The $12 Million Stuffed Shark

"The fact that there are a number of comparable works produced today like the spot paintings, actually works in the favour of sales, because it enables financiers and art advisors to make nice little charts which they can then show to their buyers/investors, or what you might call “specullectors”. I cite that in my book, and joking aside, I like the term. Or COINS, collectors only in name. When the financial services industry is looking to give advice on deploying investment capital, they want to be able to demonstrate, how are these spot paintings performing? What’s the track record, and how can you track their value in the marketplace? The fact that there are a number of works is actually a plus—and their value tends to increase with presence in museums. Collectors—or rather buyers—feel reassured if they know that of the five Balloon Dogs by Jeff Koons, there’s one with Eli Broad, one with François Pinault, and so on. Ironically, that is actually a reassurance for the purchaser, the fact that this is not in fact a completely a unique product. But it is topsy-turvy, because, of course, when a completely unique product comes on the market, such as Salvator Mundi, then the bidding goes sky high, much higher than I think anybody expected. Perhaps this was a classic instance of game theory, or more simply, as rumoured, a mistake. That that the two Arab bidders didn’t realize they were in fact up against that each other. “Whether we are talking about the impressionists, postwar and contemporary art sales, the highest prices are concentrated on just a few artists” The $12 Million Stuffed Shark talks about supply and demand. Supply is a critical question. It’s a market that has expanded out to countries which didn’t used to buy art. So there is more demand—no doubt about it. And that encourages more supply in the marketplace. However, in his book, Don Thompson does point out that most contemporary art will not be resalable at any price. There is a concentration on about 25 artists in the art market. Studies (which I cite in my book) have shown that whether we are talking about the impressionists, postwar and contemporary art sales, the highest prices are concentrated on just a few artists. So you do actually have classic supply and demand. You have a few billionaires chasing a very small number of pictures, and that’s pushing the prices up. If you start looking further down, if you start looking at the more volume end of the market, you will find that it’s not that strong. Well, you need to distinguish here between private museums that belong to a very rich person, a billionaire generally these days, and a state museum. In America, a museum like MOCA or LACMA is, in theory, a private museum, and they get their funding from donors on the whole, although they sometimes get it from the local municipality as well, so it’s not a hard and fast distinction, but it’s still worth considering who is behind a given institution. What has definitely driven the contemporary art market has been the phenomenal growth of private museums who all concentrate on the same contemporary art basically. It’s a segment of the art market where supply is available, and they will all want to tick the boxes in a sense. They all want to have a Damien Hirst, a Gilbert & George, because they want the reassurance that we spoke of before. Institutions do want big pieces; they do want spectacular pieces. If you look at Tate with their Turbine Hall installation—this is the sort of thing that brings people who might not otherwise visit. Whether it’s private or publicly funded, a museum has to bring people in. Just seeing the permanent collection is not necessarily going to bring people in, certainly not repeatedly, in ever increasing numbers. One of today’s problems is that publicly funded museums are in no way able to compete with private museums. Their acquisition budgets are tiny compared to the sort of money that can be spent by somebody like Eli Broad—Los Angeles’ most prominent art museum is called The Broad—who has huge amounts of money at his disposal. Or certain Chinese collectors. When you consider that Liu Yiqian and his Long museum could spend $170 million on a Modigliani, there’s simply no public institution that can compete. That represents years and years of an average museum’s acquisitions budget."