Defending the Art Market – artmarketblog.com
Continuing on from my post on inaccurate art market reporting (see here), you may have noticed that it has become customary for the health of the art market as a whole, or in a particular region, to be judged based on auction results. The reasons for this are primarily due to the regularity of auctions and the availability of auction results both of which make the task of analysing and judging the art market a whole lot easier. Tempting though it may be to rely solely on the regular and easily available auction results, the fact remains that auction sales do not account for all sales of art. In fact, according to a report conducted in 2002 by the The European Fine Art Foundation (TEFAF), about 50% of sales in the US are conducted through auction houses leaving another 50% of sales that are conducted through dealers. According to the May 08 issue of ARTnews magazine, an ARTnews survey of dealers, collectors, and art advisers yielded a consensus that current annual private art sales around the world fall between $25 billion and $30 billion which, as the 2002 TEFAF report revealed, accounts for around 50% of the global art market. How then can one judge the state of the art market and make predictions regarding the future of the art market from data that represents only half of the transactions being carried out?
On another note, further to my previous post on careless art market talk which you can read here, I was sent an article on the art market by a Luke Johnson that was published in the financial times on the 2nd of September. The article, titled “Artful practitioners of a confidence trick”, is basically a completely inaccurate and ridiculous commentary on the state of the art market that proves how naive and misinformed some people are. In the article, Johnson writes:
“But just as the other asset classes have caved in during the past year, so the value of art must crash. And no part of the art market is more vulnerable than contemporary art, which has risen so very high on little more than PR and salesmanship.
I salute those who have created the merry-go-round: the gallery owners, the critics, the auctioneers, the publicists and even the artists. It has been a wonderful scheme to make lots of money out of almost nothing. But like all asset bubbles it must burst, and I suspect the end is coming awfully soon.”
By Luke Johnson email@example.com The writer is chairman of Channel 4 and runs Risk Capital Partners, a private equity firm
To be honest, I have never seen such an incorrect and uncouth analysis of the art market published in a major publication. If the article hadn’t been in such a prestigious publication I would have thought it was a joke but unfortunately, it is the real deal. I am not at all surprised that Johnson’s critique triggered more than a few criticism’s one of which was by the renowned private dutch art collector, Mr. Arie de Knecht, whose reply was published by the Financial Times in which the Johnson Article was also published. De Knecht’s rather succinct reply to Johnson’s article was:
“Of course, corrections in any art market do occur, but really good art is relatively immune to gyrations as recently witnessed in the commodities markets, and the term “bloodbath” as now applied to what is predicted to happen to the contemporary art market reeks of boulevard journalism.”
From Mr Arie de Knecht (private dutch collector) to the Financial Times
Well said Arie!!
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications