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What else happened in the art market during the second half of the year is documented in the third and last part of our review.
Hauser & Wirth is said to have bought London's Groucho Club, including its art collection, from an investment company for nearly 40 million pounds, reports Oliver Barnes in mid August in the Financial Times.
Ursula Scheer describes the struggle between idealists and speculators over the interpretation of NFTs in the FAZ of August 13: "[...] as if the tokens, which cannot be copied, were the messianic promise for the digital age that had come true, as if they brought ad hoc salvation in the form of a grassroots, decentralized art trade without intermediaries with digital originals, the minting of which transforms virtual nothing into crypto gold. Others downright demonized NFTs as a climatic sin dependent on monster computing power, in which art, stripped of its being art, is degraded to an object of speculation by mostly male nerds and pays homage to greed-driven commerce. Instead of heaven or hell, it was rather the Wild West that opened up: As if in a gold rush, creatives of all stripes and degrees of fame tried their luck on the NFT market, as did galleries, auction houses, museums, sports leagues or crowdfunding initiatives, followed by collectors, donors, investors - and scammers."
For the Handelsblatt, I tapped the various art market reports for the topics of NFT and fractional ownership, among others.
Dark looms the depression that Sebastian C. Strenger sees befalling the art market for WELTKUNST (free registration): "The middle class of galleries, on the other hand, already has to worry about spiraling costs in the areas of transportation and heating. For the small galleries, the market-clearing trend that began even before the Corona pandemic will inevitably gain momentum. And artists will continue to be the weakest link in the chain and largely unprotected from the vagaries of commerce. In short, the impacts are getting closer."
The beneficiaries of unequally distributed wealth don't have it easy, either. Of the $73 trillion in wealth that would be inherited over the next quarter century, about half comes from just 1.5 of U.S. households, which Shanti Esclanate-De Mattei calls the collecting class at Artnews end of August: Morgan Stanley wealth advisor Sarah "McDaniel estimates that, for her ultra high-net-worth clients, whose fortunes total $30 million or more, 5 to 10 percent of their balance sheet is in art and collectibles, meaning that trillions worth of art is expected to change hands in the coming decades. Or so estate planners like McDaniel thought. But when heirs don't want their parents' collections, the two best options for collectors is either to gift the works in return for a sizable tax break or to sell off the art while the collector is still alive, said McDaniel. This doesn't just mean selling off the work as end-of-life planning, but simply selling work more often throughout life."
Which of the cities Seoul, Tokyo, Taipei or Hong Kong will be the art center of East Asia, Georgina Adam asks in early September in The Art Newspaper: "So, which will win? At the moment it's Seoul, hands down, but this is also because of uncertainties elsewhere. China specialist Philip Dodd says: 'There is always tension running up to the CCP's National Congress in October. Afterwards things may be easier, and Western artists are still eager to show in China. But with quarantine regulations unpredictably coming and going, China has complications which may not go away soon. Or may. The uncertainty is a major problem. Confidence has hardly been bolstered by reports of fish, crab and even a hippo being swabbed for covid in the mainland. So then, what about Taipei? Ultimately, it faces the same problems as Hong Kong, as the mainland gradually escalates its rhetoric against the island."
After an anonymous open letter almost three years ago, the Berlin gallery owner Johann is once again confronted with accusations of sexual abuse, which Luisa Hommerich, Anne Kunze and Carolin Würfel make public in the ZEIT (paywall): "The ZEIT has also been aware of the accusations for about three years, and in the meantime has spoken with a total of ten allegedly affected women as well as several witnesses, who were willing to talk about their alleged experiences with Johann König, but initially did not want it to be reported in detail. That has now changed: Some of the women have decided to go public. Their accounts are now more detailed, and some are now willing to give their real names and sign affidavits." However, the authors also concede, "If what the women tell is true, König did not commit any capital crimes. Rather, in the women's accounts, the gallery owner comes across as a man who at times oversteps boundaries, is assaultive, and who plays to his power and mixes professional and private sexual interests." One of them has already been attacked five years ago by her own medium for questionable journalistic practices in a similar matter (also paywall). In any case, it will be exciting to see if and how Zeit succeeds in making its accusations court-proof.
The FAZ has obtained a statement from König on the matter: "At the request of the F.A.Z., König issued the following statement: "The accusations are baseless and do not correspond to the truth. I am already being represented by a lawyer in this matter and all legal steps are being examined to take action against the dissemination of these false facts."
Annika von Taube takes up the cudgels for art flipping at Monopol: "The short-term turnover of works, disparagingly referred to as art flipping in the traditional art market, is accepted practice in the crypto scene. What matters is what you own, not for how long. And even if many players in this scene are speculation-driven, what's wrong with that if it increases the circulation of content as well as prices? It's constantly emphasized anyway that the value of a work of art is not to be determined by the market, but by its content quality and reception." The NFT market she refers to, however, has become proof of the Greater fool theory in the last six months. You might not want that for artists' careers then.
The tech giants' economic slump could put the art world in trouble, believes Ji-Hun Kim at Monopol: "Assuming that the golden era of Silicon Valley is really over, it doesn't mean that all the companies will close their shutters overnight. However, one should take a closer look at what implications this could have for the world of art and culture, if the previously unconditional trust placed in the giants - because there was so much money - were to be re-examined. The influence that Instagram, for example, has had on the art world does not need to be detailed here. Not only are exhibitions now curated to be almost exclusively Insta- and TikTok-ready, but the vast majority of careers in art, music and graphic design are based on how many followers young creatives have. The cultural world has completely submitted to the quantifiable exploitation mechanisms and performance indices of the digital platforms."
The pixel party seems to be over. Since the beginning of the year, the NFT market has plummeted by 97 per cent, reports Sidharta Shukla at Bloomberg. In September, only $466 million worth of NFTs were traded, down from $17 billion in January.
The complex relationship between art, money and NFTs is illuminated in detail by Shanti Escalante-Di Mattei at Artnews: "All this, and yet none of the NFT artists who emerged successfully from 2021 with new riches and expanded opportunities has picked up gallery representation. Skepticism remains, on both sides. [...] If crypto winter is the time to build bridges between the art and NFT worlds, well, folks have their work cut out for them."
If you're the subject of an episode of "Last Week Tonight" with John Oliver, you'll have to dress warmly. In October it was the turn of the art market, more specifically the trade in antiquities. The traders and museum people who appear do not cut a good figure at all. A good half hour of hair-raising humour.
Thanks to a cash injection from an private equity firm, Carpenter's Workshop has become the first mega-gallery for design, notes Sophia Herring in The Art Newspaper: "Now with outposts in Paris (including a massive research facility near Roissy airport), New York, Los Angeles and, next spring, an expansive space at Ladbroke Hall in London, the gallery has surpassed all its competitors in the art and design sector to become, effectively, a mega-gallery. An investment from French private equity firm Montefiore in 2020-reportedly worth multiple million dollars-not only made expansion more feasible, but also reflected a significant vote of confidence from a major funder."
Instead of being sold, the Gagosian Gallery is getting an advisory board, Kelly Crow has learned for the Wall Street Journal: "The gallery's 77-year-old founder, Larry Gagosian, said Wednesday that he's not retiring anytime soon, but he wants to do whatever he can to give his company a fighting chance in the long run-and creating a board could help, he said. The 20-member board he formed earlier this year will advise him on strategic and financial decisions. He said he retains ultimate say. Mr. Gagosian acknowledged for the first time that the board is part of his broader thinking about the gallery, though he winced at naming it succession. I'm still working hard and not stepping back, but I'd like for my gallery to continue indefinitely,' he said, 'and this board gives the gallery a broader reach and another dimension, professionally.'"
Rarely has a German newspaper on this side of the Springer press been so dissected by another newspaper for violations of journalistic standards as the ZEIT has now been by Sören Kittel and the Berliner Zeitung (English version) because of the now infamous article on alleged sexual assaults by the Berlin gallery owner Johann König: "In the case of König, it becomes apparent that the readers of the Zeit text were presented with a truncated picture. Research by the Berliner Zeitung leads to the conclusion that this report should never have been published in this way. There are compliance conflicts with one of the authors and an editor of Die Zeit. The text seems one-sidedly researched - and on top of that there is a script exposé for a kind of Netflix series in which the König case is also dealt with and which reads like a manual for activism, written by an author of that Zeit text. According to an anonymous source, it was written before the publication of the Zeit text and virtually prejudged the subsequent research, i.e. anticipated the guilty verdict." The details are truly hair-raising.
The good intentions with regard to artists' profit-sharing did not last long in the NFT market. The beneficial resale rights schemes of the various marketplaces are being cashed in, writes Torey Akers in The Art Newspaper: "Axios reported that four separate crypto marketplaces will stop honouring artist royalties, a worrying trend that impacts those who first introduced blockchain into the cultural consciousness. Magic Eden and LooksRare in particular have pivoted to royalty-optional models, allowing buyers to decide whether or not to pay creators the customary 3%-10% of the resale price for NFTs. The motivation is clear: traders want larger profit margins on NFT resales, and platforms want to retain and reward traders who buy in bulk, a practice that compounds fees at a steeper rate than one-off purchases. This progression has prompted investors to speculate as to whether the NFT bubble is finally ready to burst." Now that really comes as a surprise. Not.