The Art Collector's Handbook
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The Art Collector's Handbook

The Definitive Guide to Acquiring and Owning Art

Mary Rozell

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eBook - ePub

The Art Collector's Handbook

The Definitive Guide to Acquiring and Owning Art

Mary Rozell

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About This Book

With the rapid and unprecedented global expansion of the art market, new collectors are emerging every day. This new edition of Mary Rozell's definitive handbook is required reading for new and experienced collectors alike, as well as anyone aspiring to a professional career within today's art market. Fully revised since its first publication in 2014 to reflect the many changes which have taken place in the art market, in art law, and in the practice of collecting, it now includes a completely new chapter on private museums. Mary Rozell draws on her long experience as an art collection professional and an art lawyer to illuminate some of the myriad issues that arise when owning an art collection. Covering acquisition, inventory management, the insurance, security, storage and conservation of collections, art financing and investing, and the sharing and deaccessioning of artworks, this meticulously researched but accessible book is an essential guide to the fascinating business of collecting.

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Information

Year
2020
ISBN
9781848224025
Topic
Art
Edition
1

PART ONE

COLLECTION BUILDING

1

ACQUISITION

Acquiring art—whether from a dealer, through an auction house, directly from an artist or through some other method—is at the heart of collecting. Some acquisitions are made after years of searching for an object, while others are purchased on a whim. Either way, or depending upon the stakes, the process can be nerve-wracking or immensely satisfying. Usually, it is both.
Knowing from whom to buy what and at what price is a skill in itself, one that can be developed over time. While most art collectors do not collect solely for investment purposes, the majority will at least want to know how price relates to value and whether they are investing their money wisely. They will want to purchase something that will gain value over time—or at least not lose value.
Today, there are infinite opportunities to buy art. With globalization and digital platforms, the art business is now an international, transitory affair. Not only do many galleries now have multiple branches in other cities (at last count Gagosian Gallery had 17 worldwide locations, from New York and Beverly Hills to Athens and Rome), a huge portion of art transactions are happening at art fairs, temporary gallery trade shows which span five to 12 days and take place in ever more cities around the globe. Auction houses, too, have expanded their reach, with Christie’s and Sotheby’s, both originally founded in London, now offering sales in far-flung venues such as Beijing and Dubai, as well as further broadening their businesses through private treaty sales and selling exhibitions. Online possibilities for viewing and buying art continue to grow.

MARKETS, SOURCES, APPROACHES

What to Collect?

Art collecting is deeply personal, a reflection of the self. It is not surprising, then, that individuals take different approaches towards building a collection. Some begin with a particular theme or interest in mind: a certain movement, historical period, medium, geographical area, or a combination thereof which leads to a succession of discoveries and connections. Others seek to chronicle or preserve the production of a specific era or culture.
Motivated by an ardent interest in his own Mexican culture, the painter Diego Rivera (1886–1957) amassed some 60,000 examples of pre-Hispanic pieces, now exhibited in Mexico City’s Anahuacalli Museum which the artist himself designed. Recording artists Kasseem “Swizz Beatz” Dean and his wife Alicia Keys founded The Dean Collection consisting primarily of African American artists such as Kehinde Wiley (b.1977) and Mickalene Thomas (b.1971) in order to own, celebrate, and promote their own culture. Still others buy work without any intended focus at all, acquiring individual pieces simply on the basis of what appeals to them visually or taps into their desire at a particular moment. As collector Jesse Price said when discussing how her eclectic collection was put together, “We just assume nothing has any relationship to anything.”1
The American collector Ronald Lauder bought his first work of art, a drawing by Egon Schiele (1890–1918), at the age of 14 with his bar mitzvah money.2 This was the beginning of a lifelong collecting passion for German and Austrian art and, eventually, the founding of a museum in New York devoted to this genre. At the same time, Mr Lauder has indulged his rather disparate interests in medieval art and armor, French and Italian design from the 1920s to the 1950s, and works by modern masters such as Paul CĂ©zanne, Pablo Picasso, and Constantin Brancusi, demonstrating how individual collecting often takes different avenues.
Tastes and interests evolve as well. One international couple began acquiring classic paintings of ice-skating scenes by Dutch masters in homage to their adopted home in the Netherlands, but eventually shifted their collecting focus to avant-garde contemporary art.
Some collectors concentrate on blue-chip works while others are inspired by emerging artists—younger artists who are not yet established in their careers and whose prices are usually lowest. In the 1990s, the collector Charles Saatchi famously collected the work of emerging British artists fresh from Goldsmiths art school in London, almost single-handedly catapulting this edgy group—which would come to be known as the Young British Artists (YBAs)—into bona fide international art stardom. Other collections are at least partially defined by budget and other constraints. The storied American collecting pair Herbert and Dorothy Vogel, he a postal clerk and she a librarian at New York’s Brooklyn Public Library, presciently purchased a wide array of works by artists in whom they believed, such as Sol LeWitt, Robert Barry, and Richard Tuttle, on Herbert’s modest salary—and only bought works small enough to take home in a taxi.3 Ultimately, these works were donated to Washington’s National Gallery of Art and 50 other institutions around the United States.4 New collectors often start by purchasing less expensive prints and multiples, enabling even those with lower budgets to own a work by Rembrandt van Rijn (1606–1669) or Louise Bourgeois (1911–2010). German Expressionist artists, who at the beginning of the 20th century revived the 15th-and 16th-century printmaking tradition of Albrecht DĂŒrer (1471–1528), recognized that the print medium enabled bourgeois collectors to acquire innovative art of their time at affordable prices.
Many have noted, however, that recent art market and economic changes are squeezing the middle class exemplified by the Vogels out of the market. With increasing wealth disparity and speculation in art becoming more and more common, competition for even emerging art and editioned prints has dramatically increased. A 2019 sale of works on paper by Ed Ruscha (b.1937) at Christie’s New York, saw formerly affordable prints by the artist realizing prices quadruple the estimates and beyond, suddenly dashing the hopes of collectors of more modest means who had dreamed of owning a work by the artist.5 That being said, there is plenty of affordable art to buy, and there is even an art fair dedicated to this purpose.6
Image
The American collecting pair Herb and Dorothy Vogel in their New York apartment.
Collecting one individual artist’s work in depth, often from different points in that artist’s career, is sometimes referred to as vertical collecting. (Some refer to this as a European approach.) For a while, the colorful collector Jean Pigozzi liked to select ten different works each of the emerging artists he collected for his “10 × 10” collection, thereby establishing a “position.” He continued to acquire multiple examples by each artist, focusing his collection on young artists in order to support them, to buy works cheaply, and, hopefully, to maximize investment potential.7
Horizontal or “butterfly” collecting is a term for buying individual works from a broad number of different artists. Crossover collecting refers to the practice of collecting works from across periods, from the ancient to the contemporary, and may be contrasted with niche collecting which focuses on specific genres, or movements.
While nothing compares to seeing art in person, the Internet offers wonderful opportunities to learn about art. With its visual focus, Instagram is a great platform for learning about the kind of art one likes, and even sophisticated collectors have been known to fall in love with artworks they discover through this means. Many artists now market their works directly through Instagram.
No matter where the specific interests lie and where art is discovered, collectors can—and should—hone their eye by looking at art from all different periods and in all different media as often as possible. One must see a lot of bad art to appreciate the good, and to learn what one finds compelling. The greatest collectors can evolve into connoisseurs in their own right, becoming just as knowledgeable and skilled as the dealers, curators, or other experts they work with—if not more so.

Buying from Art Dealers

Traditionally, collectors would start buying art from an art dealer (or gallerist)8 who is in the business of selling art, and usually specializes in certain artists or types of art. Dealers typically have a space in which they keep inventory of art and stage exhibitions which are presented to the public. Up until relatively recently, the majority of the art trade took place locally in bricks-and-mortar galleries, and it would be possible for a collector to be familiar with all of the art galleries in one geographical area. An individual would visit the gallery, look at the art, talk to the dealer, and sometimes purchase a work. Now, major market hubs such as London, New York, and Berlin each have hundreds of galleries, with many coming and going as markets boom and bust.
Given this landscape, how can a new collector find a reputable dealer? To start, one can consult professional organizations for member listings such as, in the US, the Art Dealers Association of America (ADAA) or the New Art Dealers Alliance (NADA)—though by no means all countries have equivalents to these. The gallery roster of respected art fairs such as Art Basel, The Armory Show and Frieze, whose participants are rigorously vetted, provides another good place to find galleries with interesting works to offer. Most cities with a critical mass of galleries also organize monthly or yearly open-house events where openings are held concurrently, such as Gallery Weekend in Berlin in late spring or the Second Saturday Gallery Nights in the Wynwood Art District in Miami. After such initiations, the process is about engaging with dealers, following artists, and building relationships over time.

PRICING

Transparency has long been an issue in the art market. Galleries and dealers are known to not always be forthcoming with prices. Some galleries have price lists available at the front desk; others do not. New collectors are often intimidated when prices are not listed, and this is one reason why many feel more comfortable entering the market online.
Whether in a gallery or at an art fair, collectors should not hesitate to ask for prices for the works on view. In New York City, the law requires galleries to post prices in plain view—though, in practice, many galleries still ignore this.9 Sometimes gallery staff will refer inquiries to a sales associate.
Unfortunately, a price quoted verbally cannot always be taken at face value, and it is not uncommon for different collectors to be quoted different prices for the same work of art, especially in cases where the competition is fierce. (See “Ascertaining Value at Time of Purchase,” pp 56–7.)

RELATIONSHIP BUILDING

While dealers are in the business of building relationships with collectors and finding new collectors, it behooves the collector to take pains to build a relationship with the dealer. This usually begins by the collector asking questions about art and demonstrating genuine curiosity, knowledge, and a degree of seriousness. Making payments on time—whether that be paying cash immediately or never missing a deadline if paying in installments—is another way to become a valued client. After a strong relationship develops, a dealer may give the collector “first look” on an artist’s new body of work or prime secondary-market material, hold a piece on reserve, or place a collector on a wait list for yet-to-be-created works by a sought-after artist. Some collectors will invite dealers to their home to show them other works in their collection as a way of deepening a relationship.
Once meaningful relationships with dealers are established, collectors should, however, try to avoid falling into the comfort zone of only buying art from the same few trusted dealers. Collections populated only with works by artists represented by a small number of instantly recognizable galleries often fail to inspire, tending to reveal the hand of the dealer(s) more than the individual journey of the collector. While dealers should guide, educate, and supply, it is up to the collector to keep an open mind, continually exploring new galleries and other possible horizons.

THE PRIMARY MARKET

When a dealer sells work that is on the market for the first time, work that is usually consigned to the dealer directly from an artist, they are operating in the primary market. In such situations, the artist and the dealer usually split the retail price paid by the buyer 50–50, but this percentage tends to shift in favor of the artist as prices rise.

Access

All of this presupposes that a gallery is willing to sell to a buyer in the first place. It is the dealer’s job to build the reputation and market for an artist’s work. Top dealers strive not simply to sell work, but rather place it in the hands of esteemed collectors and institutions. Selling to the wrong party can result in the dealer’s losing control of an artist’s market. The dealer will thus generally not sell to just anyone who happens to have the cash, and will avoid selling to a suspected speculator—someone who is perceived to be only out to make money by buying a work and “flipping” it at auction. Art buyers known to engage in such practices can quickly be blacklisted by a gallery, if not an entire gallery community. However global the art world is, it is in practice quite small; information about the particular interests and habits of collectors soon gets around.
In today’s competitive primary market, even respected collectors often have a hard time accessing the works they want. As seen with “hot” artists such as Nigerian-born Njideka Akunyili Crosby (b.1983), all works may be reserved for museums before a gallery show even opens. In the case of Amy Sherald’s (b.1973) first gallery show of new work at Hauser & Wirth in New York after her highly visible 2018 official portrait of Michelle Obama made her a star, the paintings were simply not being offered to collectors until museums had time to decide and raise the not-insignificant funds. (Prices ranged from $375,000–750,000.) It is also not uncommon to receive preview lists before a show or art fair and immediately express interest in a work, only to find that it is, in fact, not available. Even with good artists whose market is not exactly on fire, prestigious collectors who already own work by an artist may still find that they are lower in the pecking order than another collector who has acquired even more.
Ambitious collectors adopt different strategies to get the works they want. Galleries often have an expectation that a collector will buy works by other artists in the gallery’s roster, a pledge of support for the gallery often pinned to being given priority when the most coveted works of more established artists later become available. One top collector routinely buys the work of a gallery’s stable of emerging artists, in which he has no interest, in order to better his chances of getting the blue-chip work by the artist he actually wants. Some gallerists are unabashed in their efforts to pitch works to buyers that are not remotely similar or related to the artwork desired.
Another way to gain access to top works in a competitive market is to promise to gift the work in future to a desirable institution such as New York’s Museum of Modern Art. This may also entitle the collector to a greater discount, similar to those offered to museums. Collectors should use caution in making such promises, no matter how well-intentioned, as gifts are not always readily accepted by institutions (see Chapter 10, “Gifts and Estate Planning,” pp 234–6), and reneging on a negotiation can result in broken relationships or even liability.

Right of First Refusal

Sometimes, as a condition to having access to the most desirable artists, top galleries require collectors to sign a right of first refusal at the time of purchase, meaning that if a collector wants to sell a work sometime in the future, they must offer it back to the original gallery at the sa...

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