Selling Contemporary Art: How to Navigate the Evolving Market

307 Pages·2015·4.79 MB·English

by  Edward Winkleman

Copyright © 2015 by Edward Winkleman
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TABLE OF CONTENTS
Introduction
Acknowledgements
Part I ◆ Recent Changes in the Contemporary Art Marketplace: Things Beyond Each
Dealer’s Control
CHAPTER 1 ◆ The Growing Globalization of the Contemporary Art Market
CHAPTER 2 ◆ The Rise of the Mega-Gallery
CHAPTER 3 ◆ The Rise of the Art Fair
CHAPTER 4 ◆ The Evolving Roles of the Private Collector
CHAPTER 5 ◆ The Mid-Level Gallery Squeeze
CHAPTER 6 ◆ Online Art Selling Channels Gain a Foothold
Part II ◆ New Roles and Challenges for Art Dealers: Factors Within Each Dealer’s Control
CHAPTER 7 ◆ The Post-Brick-and-Mortar Dealer
CHAPTER 8 ◆ The Evolution of Dealer Collaboration Models
CHAPTER 9 ◆ Dealers Starting Art Fairs
Part III ◆ Why Do Contracts Keep Coming Up? With M. Franklin Boyd, Esq.
CHAPTER 10 ◆ Consignment Agreements
CHAPTER 11 ◆ Representation Contracts
CHAPTER 12 ◆ Contract Considerations for New Forms of Art
CHAPTER 13 ◆ Sample Contract for a Dealer-Run Art Fair
CHAPTER 14 ◆ Contracts with Collectors
Conclusions
Appendixes
Notes
Index
INTRODUCTION
The Leo Castelli Model
I
n late 2008, just as I was finishing my book How to Start and Run a Commercial Art
Gallery, it felt like someone he had turned off the spigots of the contemporary art market
all at once. One day we were wheeling and dealing as normal, despite distant rumblings of a
worldwide economic meltdown, and seemingly the next day everyone stopped returning
phone calls or emails. People stopped going to the galleries as well. It all seemed so sudden,
at least for the generation of younger art dealers who, having opened their galleries in the
twenty-first century, had never known anything but boom times.
News of giant corporations and financial institutions going belly-up came on a regular
basis. Many of them had been good, steady collectors. If these masters of the universe
couldn’t navigate the economic turmoil, what chance did mom-and-pop-style galleries
stand? Smaller galleries in particular were nervous. Tales of 40 percent discounts being
offered by top-level galleries to close deals sent chills through the community. How could we
survive on that? Then the galleries started closing too. Not as many as people had predicted,
perhaps, but enough to make those dealers still open begin to search for new ways to
conduct business.
Many new models were floated and discussed, including that dealers should follow the
example set by fashion designers and merge under an umbrella corporation, such as the
luxury brands conglomerate LVMH. And while the advocates of such a model were
definitely onto something, they mistook the parallel as being between fashion designers and
art dealers, when it actually turned out to be between fashion designers and visual artists
themselves. Indeed, if the “Great Recession” (as the economic downturn has come to be
called) issued any bold new practices into the contemporary art market, the open marketing
of a visual artist by a conglomerate, or mega-gallery, as a “brand” would be high on the list.
What I mean by that specifically is the shift from marketing individual art objects based on
their quality to the marketing of any object made by a high-profile artist based on their name
and demand for their work.
Granted, a more subtle branding of artists themselves had been a conscious part of
marketing contemporary art for many decades, at least since 1960, when legendary art dealer
Leo Castelli (1907–1999) managed to sell a sculpture of two beer cans by his then rising star
artist Jasper Johns. But late 2008 saw a giant leap forward in a more direct approach to that
practice. In the years that followed, this more blatant branding of artists over artworks,
combined with an emphasis on expanding the power and even real estate of the
conglomerate, would impact nearly every aspect of the contemporary art market, including
how feasible it remained to run a gallery in what has become known as “The Leo Castelli
Model.”
In a nutshell, Mr. Castelli’s model was to discover the best artists he could, nurture their
careers, carefully guide their markets (especially by not pushing their prices too high too
quickly), all with the intention of growing old and successful together in a mutually
agreeable partnership. The specifics of this model include taking work on consignment
(rather than buying it and reselling it, as retailers do in most other industries) and paying
artists a percentage of any sales, typically in a 50/50 split; “representing” the artist such that
they were expected to only sell through the gallery in return for sustained promotion and
regularly scheduled exhibitions; and managing many of the more mundane aspects of their
career, including handling logistics for museum or other gallery exhibitions, archiving their
press and images of their work, and many other tasks artists would rather someone else free
them from doing so they could focus on creating their work.
Leo Castelli did not invent many of the strategies behind his unparalleled success at selling
contemporary art (and in reality, even he was not as consistent in such matters as legend has
it), but he optimized a series of “best practices” for art dealing in a way that was so admired
by artists and younger dealers alike that it unofficially became “the way it’s done.” The
cornerstone of the model was for mutual trust and loyalty between dealer and artist to guide
what was presumed to be a long-term relationship over the inevitable ups and downs of both
an art career and the economy’s cycles. Indeed, it was this presumption that artist and dealer
were not only a team, but that they would remain so for many years, that made an early
heavy investment by the art dealer in the relatively unknown artist more sensible from a
business point of view.
Again, even Leo Castelli didn’t follow those best practices to the letter, but by 2008, when
artist Damien Hirst, one of the biggest “brands” in the contemporary art world, cut out his
powerful New York and London galleries by bringing a huge body of his work direct to
auction, few could any longer claim the Castelli model was the only path to success. This
book is an attempt to summarize the changes in the contemporary art market since 2008,
with a particular focus on the challenges and innovations just now entering the market. It
explores a number of shifting factors, and is based on a wide range of interviews with
collectors, dealers, artists, fair organizers, and other art world entrepreneurs, with the
ultimate goal of helping anyone attempting to sell contemporary art strategize on how to
navigate the quickly evolving market.
Part I of this book is devoted to the major areas of change in the market over the past
decade or so that are outside any individual dealer’s control. Each chapter in Part I begins
with a summary of that change. Each chapter in Part I then explores the strategies that
galleries use, or might use, to more effectively navigate these areas of change.
Part II looks at specific areas of change that dealers themselves are initiating. In other
words, things that dealers are doing differently to respond to outside forces or simply evolve
with the times. Again, much of what is discussed in this part is likely to continue to evolve,
and so each chapter also attempts to synthesize the collective wisdom of the art sellers
interviewed in them to predict how these areas of change might play themselves out.
Part III of the book, co-authored by the art attorney (and my friend) M. Franklin Boyd,
Esq., reflects an opinion held by more and more dealers, as well as many collectors of
contemporary art: that as the market grows in size, the handshake way of doing business will
increasingly need to give way to contracts. Some of the basics behind these contracts are
discussed in my first book. New considerations in response to things that have changed since
that time are outlined in the chapters dealing with Representation and Consignment
contracts. Considerations not covered in the first book, such as contracts for new forms of art
that have or may come along, are then discussed in later chapters.
Throughout this book, my goal is to present as accurate a picture of the landscape as can
be described at this point, to share insights from art dealers from a wide range of
backgrounds and experience, and to then examine strategies for using that information to
the best advantage of dealers’ artists and their business. There is not very much discussion
about the needs of artists in this book. Rest assured, though, that every strategy discussed is
contextualized from the understanding of the fiduciary and ethical obligations to
representing artists’ best interests in everything a dealer does.
How quickly the market is evolving suggests that only the most fundamental of best
practices and insights revealed throughout this book will remain helpful. As I note in my first
book, though, there is no one-size-fits-all formula for selling contemporary art. Each
successful dealer reinvents the model to some degree. My hope here is simply to consolidate
the information and advice I can gather into one concise discussion of how the industry I
love seems to be moving forward into the twenty-first century.
WHY 2008?
Each chapter in Part I of this book examines “What has changed?” within the years from
2008 to 2014–early 2015. Many of the changes in the contemporary art market discussed in
this book were already well underway when I was writing How to Start and Run a
Commercial Art Gallery in 2008, but they had not yet fully revealed themselves to be as
significant as we recognize them to be today. As its title suggests, that book was conceived of
as a summary of the best practices the industry had developed up to that time in setting up
and running a “brick and mortar” gallery space. Even though it did touch upon many of the
issues we’ll look at more closely in this text, like art fairs, losing artists to other galleries, and
contracts, that book did so from within an assumption that the Leo Castelli model was still
the best way to run a contemporary art gallery. It remains a good way to run one, and many
great and successful galleries today still essentially follow it, but that model’s underlying
strategy (that is, a contemporary art dealer finds and invest in great emerging artists and then
together they work to grow old and successful together) is more challenging now due to the
way things have evolved since 2008. Forces beyond any single dealer’s control continue to
put pressure on that model, and so by looking closely at this particular window, between
2008 and 2014–2015, I hope to build upon the first book’s advice and share the strategies for
effectively navigating these changes.
NEW YORK-CENTRIC
Many of the people I interviewed for this book who live and predominantly work outside of
New York have told me how “New York-centric” some of my assumptions and questions
were. After several false starts at conceiving of the book from a more international
perspective, though, I eventually surrendered to this shortcoming. This book is written from
a New York-centric point of view. Given that I am attempting to discuss several issues within
what is considered an increasingly “global” art market, this failing on my part needs to be
acknowledged. But after giving it a great deal of thought, I have concluded that the market is
evolving so quickly at the moment that no book I can write could hope to be timely, detailed,
and globally comprehensive. By the time any such effort was researched and published, the
strategies discussed would most likely be pointlessly out of date. That may still end up being
the case by limiting my point of view to the city I know best, but I am at least more confident
of the conclusions drawn here than I could hope to be if attempting to cover the entire
planet. How helpful this ends up being to dealers outside New York may eventually depend
on how truly global the market and its practices have become. Because New York remains, at
least for the time being, the city with the strongest contemporary art market and is among
those with the most contemporary art galleries, though, I do hope what is recorded here will
be of interest to dealers in any location.
THE CALM AFTER THE STORM
It felt like it took me an extraordinary amount of time to make some final decisions on issues
in this book. Partly that’s because it contains much more subjective ideas than my first book
did, and partly that’s because, in an attempt to be timely, I repeatedly went back and revised
entire sections in response to some new study that just came out that contradicted all the
previously held conventional wisdom. The problem with that, as I eventually learned, was
there is some new study coming out in the art world every week almost, each seemingly
contradicting the previous conventional wisdom, only to see yet another emerge two weeks
after that, reinforcing the previously held conventional wisdom.
The week I turned in the manuscript for this book, the New York Times published a
review in which the critic described an event as creating a new turn “unlike anything I’d
experienced in over four decades in the New York art world.” My first thought was, “Oh
great . . . I’ll probably need to revise another eight chapters in response to that now.” It also
made me keenly aware, however, that many of the events that produced hyperbolic
headlines in the art press or led longtime observers to conclude everything was different
now, often seemed far less dramatic after a few weeks or months. If nothing else, the
contemporary art market is remarkably adaptable. Even with a once-in-a century recession,
followed a few years later by a once-in-a-century hurricane that did more damage to New
York galleries in one night than was previously imaginable, such near-existential threats
seem simply part of the landscape with a bit of distance. People go back to work. People
adapt.
That theme, that what seemed so dark and threatening at one point looked much more
manageable in the light of day, comes up a few times in the chapters that follow. It is difficult
when you are juggling so much change to always keep that perspective, and many things that
come up in the art market do require a swift and decisive response, but rarely is there so little
time that a bit of research and advice from other art market professionals is not possible first.
That is what I have tried to assemble in this book—not to alarm anyone, but simply to arm
dealers with the information that can help them make calm, considered decisions about the
next once-in-a-century event sure to shake things up again any moment now.
ACKNOWLEDGMENTS

A
t several points while writing this book I thought it might be easier to run away to a
South Pacific island and try my hand at fishing. The contemporary art market just kept
evolving, and conclusions I had based entire sections or even chapters on were suddenly
suspect, irrelevant, or simply wrong. I’ll grumble about that some more in the Conclusions,
but here I need to thank a few of the people who kept encouraging me to keep at it because
despite its (many) shortcomings, I wish something like this book had existed when I
launched my gallery. The openness of the other dealers, collectors, journalists, curators, fair
organizers, attorneys, and artists who are quoted within or who helped inform the ideas and
concerns discussed still impresses and humbles me.
Jimbo Blachly, Jennifer Dalton, Rory Donaldson, Yevgeniy Fiks, Ulrich Gebert, Gulnara
Kasmalieva and Muratbek Djumaliev, Leslie Thornton, Andy Yoder, Julie Evans, Janet
Biggs, Christopher K. Ho, Kate Gilmore, Chris Dorland, Ivin Ballen, Sarah Peters, Cathy
Beigen, Joy Garnett, Shane Hope, Christopher Johnson, Eve Sussman and Simon Lee,
William Powhida, Joe Fig, Thomas Lendvai, Alois Kronschläger, Nancy Baker, Rosemarie
Fiore, Jani Leinonen, Leslie Brack, Joanne Carson, Analia Segal, Doreen McCarthy, Gary
Petersen, Micah Harbon, Michael Waugh, and the irrepressible Amanda Church: you are
but a handful of the contemporary artists I have been honored to work with one way or
another over the years. I hope a heartfelt “thank you” here is not presumptuous. You all
continue to amaze me.
Alain Servais, Glenn Fuhrman, Mark Coetzee, Sylvain Levy, Michael Hoeh, Noel Kirnan,
Larry Rinkel, Laura Lee Brown and Steve Wilson, Alice Gray Stites, Marie Elena Angulo,
Henry Zarb, John and Amy Phelan, Raymond Learsy and Melva Bucksbaum, Ann and Lee
Fensterstock, Robert D. Bielecki, and the absolutely perfect Zoë and Joel Dictrow: each of
you and many more shared insights from the collector’s point of view that run through this
book. I am grateful for your time, your patronage of contemporary art, and for your kind
words and friendship. Christian Viveros-Faune, Dan Duray, Charlotte Burns, Jerry Saltz,
Roberta Smith, Holland Cotter, Peter Schjeldahl, Martha Schwendener, Ken Johnson, “The”
Georgina Adam, Anny Shaw, Julia Halperin, Gareth Harris, Paddy Johnson, Hrag Vartanian,
Christopher Knight, and countless other writers I read religiously (I know, it looks like I’m
sucking up for press here, but I’m sincere when admitting who I learn from): conversations
I’ve had with each of you or things you have written are reflected in nearly every chapter
here as well.