Art History: BVA 312 - 12/10/2019 (Annotation for Essay 2)
Money laundering in the art world.
The benefit of art auction
The rise of art auction
How does globalization help with the increase of art market in auction house?
- Financial Crisis
- Money laundering
- Opening market in other part of the world exp: Asia (Singapore, China, Japan, India, Malaysia), Europe.
** Guarantee system is a flip maker in the art market business.
Why people is getting more and more attracted towards the art market?
The difference of Sotheby and Christies.
In the video, they talked about the Christie has more sales than Sotheby.
Giving great deals to the buyer without earning a penny or
-Consignment
The formula for selling a million-dollar work of art
Reputation of the artist + Status of the dealer + Status of the intended purchaser + Size of the work
- Damien Hirst took 223 pieces of artwork to Sotheby in the 2008. (I need to find out what has happened in the 2008.) His work was marketed by a famous dealer, Charles Saatchi.)
- Strong market value, high demand.
- Book: The curious economics of contemporary art by Don Thompson. [The bigger the work, generally the more expensive it is. But, the biggest variable is the reputation of the artist. If an artist is new in the market, that individual will have to rely heavily on the dealer’s reputation.]
- Price are all hidden, this allows dealer to negotiate a value that will higher the value and worth of an artwork. Sell less for more.
Mechanisms of Auction Houses. A Guideline for understanding auctions and the art market.
- How the value of an art flips overtime.
A lecture by Jeffrey Boloten, Course Leader for the Art & Business Program at Sotheby’s Institute.
Top 3 global art market in 2016:
(Best to have a pie chart in my essay)
1) USA 40%
2) UK 21%
3) China 20%
What is “Primary Markets” and “Secondary Markets”? (Very transparent as no one talks about the actual sales)
Primary: First being sold. Auction house or galleries representing sales for a living artist
Secondary: When an art work is being sold again.
Auction house: Target global market. Encourage globalization.
What does the seller gains: Global Audience and Global Marketing. Publicized globally. Access to Global intelligence. (Information and direct the sales more effectively along with their will recognized branding)
Buyer: Access. [Auction house is able to sell as long as your money reach the reqirement. Not like art market, they target specific buyer to maintain their status (popularity) towards artist]
2017 auction market
Older master’s supply is very minimal, doesn’t grow as much.
Impressionist, staying where it is. The ones that are out there is minimal as well.
Contemporary art. His grown a lot. Why?
2003 $218 million
2007 $1.3 billion
Increases 600%.
**2008 market falls.
Record of 2013
However, sprang back quickly. Jeff Koons’ Balloon Dog $8.4. Highest price offered by a contemporary artist. Francis Bacon’s Three studies of Lucien Freud. Highest price in history paid for a work of art auction.
**How quickly the Financial Crisis recover in the art market.
Vast majority of art is below $50 million. It’s just a small percentage that sale as a luxury item.
Auction house used to be a wholesaler. Only the pass 40/50 years this scheme changes. (Gallery protects the artist’s reputation)
Auction and artists (Pro and Con)
Pro/Con
- Reputation increases tremendously/ Art couldn’t be sold
- Example: Damian Hirst artist that directly promote art through auction house, art auction in 2008, Beautiful inside my head forever. 200 million worth of art sold. **Selling directly in auction house as a primary market (Sotheby).
- Example issue if artist directly sell art through Auction house. [Factors: Painting’s value is high, Adrian Ghenie produce small quantity of art. Low supply of “master piece”, as it doesn’t come out often from young artist. High number of Asian Collectors. [Why Asian suddenly became rich]
Artist: Auction house, Art Gallery, Art Museum, Art Fair, Collectors.
Consignment
The Black Box of Art Business.
Free port in Geneva, where valuable goods are all stored here and the biggest port ever established. None can track the work. Everything is confidential. Total privacy for special negotiation and auction. [Storing and restoring artwork, an art port established in many places.] All dealers thrive for information, to seek for the most updated news. Price is a very delicate matter in the art market, no usual that dealers expose the value as it will affect the final value.
Ridiculous profit made in the process of selling and buying. Margin were far too high. Katherine (Picaso’s Daugther) filed a law suit on the Seller (Yves Bouvier – President of natural lecoultre art dealer) of theft.
** Running away from tax by using their married name rather than their real name. Tax fraud, money laundering.
The art work painter and his model by Picasso to Katherine (Picaso’s Daugther) through a company in Panama which later the work was sent to the Geneva free port. [No mention of her name].
- Trafficking of cultural assets
Biggest art fair in the world in contemporary arts: Art Basel. [Four Days]
Where do come from:
Mostly from the Geneva Port room, near Art Basel.
Davide Nahmad – 300 Picasso, most powerful art dealer family in the art world.
**Nelly Nahmad Gallery, New York.
** International Art Centre. (Davide Nahmar, shareholder of the company)
Art Work that has been Lootted are stored at the Free port.
Works Cited
Art Basel. (2019, March 18). Art Market Talk| The Art MArket Now: A contemporary assessment . Retrieved from YouTube : https://www.youtube.com/watch?v=LalFrwAZhIU
Best Documentary . (2019, Febuary 01). The Black Box of the Art Business . Retrieved from YouTube : https://www.youtube.com/watch?v=5TSE2TcMduc
Bloomberg . (2015, June 23). Sotheby's, Christie's Art Auction Rivalry Heats Up . Retrieved from YouTube: https://www.youtube.com/watch?v=0Z3aKMtiClE
Garagemca. (2018, March 21). Mechanisms of Auction Houses. A guideline for understanding auctions and the art market. . Retrieved from YouTube : https://www.youtube.com/watch?v=XFilwKLZHkk
VOX. (2016, October 05). The Formula for selling a million dollar work of art . Retrieved from Youtube : https://www.youtube.com/watch?v=rCT-UL2M8Gc
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