The secretive world of Contemporary Art is one of the only markets that continues to grow in tough times. The Journal investigates, ‘Will it ever stop and who are the people behind the market?’
Everyone knows that the prices for Contemporary Art over the last 10 years have rocketed. To be precise the Contemporary art sold at Sotherby’s between 2003 and 2007 had a 600% increase from £218 million worth sold in 2003 to £1.3 Billion sold in 2007. ‘Art Piece database’ put the average rise in Contemporary Art between 2003-2008 at 800%.
Is this due to Contemporary Art being more available? Well as a matter of fact, no. Hiscox put the increase in value between 2006-2007 at 55% for Contemporary art and only 7.6% for Old Masters. Logic dictates that when there is less of something the price increases. However, it is clear that the demand for Contemporary Art far outweighs the demand for the Old Masters. The question is, who and what are the reasons for this?
Looking at art today, it seems the general population have become more interested in art. It has been said in Britain today that more people go to art galleries than football matches.
It appears the secretive world of Contemporary Art is dictated by a select group of individuals who control the market; these include collectors, dealers and gallery owners.
The collectors come from various industries, such as Hedge Fund millionaires, Investment Bankers, Oligarchs, Media Moguls, dot com billionaires and so on. They include individuals like Jose Magrabi and his son Alberto, who are said to own over 800 Andy Warhols (and own 9% of Warhols in the world) and then you have Alberto Magrabi’s business partner, Aby Rosen who owns a further 1% of the worlds Warhols. In the Commodities Markets there are Laws that stop individuals owning too much of one thing. For example in the 1990’s a Japenese Trader who worked for the Sumitomo Corporation was prosecuted for owning about 5% of the worlds copper supply. However, in the Art market it is acceptable to own 10% of one artist’s oeuvre.
These Collectors have not only been accused of price setting (where they up the price at auction and pay way over the guide price), they have also been accused of protecting prices. What’s more, many of them openly admit it! They support their actions on the grounds that they are promoting an Artist, and in many ways they are. However, you have to ask how much would the Artists paintings be worth without them and if this isn’t controlling the market, then what is?
The Art market seems immune from the rest of the world. During the financial meltdown, an auction for Gerhard Richter and Joan Mitchell broke the artists records and beat the pre sale estimates by $45.5 million dollars. That same morning, Standard & Poors 500 index dropped 3.7 percent. This is the reason why so many successful businessmen are diversifying their portfolios in to Contemporary art.
The thing is, it’s all too easy to blame the individuals with money, however, the truth is there are other’s involved. The gallery owners, curators, agents, business managers, auction houses and dealers all take a large amount of responsibility in the rise of an Artist. There are prominent people who nearly come under all of the above: Larry Gagosian, Jay Jopling, Steve Lazarides and Mollie Dent-Brocklehurst.
Larry Gagosian is known as the biggest and most successful dealer in the world. Over the last 30 years he has built up a network of 11 galleries worldwide from New York to Moscow, and is said to have had sales of $1 Billion Dollars annually. He has cultivated top-notch clients like Charles Saatchi (Saatchi & Saatchi) Si Newhouse (Conde Nast boss) and David Geffen (media mogul who owned two of the world’s top ten most expensive paintings).
He Brokered the deal between Geffen and Steven Cohen, the founder and manager of SCA Capital Partners, for the sale of Geffen’s de Kooning painting ‘women III’ for $137.5 million. You can’t find Gagosian on the Forbes list, as it is hard to estimate his wealth, but don’t let that fool you. One thing is for sure he lives a lifestyle on par with his Billionaire clients. He has a fondness for Armani suits, keeps fit by swimming in his Manhattan townhouse pool, has homes in The Hamptons, Los Angeles and St Barts. He also flies to these properties in a $40 million dollar Bombardier Private Jet taking along his personal chef. Just an Art dealer? Think again.
Then we move to the UK, where the sociable Old Etonian, Jay Jopling, has helped establish London as the international centre for Contemporary art. In 1984, Jopling moved to London and started working with the young artists of his generation, most notably Damien Hirst. In May 1993, he opened the white cube gallery in the most traditional art-dealing street in London, Duke Street. A bold move, which went against the grain, as the street was known for its traditional art dealing.
Jopling’s appeal isn’t just that he represents some of the most prominent artists. More that that, he symbolizes style. Highly sociable he has been photographed at all the top events, firstly with his former wife Sam Taylor-Wood, and now with none other than Lily Allen. His presence alone is enough to validate the ‘now-ness’ of any event. This quality is something that collectors buy in to.
Another Brit, similar to Jopling in many ways, is Steve Lazarides. Lazarides has taken over The Old Vic Tunnels for two consecutive years. In his last exhibition ‘Minotaur’, he incorporated a deeply disconcerting maze featuring a sonic installation by Thom Yorke. Yorke’s mesmerizing installation appeared as a large-scale mesmerizing abstract film, reflected in a pool of water. Then there were two sculptures made from what appeared to be dead rats. Lastly there was graphic footage of bullfighting shown on loop in a cinema. On top of all that, for food, there was a lavish secret ‘pop-up’ restaurant by German restaurateurs Pret A Dinner.
Then you have Mollie Dent-Brocklehurst, who with Dasha Zhukova (the very beautiful partner of Russian billionaire Roman Abramovic) has launched The Garage Center for Contemporary Culture in Moscow. As well as this, the IRIS Foundation, whose founder is Dasha Zhukova, allows her to pursue and execute art projects all over the world.
What these dealers, gallery owners, curators, agents, business managers, call them what you like, all have in common, is they are responsible for creating the stories behind the artists and their works. They give the collector something to buy into. They sell art not just according to the collector’s desires, but also as an investment. Unquestionably, these artists have talent, but one has to question if their sculptures and painting are really worth the price paid.
There is no doubting that Art is a big business, but what has been created over the last decade by a select group of individuals, is known as the ‘Great Contemporary Art Bubble’. The question is, will or can this bubble burst, and if so, when?