October 12, 2007
As wealthy collectors descend on London for this year’s contemporary art jamboree, our correspondent asks whether this booming and decadent market is cruising for a fall
In answer to the question, is the bottom about to fall out of the contemporary art market, Richard Feigen, the 77-year-old veteran New York art dealer, a man who has spent most of his professional life handling Picassos, Van Goghs and Beckmans – a man of formidable reputation and immaculate taste, a man with an eye – tells the story of how he was almost trampled in the mud by the occupants of a platoon of shiny BMWs in London last year.
The incident occurred in driving rain at the well-guarded entrance to Frieze, which, since its inauguration in 2003, has evolved into perhaps the most important contemporary art fair in the world. Out of the BMWs galloped the collectors – hedge-fund managers, oil magnates, pop stars, models, actors, CEOs, upstarts, wannabes: a convulsion of new money – “a stampede,” says Feigen, “being lead by these art advisers and curators. They’re like Sherpas with their air of invincibility and priority. I was almost physically crushed.
“Anyway, I went inside and deliberately picked out five of what I considered the worst pieces of work; the most putrid garbage there – and of course they are all going for thousands of pounds. Every single one of them had already been sold.”
Feigen goes against the received wisdom of the day when he opines that “a lot of it [contemporary art] isn’t even art”, that “Jeff Koons and Damien Hirst have no place in the history of art”, and that “the market is governed by people buying with their ears, not with their eyes”, and (most sacreligious of all for those with a stake in this market) that “a lot of assets are overvalued . . . just as I wouldn’t like to be the developer of a $10 million condominium in Chelsea, I wouldn’t like to be the proprietor of a $30 million Andy Warhol or Damien Hirst because I would feel very, very vulnerable.”
In enlightened circles, such views have come to be considered not just controversial and disloyal but erroneous – they bring to mind Norman Tebbit emerging in 1997 from the Royal Academy’s Sensation exhibition, asking: “Have they all gone stark raving mad?” With hindsight, the joke is on Tebbit for having been mad enough not to have invested in Hirst’s shark in formaldehyde, which Charles Saatchi went on to sell to the hedge-fund billionaire Steve Cohen for $8 million (£3.9 million) in 2004.
The old debate over what constitutes art is, in a sense, irrelevant. Feigen talks about the “mafia” of the contemporary art world “who will claim that because you don’t like what they do, you don’t understand art”. Another dealer, who wishes to remain anonymous, says: “These people with money have no taste and no confidence. They need an old Etonian – Jay Jopling – or an old family – Mollie Dent-Brocklehurst [who hosts a regular contemporary art fair at her family seat, Sudeley Castle] to give them the confidence they need. If you look at Jay’s client list, they’re a flashy lot.
“Look at what’s going on at the Serpentine Gallery. Matthew Barney – Björk’s husband – is touted as perhaps our greatest new artist. His work involves springing up on a trampoline in a harness, making marks on the wall with a pencil. It is hilarious.”
In case, dear readers, you are unfashionable enough not to know what is going on under your noses in the capital this week, here is a rough outline. Unprecedentedly rich, glamorous people from all over the world have descended on London to main-line canapés and chain-drink champagne in the week-long conga-line of parties, dinners and private views that surround three highlights of the international contemporary art calendar. Riding on their coat-tails are the aforementioned curators and advisers, as well as the speculators who believe that art now constitutes an “asset class”.
The Frieze Fair is flanked by the smaller, less expensive but increasingly well thought-of Zoo art fair and the feverishly anticipated auctions of contemporary art at Christie’s, Phillips and Sotheby’s this weekend, the results of which, since the galleries are so opaque, remains the only accurate means of measuring the market’s temperature.
“October 13 at five o’clock is judgment time,” says Kenny Schachter, a trader-turned-dealer, who also has his doubts about the long-term viability of some contemporary art. “Markets always go in cycles and there’s no market in the world that only goes up – look at the subsequent reassessment of Millais. People in the art world are so fickle. I can say with absolute conviction that there will be a downturn or an upset. It is a very mature market. It could be in six months, two months, a year.”
Figures published this year by ArtTactic, an art consultancy, hint at a slowdown: “Our May survey indicated a change in attitude. Despite our confidence indicator remaining high, about 25 per cent of respondents moved into the ‘neutral’ position from ‘positive’ at the last reading in November 2006, showing that people were increasingly becoming uncomfortable with the high valuations.”
Until such a time, the partying and prolific spending goes on. If you had been driving past the Ritz on Tuesday evening you would have seen a long queue of men and women in black-tie, waiting patiently to get into the White Cube party. At the Decadence, Decay and Demimonde party on Wednesday night, 250 guests watched a historical reenactment of Cora Pearl’s party piece in which she would be brought in to dinner as the dessert course, naked, covered in cream and borne aloft by “Nubian slaves” on a silver salver.
“It’s just a frenzy,” says Tot Taylor, co-director of the Riflemaker Gallery. “It’s turning into what the record business was like in the Eighties.” For his part, Taylor is pleased to be showing his artists’ works in Sotheby’s toilets for a week. “Gavin Turk will have his piss paintings in there,” he says. “They are an homage to Jackson Pollock, who used to urinate on all his paintings because he didn’t like his dealers.”
When people say that the art marketis booming, what they mean is that the postwar and contemporary art market is booming. Since Sensation spurred even Myra Hindley to write a letter of complaint to the Royal Academy about Marcus Harvey’s portrait Myra, created from the handprints of children in 1997, Young British Artists in particular have collided with an era of new money from all over the globe.
Some examples of the exponential growth: a Peter Doig painting costs £450,000 in July 2005 and is sold at auction for £1.2 million the next year; the Hong Kong collector Joseph Lau pays £9.19 million for a Warhol Mao painting; an auction of Russian art at Sotheby’s is cancelled because the billionaire Alisher Usmanov has made a successful preemptive bid for the entire £20 million collection. It is thought that he paid more.
One well-known collector said: “We’ve been eclipsed by these people who have limitless money but no idea about art. Artists like Richard Prince and the Leipzig School have been massively overhyped. There is a herd mentality among people who weren’t around in the Nineties when Japanese money fled and the market went into a tail-spin. The insides of the auction houses have started to remind me of casinos – art has become monetised. But it is frightened money. If all of a sudden two or three lots fail to get sold, it wouldn’t take much for people to decide that some of this stuff is no longer a repository for serious money.”
Philip Hoffman, who left Christie’s as finance director to set up the Fine Art Fund, the first art hedge fund, is more optimistic – but clears about his priorities: “Our focus is purely profit. Passion doesn’t come into it. I have bought a piece for £70,000 which we sold for £300,000 two and a half years later, and I loathe it.”
But behind some gallery doors there is discomfort at the way business can be conducted. Earlier this year Hirst’s diamond-encrusted skull, For the Love of God, was sold to a consortium for an alleged £50 million. Who was behind the deal? Hirst, it was alleged, was a member of the consortium. The Art Newspaper quoted unnamed trade sources saying that the skull’s price had fallen to £38 million during earlier negotiations as Hirst struggled to sell the piece. The artist’s business manager, Frank Dunphy, categorically denied this claim. Cristina Ruiz, editor of The Art Newspaper, said: “When works of art are sold privately it is extremely difficult to verify the price paid. Dealers and artists naturally have an interest in publicising the highest figures discussed in negotiations.”
We know that the money changed hands only because Hirst’s gallerists, White Cube, told us so. The buyer allegedly paid in cash. Kenny Schachter says: “Unless you see the paperwork, nothing is as it seems.”
But Nicolai Frahm, a contemporary art consultant, insists that Hirst’s skull was a stroke of genius: “It is quite humorous; it shows what is happening in art and culture – the whole bling culture.” Of the alleged sale, he adds: “It was brilliant. Whether or not it sold, it completely screwed up the market. What it did was make everything else seem cheap. After that skull came on sale, one of his cabinets was sold at Sotheby’s for £20 million.”
Frahm believes that the market will remain robust, if only because it is so tightly controlled by the dealers and their entourages. Curiously, he insists that this maintains the integrity of the artworks. It is considered bad taste to resell art for profit at auction – a sin for which collectors can be ostracised by dealers.
“Let’s say there is an exhibition by Jeff Koons: all those pieces will go to a major collector like Pinaud. For the top pieces it is a closed shop – that’s why you need somebody else to do it for you. It really freaks people out that the hot artist they want to get their hands on is inaccessible to them.”
As Frieze and Zoo open their doors, how will collectors know who to trust, let alone decide whether an artist will stand the test of a market crash? For example, you don’t hear that much about Julian Schnabel these days, even though he was a star before the last art crash in the 1990s, which took an enormous toll on the value of his work. The situation is different now, says Hoffman: “I have clients from all over the world spending huge amounts, they are completely oblivious to the credit crunch. In the long term the art market is a one-way street.” He points to the 540 per cent annual return that his company recently made on a single artwork.
On the other hand, Michael Moses, an art economist at New York University’s Stern School of Business, gives warning: “Remember that from 1990, postcontemporary art lost 60 per cent of its value. I hope the optimists are correct, but what people are saying about the contemporary art world today is what they were saying about the Nasdaq in 1999, a year before it crashed.”
Feigen is more certain still: “I believe it will happen, sooner or later. It smacks of confection. It wouldn’t take very much to scare off the serious money.”
‘I daren’t wear my best dress’
A visit to the Frieze art fair is like strolling on the art village green at its annual fête. It has a carnival atmosphere but I no longer wear my best dress or I risk being pecked to death by Botoxed, designer-bag ladies. Even in mufti I find moving about difficult as I bump into someone every 10 metres. Nicholas Serota and the gallerist Nicholas Logsdail dispense fleeting eye contact and a perfunctory wave without breaking stride. Serious connections and money are there to be made, but I prefer to wander through the MDF souk and give myself up to chance meetings. Some are pure pleasure, such as with jovial Paul Hedge of Hales Gallery. Some are fun, like being interviewed by Wendy Jones for Resonance FM. Some are protifable. A Scandinavian collector wants a snap of us together next to the sculpture of mine he has just bought; and some are upsetting – a disgruntled artist rants in my face wanting redress for some slight I dealt him. I self-medicate with VIP champagne and chat to the charming Pierre de Weck of Deutsche Bank, the fair’s sponsor. It’s all so cosy in an international billionaire meets elitist intellectual way.
Grayson Perry
