Kobel's Art Weekly

Kobel's Art Weekly 27 2024

The year 2024 is halfway over; it's time for a look back, as always in three parts. Hubertus Butin's thematisation of the backdating of artists' own artworks at the beginning of the year must be considered almost prophetic. He addresses the not entirely unproblematic practice of some artists of backdating their own works in the FAZ: "In contrast to Ernst Ludwig Kirchner, Giorgio de Chirico was not interested in creating a higher idealistic value; rather, he aimed at a banal maximisation of profit. What both artists have in common, however, is that they fraudulently falsified the dates and deceived entire generations of art historians, dealers and collectors. Dating is therefore by no means always correct simply because the artists have dated their works themselves."

Christian Herchenröder takes a close look at Asia's large and diverse art market in the Handelsblatt: "High growth rates are over for the time being. That China will overtake the US economy is an outdated forecast. The land of the rising sun has slipped into deflation and is struggling with an unresolved crisis on the property market, high unemployment, shrinking foreign investment and geopolitical tensions over Taiwan. This is also having an impact on the country's art climate and the sales of the two most important domestic auction houses." However, he also points out: "China is not everything. The Japanese art market, which fell into a deep slumber after the 1990 crash, is also beginning to revive.“

Niklaus Nuspliger sheds light on London and its function as a safe haven for oligarchs in the NZZ: "Property is the vehicle of choice in the UK for foreigners who want to invest assets of dubious origin. Flats and villas can easily be filled with art, expensive furniture or other valuables. In 2015, investigative journalists from the TV channel Channel 4 showed in the documentary 'From Russia with Cash' how London property agents turn a blind eye even to the obviously criminal origin of client funds. Previously, the oligarchs were able to hide behind offshore companies, for example in the British Virgin Islands, which acquired the properties in their name. Such companies must now be registered in the UK, which creates transparency with regard to the ultimate beneficiaries. Identity checks will also be tightened when setting up a British company; previously, a few clicks on a website were enough." What once again becomes clear en passant from reading the report: It is not art that was and is the favoured vehicle for money laundering, but real estate. This is unlikely to have changed much.

Hong Kong's art market is apparently thriving, according to Reena Devi at Artnews: Despite recent speculation about Hong Kong's primacy waning as a major player in the art world over the past few years, mainly due to domestic political protests and Covid-19 restrictions, mega galleries and global auction houses continue to double down on the city. This week, Hauser & Wirth opened a new street-level gallery space in Hong Kong's central business district."

The NZZ has swallowed the collectors' network Independent Collectors in March, according to a press release: "The acquisition of Independent Collectors by the NZZ at the end of 2023 is a strategically important step towards the new art offering. This will strengthen NZZ's connection to the art market and the art community, especially in the growth market of Germany. The Berlin-based online network has access to almost 7,000 collections from around 100 countries and is optimally networked with private collectors, galleries and artists. In future, companies that are passionate about art will have the opportunity to position themselves more strongly in this environment and become involved in innovative ways via the new NZZ art ecosystem." The last sentence is perhaps not absolutely necessary for everyone to realise what this is all about.

Ursula Scheer summarises the new Art Basel UBS Art Market Report in the FAZ: "The bottom line - although still above pre-pandemic levels - is a minus of four per cent according to the report. This is how much the estimated total turnover of the global art trade shrank in 2023 compared to the previous year, to around 65 billion dollars. According to the analysis, this was primarily due to the top segment, where the hunt for top works at top prices was no longer quite as breathless as in previous years. Less than one per cent of the artworks sold account for 55 per cent of the added value: this is why the art market is noticeably affected when auction sales above the ten million dollar mark thin out, as happened in 2023." Daniel Cassady for Artnews draws similar conclusions from the report. Kabir Jhala emphasises the British market in particular in The Art Newspaper.

Damien Hirst has artificially aged and predated newly produced works of art. Maeve McClenaghan from the Guardian first got to the bottom of it with three works and shortly afterwards identified a shark in aspic trimmed to look old: "Dates attributed to artworks are widely understood to refer to the year they were completed. However, in response to questions from the Guardian, Hirst's company, Science Ltd, said the date the artist assigned to formaldehyde works did not represent the date they were made. 'Formaldehyde works are conceptual artworks and the date Damien Hirst assigns to them is the date of the conception of the work,' the company said.[...] Hirst's lawyers later clarified that while using the date of conception in the title was the artist's 'usual approach' for formaldehyde works, he did sometimes use the date the sculptures were made. 'The dating of artworks, and particularly conceptual artworks, is not controlled by any industry standard,' they said, adding: 'Artists are perfectly entitled to be (and often are) inconsistent in their dating of works." This is where the (juridical) poet is wrong. Since vintageity and provenance are part of the price-setting aura of an artwork, these things are taken very seriously by the market, and Hirst may have done himself, his collectors/investors and galleries a disservice in his greed. 

The 2023 financial year of Art Basel's parent company, MCH Group AG, is similarly loss-making as the previous year, according to the annual accounts. There is also a special effect in the form of a provision for the possible dismantling of a car park in Zurich.

The private equity firm Silver Lake, the largest single shareholder in Frieze's parent company Endeavor, in early April wants to swallow the company whole and delist it from the stock exchange, reports Reuters "Hollywood power broker Ari Emanuel, who is the CEO of Endeavor, has transformed the company, which has its roots in representing film and television talent, into a sports and entertainment powerhouse with more than 20 acquisitions." According to the article, the takeover offer to shareholders values Endeavor at USD 13 billion.

With her tenacious research into Gustav Klimt's “Portrait Fräulein Lieser”, Olga Kronsteiner continues to push the Viennese auction house Kinsky in the Standard.

The art market needs to dress warmly - the luxury sector has cooled off. According to dpa, LVMH is disappointing analysts: "LVMH suffered losses particularly in the alcoholic beverages business such as Hennessy Cognac. But even the largest division with fashion and leather goods such as Louis Vuitton handbags only achieved a plus of two per cent on a comparable basis. In the jewellery division with the Tiffany brand, revenue fell organically by two per cent. Thanks to strong demand for fashion, jewellery and perfume, 2023 was still the best year in the Group's history."

Patrick Drahi knows a lot about debt. The auction house Sotheby's, which he took over in 2019 for 3.7 billion dollars, has now developed a new product with which it bundles its loans granted against art as collateral totalling 700 million US dollars and lends them out itself. Tim Schneider explains in May the Sotheby's ArtFi Master Trust, Series 2024-1 Asset-Backed Notes in his usual detail for The Art Newspaper. If all goes well, the art market could perhaps drag the financial industry down with it in the next crash instead of the other way round, as happened in 2008.

The Guardian headlines that Damien Hirst has backdated at least 1,000 works of art. (Ursula Scheer from the FAZ offers a retelling in German). Meave McClenaghan spoke to five insiders who testified that of the 10,000 dotted paintings in ‘The Currency’ project, many times more were probably not produced in 2016 as stated, but in 2018. During the 2021 campaign, buyers were able to choose whether they wanted the physical work or the corresponding NFT after a one-year holding period. It is therefore an edition, albeit of 10,000 unique pieces. This is different from assigning monumental sculptures or large canvases to an important work phase retrospectively and thus potentially increasing their value. 

Christie's has actually fallen victim to data thieves. Zachary Small writes in the New York Times: ‘Hackers said that Christie's failed to pay a ransom when one was demanded. ‘We attempted to come to a reasonable resolution with them but they ceased communication midway through,’ the hackers wrote in their dark web post, which was reviewed by a New York Times reporter. ‘It is clear that if this information is posted they will incur heavy fines from GDPR as well as ruining their reputation with their clients. GDPR, the General Data Protection Regulation, is an information privacy law in the European Union that requires companies to disclose when cyberattacks might have compromised the sensitive data of clients. Noncompliance with the law includes potential fines on companies that can rise to more than $20 million.’ 

The good news first: the VAT in Germany rate will be reduced again to a uniform seven per cent, reports Ursula Scheer in the FAZ: ‘The Federal Cabinet has approved the draft for an annual tax law 2024 presented by the Ministry of Finance - and thus the reduced tax rate of seven per cent instead of the previous 19 per cent for the supply and acquisition of works of art.’ Christiane Fricke explains the previous and future regulations in the Handelsblatt: ‘In particular, the differential taxation mitigated Germany's disadvantage in competition with the most important non-European art trading centres. It could be applied to consignments from non-EU countries such as Switzerland, the USA and Great Britain. In this way, the surcharges on the hammer price could be reduced to around 41 per cent." The BVDG is also pleased in a press release: ‘Galleries are finally being treated equally to artistic creators and many other cultural enterprises. This strengthens their competitiveness and makes them fit for the future." However, the regulation is not due to come into force until next year.