UK Edition
The problem with selling contemporary art at auction: The Artist Pension Trust withdraws 18 lots from Sotheby's
Last week, 18 lots estimated to sell for as much as £200,000 were withdrawn from a contemporary art sale in London. They included works by former Turner Prize nominees and winners David Shrigley, Jeremy Deller, Richard Wright, Jane and Louise Wilson, Liam Gillick, Martin Boyce and Douglas Gordon, as well as OBEs Ryan Gander and Bob and Roberta Smith (aka Patrick Brill).
Apart from the artists’ shared distinctions, what bound them together was that they had all invested in their own work by placing these examples as long as 14 years ago in the Artist Pension Trust (APT) – which was now selling. The catalogue had been out for a month and the works on cue for the pre-sale exhibition when, at the last hour, the APT told Sotheby’s to stop the sale. Why it did highlights a problem in treating art, particularly by young contemporaries, as an investment.
The APT began in 2004 when businessman Moti Shniberg started inviting artists to invest not money, but their art into a pension pot. The idea was "to give artists long-term financial security through APT’s patented mutual assurance model". If collectors can make money out of art when the value goes up, the reasoning went, why can’t artists?
Each artist, selected for their potential, would contribute 20 works over a period of 20 years to the collection which would then store and insure them, lend them to image-boosting exhibitions, and ultimately sell them.
There was a benevolent aspect to the proposal too; the proceeds would be divided between the individual artist (40 per cent), a regional pool of contributing artists (32 per cent), and the staff of the Trust (28 per cent to cover administration costs).
Now numbering some 13,000 works by 2,000 artists, the APT Collection is one of the biggest in the world. In 2014 Shniberg valued it at $500 million, estimating that would double over the following four years. Sales did not start happening until 2016, and since then, over 60 works have sold for approximately $1.2 million.
Selling efforts have increased with the recent merger of APT with another Shniberg company, MutualArt, which boasts a massive database of market information with half a million users – "mostly collectors and art world professionals". With the merger came a new sales team culled from auction houses and galleries that was advised initially by Sotheby’s former contemporary art managing director, Saul Ingram, who has now since resigned.
The first sales were all conducted privately, but this year, the Trust decided to try the auction route. Contemporary art is the salerooms’ strongest suit, and they can often achieve higher prices than galleries can. But could they do so with less established artists? The first group of auction sales at Sotheby’s New York last month appeared to go relatively smoothly.
The APT, together with Sotheby’s, had selected artists who had all sold at auction before and only two out of the 15 works offered were not sold. One of the top prices of $26,000 was for a neon sculpture by the Chilean artist Iván Navarro, who exhibits with the Paul Kasmin Gallery in New York, and has sold 90 per cent of the 54 works of his that have been at auction. Sotheby’s total $231,000 for the APT artworks was comfortably above the $160,000 estimate.
So why was the London sale aborted? “We had conversations with some of the artists, and the closer the auction got, the more the artists and their galleries said that auction was not in their best interests,” says Al Brenner, CEO of the new MutualArt Group. Every artist fears that their work might be undersold, or unsold, at auction, affecting confidence and making sales from the gallery much more difficult.
“Some of the galleries said they could get better prices,” says Brenner. Having been left out of the initial process, gallerists are clearly looking to re-establish control, but whether they would be prepared to accept the agreed split, giving 60 per cent to APT and the other artists in the pool is another matter.
As it is, artists’ fears of the effects of going unsold at auction are already close to realisation. Not understanding that their work was withdrawn, the widely used Blouin Art Sales Index of auction results has recorded each work as "bought in" (i.e., unsold). That’s something for APT to rectify first thing this morning.
But the reluctance of artists to sell at auction highlights why financial models are difficult to apply to art. After this, Brenner says, he is not planning more auctions, though it might be a different story in Asia where artists are much more auction friendly.