The bubble has burst for the art world. But on the plus side, there has never been a better time to become a collector.
Author Howard Halle Illustration David Hughes
CALL IT THE LAST HURRAH OF ECONOMIC excess: On September 15, 2008, the same day the Dow slid 504 points on news of the collapse of Lehmann Brothers, Sotheby’s in London opened a two-night sale of new works by Damien Hirst, the bad boy of British contemporary art. With typical audacity, Hirst was bringing his work—223 pieces in all—to market without the usual dealer middleman, the first time an artist had ever attempted such a feat. Art world heavies thronged the showroom for the occasion, and the mood in the typically staid locale was almost giddy, hitting a crescendo with the first major sale of the evening: The Kingdom, a diminutive version of Hirst’s signature formaldehyde shark-in-a-tank.
The hammer came down on price of 9.5 million pounds. By the end of the sale’s second night, Hirst had collected $200 million. Maybe, attendees whispered, the art market would defy the laws of economic gravity after all.
No such luck. These days, the action in the high-end art world is about as lively as that poor shark. In November, reports surfaced that the Museum of Contemporary Art in Los Angeles was facing financial collapse and might have to be absorbed by the larger Los Angeles County Museum of Art. Then came word that Brandeis University, facing budgetary shortfalls of its own, is considering selling off some of its collection of postwar American Art from the Rose Museum. And at the February round of contemporary auctions in London, sales were down a whopping 75 percent from the previous year. “Unhappily, we’re going to lose a lot of the galleries that have sprung up in the last decade,” notes Thea Westreich, principal of Thea Westreich Art Advisory Services, a leading consulting firm in New York. The first great art boom of the 21st century is over.
In many respects, the art market has become a victim of the same sort of overvaluation that afflicted the money markets. Just as Wall Street had produced increasingly exotic financial instruments in which worth became more and more a matter of faith than of market fundamentals, the price of art billowed aloft on expectations that had little to do with aesthetic value. Young artists who had yet to develop a mature sensibility could find themselves courted while still in school. “They’d get swooped up and bought out, and then dumped, sold or held, depending on the word of mouth,” Westreich says. Sometimes these shooting-star careers would last all of six months, recalls Walter Robinson, editor of artnet magazine, before “everyone would forget them and look for the next thing.” Meanwhile, novelty was mistaken for formal innovation, and grand gestures—for example, Hirst’s infamous For the Love of God, a diamond-studded skull—became a substitute for carefully considered or powerfully intuitive work.
“The ratio of crap was quite high,” notes Gavin Brown, the straight-talking proprietor of Gavin Brown’s Enterprise, which represents such stars as the painter Elizabeth Peyton. “Artists got stupid around the money.”
Collectors, he might have added, did too.
All of which explains why, for those who still have a bit of disposable income, now is actually an ideal time to get into the market. “In terms of value, there are a lot of opportunities,” West-reich says. Adds Brown: “If you got the money, now is a fantastic time to buy.”
For newcomers, the art world is one of the toughest to penetrate. Collecting has always been, and will likely remain, an insider’s game. Although those hotel auctions advertised via late-night infomercials will always be happy to take your money, in the more rarefied realms, galleries will only sell work to qualified buyers—which means those with established reputations. Because, simply put, the more important the collector, the more valuable the artist’s work becomes.
Of course, every collector has to start somewhere. Which is why today’s troubled market offers such a unique opportunity. Gallerists—and the artists they represent—are feeling a little desperate.
“Dealers are far more available to the general public, and willing to converse about an artist, which is an opportunity to learn and make informed decisions,” Westreich says. Impress the dealer with your passion for the work, and you might just get a toe in the door.
As Brown notes bluntly, “Even if you were some Joe Schmo I wouldn’t have talked to six months ago, I’d be genuinely happy to see you. I’d be grateful.”
A bit of knowledge, gained by reading up on contemporary art, can help you establish a relationship with a gallerist. Robinson advises would-be collectors to cozy up to a young dealer who shares their aesthetic. “It’s really great to find one you like,” he says, “and then buy a lot of stuff.” The other avenue is to hire a consultant like Westreich, who not only steers clients toward work they love, but helps them navigate the tricky terrain of the art world.
While fine art has never been a sure bet for investors, canny collectors can do extremely well. Spot a young talent whose importance has yet to be established, and you can strike it rich. Westreich recalls a time in the mid-1980s when practically no one was buying Richard Prince pieces, and key works of his career, like his Marlboro Man Cowboys, could be had for $1,500. Today they are worth millions. Brown cites the example of Scottish painter Peter Doig, who’s works he sold for around $15,000 in 1994; in February 2007, one of Doig’s paintings fetched $10 million in a London auction. The path for both artists was paved by collectors who believed in the work, and were willing to take the risk of buying it.
A bit easier to penetrate is the so-called secondary market—where what a luxury car dealer might call “gently used” art is unloaded at auction. Works generally come up for sale because of what Walter Robinson labels the Three Ds: death, debt and divorce. Thanks to the decline in value of stocks and real estate, and financial scandals like the Bernie Madoff matter, these usual misfortunes have been greatly exacerbated. “There are a lot more motivated sellers out there now,” Robinson says. “For some people, artworks are the only liquid assets they have left.”
One further bright spot in the market’s otherwise Edvard Munch–like sky is that art itself may well get better. With little incentive to jump on passing bandwagons, artists might actually start following their own creative impulses. It’s already happening in China, for instance, which in the past decade produced a number of global art starts. According to Pearl Lam, owner of the Contrasts Gallery in Shanghai, a bout of aesthetic soul-searching is currently underway. She points out that most of the contemporary art from China that Westerners are familiar with—which tends to resemble Pop and Conceptual art—was in fact created specifically for export to the West. But in Mainland China, there’s been a whole other local collector base, favoring more traditional work, like ink-brush drawing. Among Chinese art-lovers, Lam reports, “People are actually quite happy about the recession. They are starting to say, Thank God we no longer have to make art for the market and just blindly follow Western taste.”
Westreich has noticed a similar shift occurring here. With things slowing down, “buyers are not just listening to the drumbeat,” she says, which means artists aren’t either, with the likely result that art will become more interesting and vital, if not necessarily more valuable. Downturns have often precipitated such transformations. The prosperity of the Kennedy years was reflected in the anodyne offerings of Warhol and Pop Art, whereas the economic malaise of the 1970s led to more radical genres, like body art and conceptualism. The same thing happened during the boom of the Reagan years and the 1987 bust, as Julian Schnabel’s smashed-plate paintings, for instance, gave way to more challenging work, like the performances of the brilliant Thai artist Rirkrit Tiravanija, who once created a soup kitchen in a New York gallery—a piece that seems more relevant every day.
Howard Halle is editor-at-large and chief art critic of Time Out New York.