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Killed Deals, Crashing Markets, Flailing Flippers, by Deleted on Sept 13, 2015 22:43:59 GMT 1,
""Could we be in for a rough ride this fall in the high-flying, gravity-defying top end of the contemporary art market?[/p]
I experienced an epic instance of deceit when I sold a Rudolf Stingel to an end user in Los Angeles via two gallery intermediaries, one representing the famous TV personality who ultimately purchased the work and the other, my contact, a New York–based dealer who frequently sells to the chat show host. After terms were agreed and the invoice issued, I was informed that the sale was rescinded. A quick call to Deep Pockets revealed the astonishing fact—unbeknownst to the New York dealer—that the L.A. rep of the buyer (a reputable gallerist) had been adding chunky premiums on top of all the business he’d consummated with the client for years. In dealing, information is as valuable as the underlying asset.
But we dealers aren’t known to let a little moral turpitude get in the way of making money, so we picked up the pieces, lowered our respective asking prices, and closed. In art, like in real estate, it’s the old line from Glengarry Glen Ross: A-B-C (always be closing).
Then there’s the new art fraud with the same old set-up; I call it the Rembrandt-to-Renoir ruse. A portfolio is offered, typically at around €140 million to €150 million, with a range of works from Old Masters to Impressionists and a smattering of Picassos and a Rothko or two thrown in for good measure. The portfolio must be sold, quickly and quietly, as a whole—as if they’d ignore the Qataris or any of the other obvious players most likely to step up and pay the big bucks for individual works. Translation: the art market must really have hit the big time to be the subject of such obvious organized criminality.
In yet more instances of the scam over the last weeks, I was pitched a heretofore unknown blue period Picasso masterwork (and we know how many of those there are) along with the invariable Rembrandt, Renoir, etc. by a former judge on an entrepreneurial TV show. Judging by the flimsy nature of the ludicrously fake material, I should have replied, “You’re fired, stick to your day job”—granted he is a successful serial business buyer. A friend and former Goldman Sachs partner was audibly angered on the phone when I shot down the portfolio he was offered after asking for assistance in disposing of it, hungry for some summer deal flow and quick-fix profits from any sector. No one is exempt and you’ve all been warned.
Who will be the next to dip their toes into the ever-more seductive art trade? Already we have Kanye on record stating that he’d trade two of his Grammys to “be able to be in an art context.” What would I trade to be in a Kanye context? The last time I heard something like that was about 20 years ago, when artist Mark Kostabi asked me what it would take to insert him into the avant-garde. I replied, “About 20 grand.”
I sold some emerging art this summer at the day sale of a major auction house, commending myself for getting out of that market just in time. One piece of particularly shaky quality (who hasn’t made a mistake?) was knocked down at a surprisingly high price, which seemed too good to be true. And it was. When payment was due 35 days later, a week went by, then another, then another, until it was revealed that the buyer did a runner and reneged. (When I change my mind I call it a Kenege—when you’ve been in the business for a quarter century, it happens.)
Maybe I will show up at the major fall auctions wearing that T-shirt I got from the new online secondary-market selling platform ArtList.co, the one that says “f**k Sotheby’s and Christie’s.” It’s sweet of ArtList not to want to f**k Phillips, too, but I suppose Phillips does a pretty thorough job of doing it to themselves.""
Full article here: www.artnews.com/2015/09/08/killed-deals-crashing-markets-flailing-flippers-what-does-it-all-mean-kenny-schachter-on-the-summer-past-and-the-season-ahead/
""Could we be in for a rough ride this fall in the high-flying, gravity-defying top end of the contemporary art market?[/p]
I experienced an epic instance of deceit when I sold a Rudolf Stingel to an end user in Los Angeles via two gallery intermediaries, one representing the famous TV personality who ultimately purchased the work and the other, my contact, a New York–based dealer who frequently sells to the chat show host. After terms were agreed and the invoice issued, I was informed that the sale was rescinded. A quick call to Deep Pockets revealed the astonishing fact—unbeknownst to the New York dealer—that the L.A. rep of the buyer (a reputable gallerist) had been adding chunky premiums on top of all the business he’d consummated with the client for years. In dealing, information is as valuable as the underlying asset.
But we dealers aren’t known to let a little moral turpitude get in the way of making money, so we picked up the pieces, lowered our respective asking prices, and closed. In art, like in real estate, it’s the old line from Glengarry Glen Ross: A-B-C (always be closing).
Then there’s the new art fraud with the same old set-up; I call it the Rembrandt-to-Renoir ruse. A portfolio is offered, typically at around €140 million to €150 million, with a range of works from Old Masters to Impressionists and a smattering of Picassos and a Rothko or two thrown in for good measure. The portfolio must be sold, quickly and quietly, as a whole—as if they’d ignore the Qataris or any of the other obvious players most likely to step up and pay the big bucks for individual works. Translation: the art market must really have hit the big time to be the subject of such obvious organized criminality.
In yet more instances of the scam over the last weeks, I was pitched a heretofore unknown blue period Picasso masterwork (and we know how many of those there are) along with the invariable Rembrandt, Renoir, etc. by a former judge on an entrepreneurial TV show. Judging by the flimsy nature of the ludicrously fake material, I should have replied, “You’re fired, stick to your day job”—granted he is a successful serial business buyer. A friend and former Goldman Sachs partner was audibly angered on the phone when I shot down the portfolio he was offered after asking for assistance in disposing of it, hungry for some summer deal flow and quick-fix profits from any sector. No one is exempt and you’ve all been warned.
Who will be the next to dip their toes into the ever-more seductive art trade? Already we have Kanye on record stating that he’d trade two of his Grammys to “be able to be in an art context.” What would I trade to be in a Kanye context? The last time I heard something like that was about 20 years ago, when artist Mark Kostabi asked me what it would take to insert him into the avant-garde. I replied, “About 20 grand.”
I sold some emerging art this summer at the day sale of a major auction house, commending myself for getting out of that market just in time. One piece of particularly shaky quality (who hasn’t made a mistake?) was knocked down at a surprisingly high price, which seemed too good to be true. And it was. When payment was due 35 days later, a week went by, then another, then another, until it was revealed that the buyer did a runner and reneged. (When I change my mind I call it a Kenege—when you’ve been in the business for a quarter century, it happens.)
Maybe I will show up at the major fall auctions wearing that T-shirt I got from the new online secondary-market selling platform ArtList.co, the one that says “f**k Sotheby’s and Christie’s.” It’s sweet of ArtList not to want to f**k Phillips, too, but I suppose Phillips does a pretty thorough job of doing it to themselves.""
Full article here: www.artnews.com/2015/09/08/killed-deals-crashing-markets-flailing-flippers-what-does-it-all-mean-kenny-schachter-on-the-summer-past-and-the-season-ahead/
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