

Understanding Leibovitz's ACG Deal

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Annie LeibovitzAs the details trickle out of the Annie Leibovitz battle with Art Capital Group, a couple of interesting patterns emerge. The first is the simple observation that two major artists have met their financial ruin in the quaqmire of West Village real estate. Though the Village remains a charming place to live, one wonders what magic allure has driven both Julian Schnabel and Annie Leibovitz to lose their fortunes over grandiose homes among cobblestone streets.

Second, it would appear that both sides in this battle have made a bad deal. Art Capital Group offers loans against collateral that greatly exceeds the value of the loan; but disposing of that collateral these days may be very difficult, especially with an uncooperative seller. The danger in doing business with a firm like ACG is that a short-term loan will end up becoming a flat out distressed sale.

Something like that seems to have happened  here as financial blogger Felix Salmon points out while quoting the complaint:Continue Reading

Leibovitz Won't Liquidate

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[intro] She Knew She Had to Sell But Won’t Cooperate; Where’d the Money Go? [/intro]

Josh Baer of the Baerfaxt set off a firestorm this morning when his subscription-only email detailed a court case between famed photographer Annie Leibovitz and Art Capital Group, the art financing firm. News of Leibovitz’s loans with ACG landed the company on the front page of the New York Times in February in a sign-of-the-times story.

Leibovitz’s bailout seems to have been a bit more complicated than was first reported. Bloomberg just posted some of the thin details available on the case. The Times’ own City Room blog is hard at work pumping out the details:

credit: Michael Gottschalk/Agence France-Presse–Getty ImagesAmong other demands in the suit, the company, Art Capital Group, based in Manhattan, is asking the court to order Ms. Leibovitz to allow real estate agents access to her town houses in Greenwich Village so the property can be appraised and prepared for sale to pay back the loans.

The suit charges that Ms. Leibovitz has engaged in “boldly deceptive conduct” and has failed to pay hundreds of thousands of dollars due under the agreement.Continue Reading

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