BOOK OF THE WEEK
THE ORANGE BALLOON DOG
by Don Thompson (Aurum £16.99)
Though I don’t know much about art, I know exactly what I like: the 1977 Athena poster of the tennis girl scratching her bottom. The beauty and truth on show there has kept me going for 40 years.
As Don Thompson demonstrates in his excellent account of the ‘bubbles, turmoil and avarice’ in the contemporary art market, however, the big league collectors don’t even aspire to my degree of aesthetic appreciation. They are not interested in pictures as pictures, only in the investment potential.
With good reason. The cash involved is crazy. An Andy Warhol silkscreen print of Elvis recently made $81.9 million (£58.4 million) — sold to fund casinos in Cologne. $101 million (£72.8 million) was paid for a stick-thin Giacometti sculpture in 2014.
Don Thompson reveals in a new book, why the super-rich purchase art such as Jeff Koon’s Balloon Dog (pictured) only to lock them away
Jeff Koons’s Balloon Dog, a big version of what clowns create, produced in an edition of five, sold for $58.4 million (£42 million), which is the same as the American budget to develop the Ebola vaccine. The work was immediately placed in a New Jersey warehouse, ‘anticipating future resale at a profit’.
When Chinese billionaire Liu Yiqian used his American Express card to pay $170 million (£122 million) for a Modigliani Reclining Nude, he earned 132 million air miles and Christie’s had to fork out $3 million in credit card charges.
The art, Picassos, Gauguins and Matisses, is seldom displayed. It is locked away in climate-controlled foreign duty-free warehouses, ‘in the hope of future price appreciation’.
Such warehouses, situated in Luxembourg, Singapore and Switzerland (there are 1.2 million artworks concealed in Geneva), are like gold vaults or quarantine kennels.
‘A painting can be flown in from another jurisdiction and stored for decades without attracting taxation, so long as it does not enter the host country.’
Who are the mysterious buyers and sellers? We will never know for certain, as transactions are conducted by intermediaries on behalf of offshore corporations and trust funds. We only know that Dmitry Rybolovlev, a businessman from the Urals, sheltered $650 million (£468 million) in art in a company called Xitrans Finance because this was disclosed during his divorce proceedings.
What we are told by Thompson is that there are 2,200 billionaires in existence, and 150 of them regularly buy art in the £7 million-plus price bracket. A huge new market has opened up in China and, by 2015, 43 per cent of the world’s richest people came from outside the West.
Don revealed Art auctioneers often host the super-rich and their children at opportunities to schmooze such as parties and private viewings
Sotheby’s and Christie’s chase these people shamelessly. Thompson says that they even host birthday parties for collectors’ children. ‘The hope is that the kids invite their school friends and that the friends’ parents stay for the party’, where they can be schmoozed. (Does Jeff Koons do a toy balloon dog folding act?)
Collectors and potential collectors are invited to private views and fed on Moet and Beluga caviar.
Buyers are offered first-class travel to attend auctions, where they are hidden away from ordinary people in smoked-glass booths called skyboxes to prevent rival dealers from photographing them and researching their identities.
Art is anything you can get away with – Warhol
The strategy works. Eighteen Chinese businessmen were flown to New York in May 2014 by Christie’s, and they bought $236 million-worth of French Impressionists in two days.
The super-rich expect a privileged, regal existence of total luxury and the kind of item or toy they like to purchase must not be available to the mob.
When it comes to trophy art, galleries do far more than provide a traditional ‘due diligence on authentication and provenance’ for each lot. Today, they run financial advisory departments, informing clients (who often, frankly, don’t know a Manet from a Monet) about ‘art-related estate planning and asset portfolios’.
Though auctioneers make their own money from hammer-price percentages and fees from private sales, the chief beneficiaries, on the selling side, are the independent personal advisers, who locate the pictures for the client and who are working on commission — one lucky chap made $26.5 million (£19 million) in 2009 when Qatar Museums decided it wanted a pile of Mark Rothkos. Unsurprisingly, recrimination and litigation are rife, as there is no such thing as a rational price. Everything is subjective and volatile.
A Jeff Koons sculpture was auctioned before it was made in 1994. The value tripled by the time of its delivery in 2014
Though Picasso’s prices have never fallen, there can be sudden hikes in value, or reputations that fall, or are seen to be artificially inflated, and buyers and sellers and galleries and dealers are always suing each other for ‘breaches of fiduciary duty’.
But, as they find when they come to court, hard facts are hard to come by — and sometimes, works don’t yet exist in any shape or form, except in the imagination, though this doesn’t stop galleries from selling and re-selling the rights to eventual ownership.
The artist, too, could keep putting his price up — what Jeff Koons called a ‘call for additional capital’.
One of his sculptures, which hadn’t been made at the time, was bought in 1994. It was finally delivered in 2014, the cost having gone up, by millions, three times.
Then there is the problem of forgery. If it looks good and fits the bill — so what?
THE ORANGE BALLOON DOG by Don Thompson (Aurum £16.99)
Modern art is easy to replicate, as there is scant draughtsmanship. A Jackson Pollock everyone admired was found to contain pigment not available commercially until 1970. Pollock had died in 1956. More legal cases, more jail terms, ensued.
Art, said Warhol, ‘is anything you can get away with’, such as soup cans, pickled sharks, dots, bricks and unmade beds.
Jeff Koons’s 10 ft-tall lump of Play-Doh, the colours spray-painted by a ‘Connecticut vintage-car restorer’, and worth a mint, is a good example of the lunacy: ‘Look how sensual these forms are,’ burbled the artist. ‘When you rip Play-Doh apart and stretch it, it’s like a Rodin sculpture.’
Don Thompson’s book is about greed, acquisitiveness and infantile selfishness; it is about a section of society that is so rich, some of them must be half-mad.
Yet, as auction houses in New York can generate £1.1 billion in a few evenings, or £4.3 million a minute, I suppose neither Christie’s nor Sotheby’s will be much interested in my tennis girl poster, currently available on eBay for £3.69 with free postage.
No Moet and Beluga for old Roger Lewis.
