Only the contemporary art market, with its replenishable supply of new works of art, operates a two-tier trading system: a primary market of galleries representing artists who consign fresh product to them, and a secondary market comprising auction and other dealers, who handle the same works of art when they are offered for resale by their original owners.
In the past, a clearly defined set of rules governed the activities of both operations but, in the last five years, those traditional boundaries have been blurred as auction moves ever closer to being a primary market in itself. Artists such as Jeff Koons, Robert Gober, David Hammons and Maurizio Cattelan are querying an exclusive gallery relationship and will recognise that the commission structure in auction, just one half or less of what would be a gallery’s charges for looking after their business, might be appealing. In retrospect, the appointment of Tobias Meyer as head of the contemporary art department at Sotheby’s New York may be seen as the defining moment in this constantly shifting situation.
Was it instinct which persuaded Tobias Meyer, constructing his inaugural Contemporary Art Part I catalogue to be offered at Sotheby’s New York on 6 May 1997, to abandon a chronological convention and displace more expensive Abstract Expressionism in favour of a consignment of recent and new works of art being sold under forced circumstances by the Boston Children’s Heart Foundation (The Art Newspaper, No.70, May 1997, p.37)? Or was it a clever conjuring trick designed to conceal the weakness of his own event which looked particularly thin in the lucrative field of Pop art where rival Christie’s had bagged a handsome spread of fine examples?
Whatever the reason, Mr Meyer proved in that first nervous evening on the rostrum that there was a market willing to pay retail prices and above for speculative works by younger artists previously untested at auction, artists such as Matthew Barney, Kiki Smith or Rachel Whiteread. Her “Untitled double amber bed” (lot 8) was valued at $30,000-40,000 and might have been worth $90,000 with Luhring Augustine, her New York dealers, but fetched $167,500.
Mr Meyer’s gamble broke the mold and, simultaneously, the control which galleries expected to exercise over the resale of their artists’ recent production; or, in the case of Felix Gonzalez-Torres, the work of an entire career which had been framed within a contract requiring collectors to reoffer unwanted material to the artist’s agent, New York dealer Andrea Rosen, for first refusal. Within 12 months, auction would challenge that contract and show that it could not be enforced.
The consequence of Mr Meyer’s initiative includes a formidable list of developments and innovations far beyond the house’s less than convincing attempt to muscle into the primary market through the acquisition of New York dealer André Emmerich in 1996 (The Art Newspaper, No.61, July 1996, p.29); or the subsequent but equally unhappy relationship with leading New York adviser and taste-maker Jeffrey Deitch, both of which failed to produce the dividends which Sotheby’s had hoped and the trade had feared.
The momentum was supplied by Christie’s London which, for a sale of contemporary art scheduled for 28 April 1998, experimented with a new date in the calendar, a new and distinctive catalogue design and, most importantly, a new off-site exhibition venue, a warehouse in Clerkenwell where works by Mario Merz, Felix Gonzalez-Torres, Andres Serrano, Damien Hirst, Gary Hume, Chris Ofili, Sarah Lucas and Rachel Whiteread could be displayed in an environment more appropriate than the Great Rooms of St James’s.
Phillips New York followed suit in November 2001 and rented a handsome space on the fringe of Chelsea for its most recent catalogue of contemporary art (The Art Newspaper, No.120, December 2001, p.62). Today an auction house preview has become a curated exhibition.
One event, above all others, sealed the auction houses’ encroachment on the dealers’ turf: the disposal of 130 lots of 90s art offered by Charles Saatchi through Christie’s London on 8 December 1998. The 97 artists involved in this consignment included Cindy Sherman, Damien Hirst, Rachel Whiteread and several other names with a recently proven track record in auction, but the majority of the participants were scarcely known outside the collector’s own exhibition programme and there was a sense of betrayal in the market as dealers perceived his plan to be disruptive, irresponsible and potentially damaging to their own business.
But the sale itself turned out to be a triumphant vindication of Saatchi’s marketing strategy and benefited the trade as much as the consignor himself. At a stroke, artists whose only worth was the word of the dealer offering the work were now seen to have a genuine secondary market valuation in excess—in the case of Janine Antoni, Gary Hume, Sarah Lucas, Ron Mueck, Hiroshi Sugimoto and other artists—of current gallery prices.
One collector anxious to make his mark on that occasion was Dimitri Daskalopoulos who, bidding by telephone, acquired works by Langlands & Bell, Chris Ofili, Cornelia Parker and Kiki Smith as well as Damien Hirst’s “The lovers (spontaneous, committed, detached, compromising)” for which he paid £139,000, the second highest price of the afternoon.
Christie’s was prepared to disclose Mr Daskalopoulos’s identity, thereby giving a fascinating insight into the market’s operations and explaining in the process why some collectors lose patience with a primary supplier and turn, instead, to the secondary sources.
Mr Daskalopoulos had attempted, but failed, to purchase works of art directly from the London trade because, Christie’s reasoned, his intentions were unknown and, in those circumstances, he could not expect to be offered important works by fashionable artists ahead of established collectors. But were he to emerge with prizes from the competition for Saatchi material, his reputation would be confirmed and dealers would be grateful to count him as a client.
Other collectors missing an opportunity to acquire a new painting from an artist’s dealer might have expected to find consolation in the field of contemporary photography which tends to published in small editions. But ironically, the wider circulation of such material through an international network of galleries has enhanced, rather than diminished, the demand for certain images and it is not unusual to find that artists such as Cindy Sherman, Andreas Gursky, Thomas Struth, Thomas Demand, Nan Goldin, Sam Taylor-Wood and Hiroshi Sugimoto command an immediate and substantial premium in the secondary market; it might be described as the familiarity factor. To what extent the primary dealers manipulate this situation to their own advantage by holding back a part of an edition as prices rise is unproven but the gallery backroom is an unregulated trading floor and buying for stock an established practice. A dramatic example of the familiarity factor concerns “Michael Jackson and Bubbles”, an editioned sculpture by Jeff Koons for which the Astrup Fearnley Museum of Modern Art, Oslo, paid the remarkable price of $5.62 million in Contemporary Art Part I at Sotheby’s New York on 15 May 2001 (The Art Newspaper, No.115, June 2001, pp.65-67). That two further and identical casts of this sculpture exist should, in a logical market, have diluted its appeal but, in fact, this contributed to the object’s status as an icon of our times. The catalogue cleverly exploited this situation by identifying the owners of the other versions as the San Francisco Museum of Modern Art and leading Greek collector Dakis Joannou. “To join such an attractive family warrants a premium” is the clever marketing message and, probably, the truth.
Originally appeared in The Art Newspaper as 'Breaking the Mould'