The fireworks continue with today’s terrific guest post by Christina Apperson on BOOM: Mad Money, Mega Dealers, and the Rise of Contemporary Art…
Is Jeff Koons’ “Rabbit” sculpture really worth $91 million?
Michael Shnayerson’s BOOM: Mad Money, Mega Dealers and the Rise of Contemporary Art makes answering that question for yourself much more deliciously complicated.
Shnayerson himself has a delicious backstory, as a longtime contributing editor of Vanity Fair and second husband to the “queen of New York’s nouvelle society,” (Jessica Pressler’s wonderfully purple description of Gayfryd Steinberg, not mine). BOOM traces the history of the contemporary art world, its artists, its megadealers and its economics in exquisitely dishy detail.
The story begins in 1939 with a young heiress and art collector, Peggy Guggenheim, who began buying a painting a day in Paris from artists alarmed by the looming Nazi threat. She quietly moved her collection to the south of France and then to the US, always with the low thrum of occupying German forces in the background. In 1942 she rented an exhibition space at 30 West 57th Street and called it the Art of This Century gallery.
She exhibited Surrealist, Cubist and Abstract art and showed a promising, if troubled, young American artist named Jackson Pollock. The gallery garnered critical acclaim but Peggy, weary of sitting in the gallery all day, was ready to relocate to post-War Venice. So Peggy lunched with friend Betty Parsons, encouraging her to take over the care and feeding of “her” artists. Parsons obliged, but only took on the ill-tempered, alcoholic, and, worst of all, unsold Pollock after some very hard bargaining. Pollock’s fate was decided over a salad. And thus, quietly, post-War art was born and nurtured by two women with New York as its epicenter. The early symbiosis of gallery owner and artist was established.
A mere decade later, Guggenheim was “thunderstruck” – as she put it – to return to America and witness sales of the now-canonical Abstract Expressionists (or “AbEx” – a phrase begging to be thrown around at cocktail parties and gallery openings, if I’ve ever heard one) like Willem deKooning fetching $150,000 within hours. She wrote:
The entire art movement has become an enormous business venture. Only a few persons really care for paintings. The rest buy them from snobbishness or to avoid taxation, presenting pictures to museums and being allowed to keep them until their death, a way of having their cake and eating it. Prices were unheard of. People only buy what is most expensive having no faith in anything else. Some buy merely for investment, placing pictures in storage without even seeing them, phoning their gallery every day for the latest quotation, as though they were waiting to sell stock.”
Today’s markets would blow her skirt up AND set her Alexander Calder earrings askew.
When the gavel fell at Christie’s in November 2017, the record was set for the most expensive painting in the world: Leonardo da Vinci’s Salvator Mundi (Savior of the World). The bill of $450 million went to Saudi Prince Bader bin Abdullah bin Mohammed bin Farhan al-Saud (an ally of the Crown Prince Mohammed bin Salman, much in the news lately himself for his “wet work” of a much more unsavory sort. Like journalist Jamal Khashoggi, Salvator Mundi has gone missing, too. More here, if you’re interested: www.vanityfair.com/style/2019/01/the-mystery-of-salvator-mundi).
With megamillions come megapersonalities. And Shnayerson impeccably catalogs and footnotes the rise and demise of countless artists, collectors and dealers. Four megadealers have emerged in the international art market. But the megalodon among the megadealers is Larry Gagosian. Schnayerson traces our anti-hero’s humble beginnings as a high school swimmer who took six years to graduate from UCLA with a BA in English. He had a divorce decree before a diploma. At age 30, after a series of retail jobs in LA, he was working as a parking lot attendant when he noticed a man selling posters and thought maybe he could do that. He started selling posters of big-eyed kitties with balls of yarn and quickly learned the profit was in the framing. The “schlock” (his term) poster producer also produced fine art prints, and Gagosian found his true passions – art and the art of the deal. His many critics and rivals would contend the two do not necessarily fall in that order. Gagosian, 70ish, is the contemporary art market’s dominant force and inarguably the world’s most powerful art dealer, with mega galleries in eleven countries and an estimated income of over a billion a year. His aggressive, bare-knuckle tactics raise eyebrows even among colleagues in one of the planet’s most rough and tumble, least regulated markets.
Shnayerson’s account of the art market’s evolution is riveting. He brings to life the historic Scull Auction – the 1973 sale of some 50 pieces from NYC taxi magnate Robert Scull’s contemporary collection (Twombly, Warhol, Rauschenberg and Kline), which brought in a record $2,242,900. The evening included a Scull-generated media circus, price-propping by Scull’s dealer Castelli, and a cadre of the era’s hottest artists. The dramatic highlight of the evening was an angry confrontation between Scull and the artist Robert Rauschenberg after Rauschenberg’s painting, sold to Scull in 1959 for $900, resold that night for $85,000 but yielded no profit for the artist. In addition to solidifying the canon of contemporary art that night, Scull’s auction permanently set the metric of art valuation: the price fetched at auction.
Schnayerson notes the shift away from Guggenheim’s and Parson’s symbiotic artist/dealer approach as prices climbed. Dealers poached artists. New York long remained the epicenter of contemporary art, but early dealer Leo Castelli would send paintings to Gagosian’s outpost in LA to develop new markets, splitting commissions. In the late 70’s, Gagosian would pioneer what few contemporary dealers were doing – aggressively chasing the secondary market. “Go-go,” a hated nickname, would cadge invitations to collectors’ homes and memorize their collections. He would then call other collectors who might want to buy them and pester them to name a price they would be willing to pay. He’d then go back to the (unwilling) seller and hound them to sell. “He would call twenty times, without fail,” one collector relates.
But it was Jeffrey Deitch who ushered in a new era in art commodification. He saw that art would have to be analyzed rigorously for a whole new generation of collectors who could use it as an investment vehicle. An early partnership by Citi and Sotheby’s adopted his plan for an art advisory program, allowing art to be purchased as a long term asset, part of an intergenerational, diversified portfolio.
The 90’s recession hit the art world with ferocity, forcing previously unimagined partnerships between rivals and the development of new markets. Large dealers looked to estates as the new frontier. The dealer Aquavella took on the dealer Pierre Matisse’s estate that had been hopelessly mired in a tax dispute, making it ineligible for auction. It included canvases by Miro, Giacometti and Chagall. Aquavella then entered into a 50/50 partnership with Sotheby’s at a price of roughly $150 million. Worried that certain lesser pieces wouldn’t sell, Aquavella sold the paintings in inseparable, non-negotiable groupings. The estate yielded sales of $300 million in 18 months. As valuations skyrocketed, it became increasingly clear that museums could no longer afford to purchase. The hard lines between dealers and museums gradually melted away, too.
With the burst of the dot-com bubble in 2000, art became perceived as a better investment than stocks. Several banks with high net-worth client divisions jumped in, making loans against art, earning fee income for the bank and forging relationships with dealers and collectors. Dealers became bankers in a sense, too, making interest free loans to collectors, sometimes enlisting them as partners in pricey purchases. Art advisories cropped up to counsel collectors on what to do with their art and how to invest once sold. With the purchase of Christie’s Auction House by Francois Pinault (Salma Hayek’s father-in-law), auction houses expanded their footprint into primary sales and, later, art advisory. Over time individual artworks became less important than an artist’s “brand.” Dealers, auction houses, investors and the artists themselves cooperated to prop up prices. Truly, in this unregulated market, the only limits on the deal structures were the limits of the parties’ imaginations. By the time the 2008 crash occurred, the art market had become global and was largely insulated from the worst of the carnage.
Shnayerson rewards his stalwart readers with nuggets near the end of the book. There is the quiet acknowledgement that purchasing art through private dealers is the easiest way to launder vast sums of money. Here is a popular new transaction among certain London real estate developers: one purchases a mediocre painting for 200,000 and augments documents to reflect a 1,200,000 purchase price. One then purchases insurance based on the inflated price and secures a loan using the painting’s documented value as collateral. And perhaps one does that with ten works. And with that, one builds a building.
Ethical dealers, however, apparently regard such transactions as both criminal and bone-headed. There is a completely legal way to maximize an art investment by minimizing taxes due: placing art in “free ports.” Huge, fenced compounds contain warehouses filled with art, usually at airports. The largest are in Geneva, Zurich, Beijing and Hong Kong. A collector may suspend all taxes due on the art stored there – no sales tax, no capital gains. Additionally, no sales tax is due if a collector sells a work stored in free port to a buyer within the free port. Of course, no owner could enjoy their artwork, but that was soon solved. Once featureless warehouses, free ports now have viewing rooms. Too far to travel? No problem. There is now a free port in Harlem. Still too far? How about enjoying an illuminated .pdf of your art?
While the economics and transactions are fascinating – these are artists! So are the bon mots tucked in to the wondrously readable art history and market analysis. Robert Rauschenburg, Jasper Johns and Cy Twombly formed a love triangle in 1951 at North Carolina’s Black Mountain College. Madonna, on the brink of fame, drove Gagosian and her boyfriend Jean-Michel Basquiat through LA traffic.
The uber-ambitious artist/tycoon Murakami (you know him – his candy hued logos and Japanese cartoon “super flat” images were emblazoned across Louis Vuitton purses in the early aughts) left the dealer who discovered/created him, Marianne Boesky (yes, Ivan’s daughter, but without a penny of the billions that led to Dad’s orange jumpsuit), for rival dealer Gagosian. Boesky remembers Murakami saying to her, “You’re lactating. You can’t be my business partner.” (Murakami is henceforth dead to me!) Sculptor Franz West’s menage a trois with his 25 years-younger wife and a writer resulted in two children of unknown paternity. And an equally… fraught… and heavily litigated €50m deathbed foundation when West and his wife died early. Truly, plenty of satisfying scandal and legal intrigue for everyone contained within these pages.
I’m usually a bit hesitant to pick up a book about art or music or wine for the same reason I tend to avoid magazines on yoga or running. It can be challenging for a writer to do the subject full justice. No worries here. In this case the exhaustive research and the storytelling and the art itself all amplify one another. BOOM resonates on so many levels, mixing first-rate scholarship and research on art and artists with economic history and analysis and pure insider gossipy goodness. Contemporary art insider Don Thompson, who wrote The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art, praises the book lavishly, saying his work would have been better had BOOM existed first.
Those who know art will find this a rollicking, fast-paced read. For fellow contemporary art neophytes, however, this book is actually probably better sipped than gulped. It makes ideal nightstand reading, with your Eyebobs blue-blocker glasses on, of course, so you can indulge the temptation to google the artworks, artists and dealers so vividly described in Shnayerson’s pages. And if you’re prone to obsession (occasionally guilty, here) or particularly enjoy “context” (also a fancy gallery term for how multiple artists within a single space interact with and reflect upon one another), consider reading it while watching HBO’s “The Price of Everything,” a 2018 documentary on the same topic.
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Bacon Interview with Christina Apperson…
Hi Christina! Thank you so much for stopping in at Bacon today! It’s been a while. I’m so happy to share your winning personality and excellent writing with the Bacon community again!
You are a gracious, graceful and elegant woman. Soft spoken, often. Smooth, always. A gentle spirit in many ways. But also – you like a fast car. Especially when you are behind the wheel…
I do! I fear the need for speed is a genetically based shortcoming that has been indulged by a similarly afflicted husband who loves fast cars as much as I do.
Also – you like a deep dive! Underwater. When did you start scuba diving? What do you love about that?
Oh, dear. A pattern is emerging here. Mike and I started diving about 5 years ago and it honestly is one of the best things we’ve ever done. It allows us to travel to truly beautiful destinations and scuba divers, for the most part, are a pretty capable (by necessity) and engaging crowd. We’ve met some of our most beloved friends this way. Scuba diving just peels away the pretense and there is this instant esprit d’corps. You’re sitting in a dive boat in the midst of sea and sky, wet hair, no make-up, no jewelry, wearing goofy gear and fins and everything just feels so elemental and…free. Visually, nothing land-based has come close, for us, to the exotic beauty and wonder found underwater. And you know that dream of flying you had as a kid? It feels exactly like that. With fish. And coral.
I think it’s terrific that you’re experimenting with the urban life in Nashville this summer! You and your husband Mike recently bought and renovated a condo in the 1212, right?
Yes, we’ve moved into the 1212 and love it. We’ve decided we could never be solely urbanites but we are relishing the novelty of it. We are embracing being Nashville tourists and highly recommend it for long-time Nashvilleans, too. There is Just So Much – the brash splash of Broadway, so many great restaurants within walking distance, Cheekwood’s beautiful gardens and… The Frist! Five minutes away!
What’s been most exciting about that process?
I won’t say I crave novelty but…
Laughing! What’s been the most challenging or unusual thing that’s happened?
We have fallen in love with Bird rental scooters!
You might be in the minority, dear Christina. But I love your honesty!
You and Mike are keeping your lakefront home in Raleigh, with its pool, rose garden and koi pond. There, you enjoy something in between country living and suburban life. What enticed you to try urban living in Nashville?
Mike took a job as CEO of a company based in Franklin, which has some similarity to Cary, NC, a town close to our house. We thought it would be a grand adventure to try urban living, and we have been enjoying its relative simplicity, for sure! Honestly, when M is turning around a company, he is consumed by work. It’s nice to have a lower-maintenance launch pad with proximity to downtown and the airport.
Have you found a favorite spot to eat yet? Or a spot to drink?
Oh, gosh, that’s a tough one. I think the real joy is in the search. Ask me in about a year? It might take that long to try everything worth trying here. It is a foodie’s paradise! We did walk to Tansuo the other night, which was quite good. Mike declared it the best Peking Duck he’s had outside of Asia, but you do need to call ahead to order it. Truthfully, our favorite place for a cocktail is our 21st floor balcony at night. It’s pretty hard to beat.
Have you always had an adventurous spirit – or is it something you’ve grown into?
Again, I think this might be in the DNA. My great-grandmother, an orphan, emigrated on her own from Sweden in the 1910’s. My grandmother was on the board of a California agricultural cooperative in the 1940’s. Mom was the first woman to graduate with a masters in ag economics from the University of California at Davis and moved to Washington, DC in the mid-60’s by herself at the age of 22 to take a job as a CIA analyst. I’ve been extremely fortunate to be raised in a family where women doing adventurous or courageous things is the norm. And I’ve been absolutely blessed to find my husband, Mike, the love of my life, who not only accepts it but encourages it.
What do you like best about yourself?
I am pretty adaptable.
What do you like least about yourself?
I will never, ever, ever be a linear thinker. And I am in a constant pitched battle against the clock. (It is possible my love for a fast car was also partially born out of necessity.)
What do you practice at?
Patience! Patience! Patience!
What do you absolutely refuse to do?
Cold-weather sports. Cave diving. Placing my feet on the dashboard of a car.
What do you wish for?
Life is pretty fantastic right now. It honestly would be selfish to wish for more. I am getting more comfortable with the notion that when God grants you grace, you shouldn’t apologize for it or feel unworthy – you should accept it for the miracle it is. And share it.
Bonus question: What is the meaning of life?
Goodness, that’s a big one! With a significant birthday looming, I have been thinking a lot lately about legacy – a related issue – but haven’t reached any conclusions worth articulating yet. I think perhaps we are only rewarded with the answer to your question once we cross the finish line. Meanwhile, I guess I’ll just try to do the best I can and assume everyone else is, too.
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