Art market

Hammering their prices: contemporary art dealers at last month’s fair in Switzerland pin their prices to art auction results

Art Basel ’98 fair report


The contemporary art market has undergone a radical transformation over the last three months (see The Art Newspaper, No. 82, June 1998, pp.52-53). What was once largely a dealers’ preserve, contemporary art has now entered into the salerooms on both sides of the Atlantic. Collectors are likely to emerge the winners both when buying and selling.

The starting point of this upheaval was the historic sale at Christie’s in London on 22 April, echoed by the sales in New York on 15 May and 3 June (see p. 36). If the Sotheby’s catalogue for their 2 July sale in London is anything to go by (it is a clone of their rival Christie’s catalogue), the trend is irreversible.

The contemporary art department at Christie’s prepared their April sale well in advance, contacting collectors to inform them of their new look: a re-vamped catalogue format; the enlarged exhibition space in a disused industrial building in Clerkenwell, East London; and the extension of the viewing period.

This produced two results: instead of half the items on sale coming from dealers and the other half from private vendors, the proportion from the latter rose to 85%, and most of the important pieces sold at twice the estimated price, achieving gallery prices. Private collectors were thus enabled to sell at top market sums (minus the auction house’s commission).

How did the dealers at the Basel fair respond to the challenge from the auction houses? As always, there is no single response; a series of solutions (or non-solutions) were put forward.

Despite Basel’s aim to be a contemporary art fair, only a small percentage of the works shown can be considered truly contemporary; most stands deal with established, twentieth-century art. This season, Christie’s recognised that in art market terminology “modern” and “contemporary” had grown middle-aged in reality, so they changed the chronology of the twentieth-century sales by limiting “contemporary” art to work produced during the last twenty years. This definitely helped to produce a better articulated and more logical catalogue. Like the Basel fair, Sotheby’s, on the other hand, has stuck to the traditional division.

The Basel fair is no longer the temporary museum that it used to be, and perhaps the most noticeable feature is that great masterpieces are nowhere to be seen. Until recently the big galleries were competing as to which could present the most brilliant works.

This year half the pieces have slumped in interest and have become quite conventional. The European and American economies are not in recession, and the auction houses are getting brilliant results—so what is the explanation?

The galleries know that the great disadvantage of an auction sale is its public nature; business is conducted in full view of everyone, while collectors like to be as discreet as possible.

A dealer can sell a painting at the top market price if its reputation is unblemished, i.e. if it comes directly from the artist or from a large and exclusive collection. As a result the standard of work shown at fairs (which like auctions are public events) inevitably declines each year; a fair is merely a meeting place where future transactions can be set up. The paintings on the walls are interesting but not exceptional.

Visitors this year had fun identifying paintings that figured in the recent auction catalogues in London and New York. Dealers made no reference to the salerooms. The results of the auction sales also meant that the dealers were present in lesser force than previously.

The recent auctions were dominated by Gerhard Richter, Baselitz, Polke, Hirst and Basquiat, all of them very prominent at Basel last year. With great good sense the dealers avoided their work this year. The prices obtained and the number of works presented at auction must certainly have satisfied demand for a long time to come.

Finally, and most importantly, as the table demonstrates, nearly all the dealers realised the advantage to be gained from the publicity given to Christie’s and Sotheby’s sales. They pinned their prices to comparable auction prices. In the long term it will certainly be difficult for galleries to acquire objects for reasonable sums; a collector will always be tempted to go to an auction sale first.

Dealers in contemporary art will stick to their true vocation, which is to promote directly the work of an artist, Christie’s and Sotheby’s having always refused to sell work directly from the artists; but from collectors and dealers

Originally appeared in The Art Newspaper as 'Hammering their prices'