Artist Resale Rip-off – artmarketblog.com

By On July 5, 2008 · 8 Comments

Artist Resale Rip-off – artmarketblog.com

ripoff Artist Resale Rip off artmarketblog.comWhen the Australian government announced that they would be introducing a resale royalty for artists I was extremely impressed and excited to say the least. Although there are many people in the art market who view the resale right as a major threat to the thickness of their wallets but as far as I am concerned there is a much bigger picture to consider which I have written about previously. Because of the success of the resale right in the UK as implemented by DACS, I and many other people presumed that the resale model implemented in Australia would be pretty much the same as the UK with a few minor tweaks to suit the Australian market.

Unfortunately during the week my positive impressions of the current Australian government were severely damaged when I found out the government was actually considering a resale royalty model that is nothing like the UK model and would severely limit the royalties able to be collected by established artists. The model being considered would limit artworks eligible for a resale royalty to those that had been created after the implementation of the resale royalty in 2009. This would mean that pretty much all artists other than those who do not have a secondary market for their work would have limits placed on the works which they could collect a resale royalty. Of greatest concern would be the impact this model would have on the Australian Aboriginal artists who are the ones that are most deserving and most in need of the royalty. There are many elderly Australian Aboriginal artists who would benefit greatly along with their community from receiving the royalty yet would be virtually excluded from the right if this ridiculous post resale implementation creation date model is implemented. At the very least the model implemented in Australia needs to include all works created by living artists.

I would like to hear your thoughts on the resale right so I have devised some questions below that you can answer in the comments section below. If you are reading this post on another website other than the Art Market Blog please go here to post your comments.

1. Do you think that the resale right in the UK should be extended to include deceased artists who are still in copyright?
2. Do you believe that UK dealers would take their business overseas to countries where the resale right does not exist if the resale right in the UK is extended to include deceased artists?
3. Is there another resale model that you think would satisfy both the artists and the dealers?

Artist Resale Rip off artmarketblog.com**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.comt Artist Resale Rip off artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

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  • http://TribalArtery.blogspot.com William Waites

    I’m concerned that the resale royalty scheme, well intended as it is, is fraught with unintended consequences.

    Will dealers risk buying from young and not yet rising artists, recognizing that the resale of their work may never reach a level that justifies a gain,let alone a royalty?

    Will the scheme allow for works on which the dealer takes a loss? Obviously, one will not be able to go the artist for a “reverse royalty”. Perhaps there will be a credit from the royalty collecting authority that will be deducted from gains realized on other works.

    And, yes, I believe that dealers will go outside of the jurisdiction of the royalty collector to sell, if it makes a difference between selling at a price covers the dealer’s risk, investment and operating expense vs. not making a sale or losing money on a sale.

    There is a tendency to view dealers as people who victimize the artists and deprive them of their true earnings. But without dealers, would there even be a market?

    Dealers help both to stabilize prices and to increase the value of the most accomplished artists, thereby encouraging them to earn more money from their next work.

    But tell me, how has the UK scheme worked concerning these issues? Is it being tracked not only for intended benefits but also unintended consequences?

    Also, if the royalty was extended to the work of deceased artists, to whom would the royalty be paid? The heirs? The estate? Or the royalty authority? Woul dhte royalty be taxable? Isn’t this just another way to collect more taxes?

    Thank you for any enlightenment?

  • http://www.artmarketblog.com artforprofits

    Hi William, thanks for the comments. The resale royalty will not apply to the first transaction of the work from the artist to who ever they sell it to so I would see lots of dealers changing to a commission based structure as opposed to purchasing the works outright which would count as the first transaction (that does not incur a royalty charge) and would result in a resale royalty being applicable when the work is sold the first time by the dealer.. The resale right is applicable regardless of whether the dealer is making a profit or not but if a dealer doesn’t make a profit on a work they are obviously doing something wrong and should be looking at the way they do business.
    For deceased artist’s the payment would be made to the estate or whoever has been assigned the artist’s copyright as the right is based on duration of copyright

  • http://TribalArtery.blogspot.com William Waites

    Thanks for the clarification.

    Are you not concerned that the artist in a consignment arrangement does not get any money until the work sells, vs. being paid out right if the dealer buys it for resale?

    Many artists I deal with won’t consent to consignment. They need the money. Now.

    That’s one of the unintended consequences I am referring to.

    As for unprofitable resales, perhaps the change in the way the dealer does business will be to purchase only works from proven artists with a track record that assures a profitable resale. An artist who doesn’t fall in that category is out of luck, I guess.

    Aside from that, I am not moved by an argument that imposes additional expense on a business and then says the business that can make money under those circumstances should change its way of doing business.

    Maybe it’s just me, but I don’t think this scheme is good for the artists or the art market.

    But thanks for detail was lacking.

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  • http://www.artnewsblog.com Art News Blog

    I dont think there should be resale royalties, fullstop.

    What about collectors that have paid thousands too much for an over-hyped artist that was hot at one time, but is now worth much less? Can they be compensated by the artist or the estate of the artist?

    Paintings are products, just like real estate or cars, once they are sold, they no longer belong to the seller (artist). If a collector is lucky enough to have picked a winner, he/she deserves the profit.. all of it.

    Being an artist, I wont be refusing any resale royalties though :-P

  • http://www.securitizedarts.com Andrew Richard

    Nick: good questions… In my opinion,

    1. The resale right in the UK SHOULD be extended to include deceased artists still in copyright, but when you are building a coalition to pass a difficult law favoring the less powerful, it’s often becomes expedient to focus on harder parts later.

    2. UK dealers WILL take their business overseas if the profits warrant it, but most artists don’t warrant it — their problem is selling anything at all.

    3. Lacking an enforcement infrastructure, a private model is the only one capable of the flexibility required for each artists particular situation.

    Andrew@SecuritizedArts.com

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