Visual Arts Management

Jeffrey Taylor

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781134852697
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

The arts sector is of vital importance to the global economy and students aspiring to a career in the visual arts are increasingly required to gain an understanding of the business side of the arts world. This textbook introduces the field of arts management with a focus on visual arts.

Visual Arts Management provides the first comprehensive textbook to the art business. The book covers the full range of the art world from contemporary galleries, secondary market, auction houses, art fairs, and museums. Topics include overviews of the distinct sectors of the business, but also delves in to technical topics: curatorship, antiques, cultural heritage compliance, marketing, art criticism, taxation, customs, insurance, transportation, appraising, conservation, and connoisseurship. Each chapter concludes with a real-world case study to provide cautionary tales of the dangers and pitfalls of the art business.

This unique textbook, authored by an experienced instructor, presents a global perspective on the rapidly developing art business in a way that is relevant for arts management classes and art professionals worldwide.

1 Primary Art Market

Two-agent model

A large part of the commerce in newly made art works goes on un-noticed, and essentially outside of the Primary Art Market. It happens through simple commissions between collectors and artists. In such case, it would be difficult to speak of there existing a market because neither seller nor buyer is a full-time professional merchant, and artworks are not allowed to ride a market of supply and demand until sold. This model only involves two agents, and almost invariably involves producing artworks with contracted features, and a pre-agreed price to be paid. For nearly the entire history of art, only this business model existed. It was how altarpieces and statues of monarchs were produced, and still exists widely, especially in the genres of painted portraits and large-scale public sculpture. This model of creating artworks derives from the ancient system of guild production, when the costs of materials and production might easily exceed 50 percent of the object’s final cost. Artists were treated as craftsmen and not expected to excessively concern themselves with expressing an aesthetic vision. Their concerns were more of quality, refinement, and attention to detail. Newer business models, such as open studio events, have helped revive this business model, allowing artists to deal directly with collectors and circumvent the market entirely.

Three-agent model: Production on speculation and the role of the dealer

The creation of a Primary Art Market based on the Three-agent model is closely linked to the wider development of early capitalism and proto-industrialization in the sixteenth and seventeenth centuries. The declining costs of production, such as the introduction of linen canvases, and the wider availability of certain pigments such as cochineal and ultramarine achieved through European imperialism, began to allow artists to make speculative ventures of painting canvases before any collector had ordered, or even expressed interest in such a work. A defining feature of early capitalism entails the specialization of the means of production, especially in breaking down what were formerly wholistic tasks, such as the guild-method of making a painting, which involved preparing a wooden support, grinding pigments, mixing pigments with binders, preparing brushes, painting the work, and finally framing the work. In the early modern period (1500–1789), we can observe specialization in all these separate tasks, all essential to the making of a painting: canvas and brush suppliers, paint-manufacturers, and framers, all of whom act as suppliers to the painters. As painters end up owing money to these suppliers, their creditors accept artworks in barter arrangements. In order to redeem the artwork for cash, the supplier begins to use the walls of their business as an improvised gallery of paintings for sale.

By the early nineteenth century, a new breed of dealer emerged from the book and print trade. These businesses sold books (used and new) as well as a vast collection of printed lithographs and engravings. They formed an international network of dealers in prints, some of which they printed themselves and others received on consignment from other firms. They also often carried other printed materials such as maps and sheet music. Original artworks, such as an oil on canvas painting, was more important as the source for serially produced lithographs, and if the lithographs sold well enough, then the painting might ultimately be sold for a good price as well. What was lacking in these early dealers was any long-term interest in the careers of their artists. They saw themselves as merchants of pictures, not of artists.

Salon versus gallery

For good reason, dealers did not see themselves as concerned with the careers of artists: in the nineteenth century careers were not made in galleries, they were made in the Salon. Painters did not aspire to sell their paintings through a dealer; they hoped to sell them at the Salon. By the middle of the century, nearly all Western capitals and major cities had a local version of the Salon, and these yearly events galvanized emerging art centers across the globe. Artists preferred the Salon system because there was a public triumph: medals and scholarships could be won, a painting could be selected for reproduction as a lithograph, and the sale of an artwork would be publicly announced. Furthermore, the organizers usually only took a 10–20 percent cut on the sale and paid promptly. The problem with the Salon system lay in its success: it attracted far too many artists by the end of the century, and increasingly more than half of all submissions were being rejected. Many disputes that arose at that time had to do with how Salon juries needed to be re-organized, with the electorate of such juries made more democratic. Nonetheless, no re-organization ever satisfied everyone, and as the Salons became more lenient, the viewing public simply found an ever greater morass of tightly-packed clashing styles, techniques, and themes.

The Salon system began to be supplanted by a new generation of dealers who took an entrepreneurial approach to building the careers of their artists. Paul Durand-Ruel pioneered this approach by supporting and promoting the artists of the Impressionist movement. The venture nearly led him to bankruptcy, but ultimately began to pay off in the 1890s when American and Russian collectors began to take an interest in the new movement. The model, he established would become the business model that would emerge as the dominant form in the twentieth century. This new type of dealer supported their artists financially, even when faced with a lack of sales to collectors. They would use their gallery primarily for solo exhibitions where artists experimenting with a new technique could show their vision in an adequate critical mass of works for the audience to “get it.”

By the middle of the twentieth century, the Salon system had largely been vanquished. To our modern mind, the idea that the market’s most precious asset, its wall-space, could be divided up by committee (the jury was essentially a committee), strikes us as quaint and also a recipe for never-ending disagreement. Modern art requires bold uncompromising vision, and the petty despotism of the sole-proprietor gallery offers a far more consolidated decision-making structure. Nonetheless, Salons provided an undeniably valuable public, large-scale art experience, which galleries do not offer. Therefore, the Salon system was revived in the 1970s in the form of Art Basel and the contemporary art fair. The key difference being that the nineteenth century Salon had a jury of artists who juried other artists. The twenty-first century art fair also has a jury, but it is a jury of dealers jurying other dealers.

Alpha galleries

At the pinnacle of the primary art market sit a handful of elite galleries, often referred to as Alpha galleries. These galleries occupy multiple locations: Gagosian has nine venues world-wide, and David Zwirner has seven. They have gallery locations that specialize in contemporary sales, and others that deal in secondary sales. Other galleries that are often referred to as Alpha would be White Cube, Thaddeus Ropac, Pace, and Hauser & Wirth. These galleries act almost as taste-makers in themselves, in that when they bring a new artist in to their stable, it is a sign of that artist having “made it.” The galleries work along many plat forms simultaneously. They stage mega installations (e.g., Gagosian’s Richard Serra 2011 and Zwirner’s Doug Wheeler and Yoyo Kusama shows) that act as essentially free museum-type art experiences. These kinds of exhibitions may not produce any obviously salable material but act as a statement of awesome ness by the gallery, and in fact museums often purchase the entire installation. These galleries also stage major retrospectives on canonical artists (Warhol, Giacometti) that also function as free museum shows, but where works can be discreetly purchased if a significant enough offer is made.

These galleries maintain a stable of usually 24–30 artists who are on exclusive contract with a stipend. Therefore, the gallery essentially pays the artist a regular salary (against sales) which is paid regardless of actual sales. Each artist usually gets a solo exhibition once in every two years. Furthermore, for many of their artists, the Alpha galleries maintain a print division that sells lower cost, numbered lithographs and silkscreens. These galleries may have over a 100 employees, including many specialists normally only found in museums, such as registrars. They occupy the most prominent and expensive locations at major art fairs and if they fail to attend, as Gagosian did not participate in the 2016 Armory Show, their absence is noted. Their business models are complex and reliant on many different sources of revenue: prints can provide steady modest income and investments in new artists can be subsidized by discreet high-profit private sales of Secondary Market masterpieces. The gallery may even refuse to sell a work to a willing buyer if they are not judged to be a collector worthy of having such a work.

Chelsea-type galleries

In the 1990s, the center migrated to Chelsea, an area in Manhattan’s Lower-West side between 10th and 11th avenues, and it continues to reign as New York’s dominant contemporary gallery district. Originally it was its low costs and highly functional warehouse archi tecture (complete with freight lifts and easy truck accessibility) that attracted dealers over from Soho. Now rents easily approach $10,000 per month for a modest-sized non-street-level gallery space. While many tenants have left or threatened to leave for lower cost locations in Brooklyn’s Bushwick or Queen’s Long Island City, no clear “Next Chelsea” has become apparent. Chelsea’s continued dominance is buoyed by inherent strengths that only seem to be growing stronger. The area’s gentrification and West-side building boom only brings in more well-heeled clientele, while the expanding High-Line and new Whitney Museum have truly turned the neighborhood in to a contemporary art amusement park, especially on Thursday evenings, when at least 30 galleries hold openings with free wine.

A typical Chelsea gallery occupies one of the upper floors of the industrial warehouse buildings that used to service the piers that stretched out in to the Hudson River. The prime street-front retail tends to be dominated by the Alpha caliber galleries. Most Chelsea galleries make use of the synergy of so many galleries all existing in a single building, and this pulls collectors and the general art audience up the stairs to the upper floors. With often three to five galleries per floor, visitors are drawn along in a sort of covered bazaar of contemporary art. Galleries in the same building also tend to coordinate their openings so that at least three to four are happening every Thursday evening.

The layout of these galleries tends to involve a high desk/counter toward the entrance where an intern can sit and monitor who comes in, though not actually greet anyone. The counter contains a guestbook, where people write comments and leave email addresses if they want to be on the gallery mailing list. Somewhere, in this area, will be a price sheet for the works on display. Prices are rarely posted on labels next to artworks. The gallery will have one main exhibition area which will generally be used for solo exhibitions. If the exhibition space can be divided in to two distinct units, then the gallery might have multiple simultaneous solo exhibitions. In addition to the exhibition areas, galleries will usually have a cramped storage area (possibly in the basement of the building) and an office. Ideally the office will be large enough for staging private viewings of artworks with important collectors. Sometimes, galleries will hold a smaller, less-desirable space in the same building and call it a “project” space. This can actually mean that space can be lent or rented out to third-party exhibitors, either artists or curators.

Chelsea-type galleries, such as the Alpha galleries, keep a stable of 18–24 artists who are represented by the gallery. In many cases, these contracts might be exclusive, but perhaps not world-wide exclusive, rather only for the New York market. More cash-rich galleries may be able to pay stipends, but most have straight-forward consignment arrangements, keeping anywhere from 40 to 60 percent of the sale price. The difference in percentages retained by the gallery, usually reflects power relations indicative of how much the dealer and artists believe they need each other. Other costs which are either met by the artist or absorbed by the gallery include, for example, the cost of framing or transportation of the artworks to the gallery. At any given time, the gallery may be holding one to three solo shows in their exhibition space, but will be working constantly to promote and sell all their represented artists through the back office, through visits with collectors in to the storage area. Furthermore, most of these galleries will participate in two to four art fairs a year, with the more established ones attending main fairs such as Art Basel Miami, and the less established ones attending satellite fairs.

The Chelsea-type galleries exist in all major art markets and, as opposed to those in New York, those in other cities are more likely to be fortunate enough to occupy prime street-front retail locations in their leading gallery district, such as London’s Mayfair or the Marais in Paris. What all these galleries have in common is a principal reliance on the sale of contemporary art as their primary source of revenue, and their business model emphasizes the building of artists’ careers through a series of solo exhibitions and art fair exposure. Although they may not have as much leverage as an Alpha gallery, a Chelsea-type gallery will also be greatly concerned over who is collecting their artists’ work. The stature of a private collection, and ideally public collection, that is, museum which buys an artists’ work, go a long way toward establishing canonical status and the super-values that go with such status. It is this long-term focus on the trajectory of their artists’ careers that defines the operation of these galleries.

Regional galleries

The alternative to running a Chelsea-type gallery for the sale of contemporary art would be the Regional gallery model. This model is far more numerous and widespread than the Chelsea model, and it is also generally much less expensive to operate. Regional galleries are frequently owned and operated by an artist who opened the business, in order to give themselves a place to exhibit and sell. They usually invite 5–10 other artists from the area to also exhibit there. Each exhibitor is given a designated location and they fill it with as much inventory as possible. The entire gallery uses a Salon-style hanging approach, and no space goes un-used. The gallery may also carry 3D pieces and sculpture on pedestals in the middle of the room and sell hand-made jewellery at the gallery’s reception desk.

The gallery is called Regional because it draws its artists from its region and also sells art that usually represents the region: its landscapes and familiar motifs. The difference between the Regional model and the Chelsea model has everything to do with the difference in the collector base. Chelsea-style galleries exist in very large art centers with a strong local collector base. Their exhibitions rotate because their collectors come back month after month and expect to see something different each time. A Regional gallery’s collector base is transient. Most Regional galleries exist in towns heavily dependent on a tourism economy, and tourists then make up a large part of the Regional gallery’s clientele. These collectors may only visit the gallery once, and so all the inventory must be available immediately, which is why it is hung Salon-style. Pieces on the wall largely do not move unless they are sold. Artists frequently become frustrated with the Regional model because they believe it does not give them enough focus to catapult them in to the upper levels of the art world, and the venue can feel more like a shop than a gallery. Nonetheless, in many markets the Regional model is the only one that can work because Chelsea-type galleries require far higher price-points in order to sustain that higher-cost model.

Other models for exhibiting and selling contemporary art

In addition to the Chelsea-type gallery model, a large variety of other business types also manage to sell contemporary art to collectors. Many of these types are essentially a two-agent model, with the artist dealing more or less directly with the client, with the exhibiting entity being more of a passive platform than active participant in the sale. Examples of these kinds of venues are public libraries, restaurants and cafes, open studio events, and local art fairs where artists can rent a stand. Small-scale Salons are still often organized on a regional basis with juries and large collective exhibitions of many artists’ work. In many cities, nonprofit art centers function in similar ways to that of Chelsea-type galleries in that they stage solo and group exhibitions, and the artworks are very much for sale, with the venue keeping a percentage of the sale (usually around 10–30 percent). Furthermore, the largest network of nonprofit exhibition spaces exists on university campuses. Although these galleries and museums generally have a noncommercial profile, exhibits serve to build careers and collectors can always make inquiries about works on display.

Other methods by which new artworks enter the hands of collectors can come through a raffle or charity auction process. These methods often occur with smaller value works and graphics, which are used as fund-raisers for nonprofit galleries and small museums and art centers. An artis...