Kobel's Art Weekly

Kobel's Art Weekly 26 2024

Daniel Cassady reports the falling credit rating of Sotheby's at Artnews: "S&P Global Ratings has downgraded Sotheby's credit rating from B to B- due to falling revenues and rising costs during the first quarter of 2024, according to a report from the Wall Street Journal (Paywall). S&P ratings, which are issued to both companies and countries, indicate the degree risk to investors. They range from AAA to D. The auction house's revenue has dropped 22 percent on the heels of a new, simplified fee structure that drastically lowered-and standardised-the traditional buyer's premium, sellers' fees, and commissions." The new fee structure will only take effect from the coming season, though. However, Sotheby's has just bundled loans that it had granted collectors and sold them to investors.

Art Money, a company that pre-finances art purchases, is already one step ahead, reports Celina Lei at the Australian Arts Hub. The cooperation partner of Christie's explains on its website that it is currently a little short of funds: "This means that from 8 June 2024, new clients will not be able to apply for finance, and existing clients will not be able to make new purchases. At least for now. For clarification, all galleries, artists and art sellers have been paid, or will be shortly - that's a different bucket of money (the debt side)." Please be patient until the company has recapitalised. In the event of insolvency, it will be interesting to see who the debts end up with. While the sellers have been paid out directly so far, the buyers have taken out a loan. The lender is Hatch Bank, as can be seen from the small print, a so-called industrial bank. These are not traditional financial institutions, but a special construct under US law, which spares the money lenders a large part of the tedious regulatory stuff that real banks have to deal with. Furthermore, it can hardly be assumed that the works of art purchased on credit will be sufficient collateral. As noted here two months ago, the majority of the goods purchased from one of the 1,900 participating galleries are - to put it politely - unlikely to be particularly liquid assets. A subtle indication of the reasons for the possible failure of Art Money can be found in the self-image of founder Paul Becker: "Founders really only have 3 jobs: Set and communicate the vision. Build a great team. Don't run out of money". This may apply to the start-up scene, where the company's goal is a successful exit - i.e. the sale of the company. Anyone investing their own money might first consider a business model that doesn't just work in boom times and with zero interest rates.

In a press release (PDF), Artsy announces the departure of CEO Michael Steib to the television group TENDA. His successor will be Jeffrey Yin, who has been responsible for the Group's finances as CFO and General Counsel since 2019. If the company is looking for a buyer, Yin would probably be the best choice. If Yin permanently fills two board positions, Artsy could simply save money as no successor CFO has been named.

With the transition of wealth between generations of collectors, the art market could also be in for some surprising developments, according to Bank of America's BofA Private Bank Study of Wealthy Americans, which Karen K. Ho read for Artnews: "The report, the Bank's biennial study of wealthy Americans, found that only 6 percent of collectors 44 years of age or older said it was 'very likely' they would sell a work from their art collections in the next year. That figure is a dramatic drop from 25 percent in 2022. Art collectors age 21 to 43, meanwhile, are much more likely than that older cohort to collect antiquities, use an artwork as collateral for a loan, or buy a work of art in the next 12 months."

Hans-Jürgen Jakobs and Regine Müller visited the new Reinhard Ernst Museum in Wiesbaden and its founder for the Handelsblatt: "The master of paintings himself says that he initially offered his collection to museums, but no offer convinced him. So now he has his own house, which could become a monument. Reinhard Ernst: "I try to teach people that everything in life comes back to you. Those who have done good things will experience good things." The Langen family continues to collect, as Regine Müller reports in the same issue: "The collection remains in dynamic motion, apart from its nucleus. Ten years ago, works by Pablo Picasso, Wassily Kandinsky and Salvador Dalí were auctioned off at Christie's in New York. However, they came from the private collections of the collector couple's three children. The Foundation's holdings were not affected by the sales. As ramified as the family, the exhibition surprises with its highly diverse positions. Who contributed which objects is not revealed; only the titles of the works and artists' names are listed in the usual purist manner of the Langen Foundation. 'It doesn't matter from which house which picture comes,' says Sabine Langen-Crasemann, daughter of the founder, who herself contributed significant pieces to the exhibition." Frank Kurzhals explains how the VW Group uses art and culture as a location factor in the same medium: "The magic word was, in addition to payment, the quality of living and later the quality of life. Art became a locational advantage. Hans Scharoun planned a theatre, Alvar Aalto a cultural centre with a library. In 2005, a science museum designed by Zaha Hadid was added. The Kunstmuseum Wolfsburg, which the city is celebrating in 2024, was also built 30 years ago as part of this series of cultural centres."

Following unrelenting criticism of its collection at the Kunsthaus Zürich, the Bührle Foundation has now relented, reports Phillip Meier in the NZZ: "In a letter, it announces that it is seeking solutions for six works in its collection at the Kunsthaus with the legal successors of former Jewish owners. According to the foundation, restitution is not ruled out."

"The painter Leon Löwentraut and the gallery owner Dirk Geuer have settled their dispute out of court", reports dpa. Ok.

The late New York gallery owner Barbara Gladstone pays tribute to Alex Greenberger in detail at Artnews: "Steady, carefully thought-out growth characterised the gallery, but even in a market climate where bigger is thought to be better, Gladstone kept her business modest. In 2020, for example, dealer Gavin Brown merged his space with Gladstone's, a move that many observers saw as a gigantic step forward for two gallerists who are so closely watched. But Gladstone generally did not make much of it." In the Handelsblatt Barbara Kutscher dedicates an obituary to her.