Wheeling, Dealing, Hoping, Praying at Miami's Art Basel
LUKE BURBANK, host:
Well, if you're a guy like Mark Zuckerberg, and you got some extra coin jangling around in your pocket, like, maybe a half million dollars or so -maybe you're wearing cargo pants, maybe it's like four or five pockets - it is still not too late to get on a plane and head down to Miami to pick up a couple of pieces at Art Basel, arguably the world's hottest art fair. It kicks off today.
This year, more than 40,000 people are expected to check out hundreds of booths at the official Basel site. Add in a bunch of satellite shows that tend to spring up around the city. Well, between the cocktail parties and the late-night swims, Basel's patrons are expected to drop around a billion dollars on art. But not all of those who are buying are doing so strictly for their love of the stuff. For many, it's about buying relatively low - the key word, relatively low - and selling high. Yes, they are chasing the old Benjamins, as art flippers.
Joining us now from Miami is Lindsay Pollock. She's down on the 305, covering Basel for Bloomberg News. Hi, Lindsay.
Ms. LINDSAY POLLOCK (Reporter, Bloomberg News): Good morning.
BURBANK: How are you feeling at 7:09 in the a.m.?
(Soundbite of laughter)
Ms. POLLOCK: Not as good as I felt last night standing on the beach listening to Iggy Pop rock out - late night.
BURBANK: Oh, quite a life, you lead, Pollock, quite a life.
Ms. POLLOCK: It's tough.
BURBANK: All right, so what exactly is art flipping, and what's this sort of doing in the art world? And what's the reaction been?
Ms. POLLOCK: Well, it's sort of a newish phenomenon borne of this really fast increase in values for contemporary art over the last couple years. And what's happened is, for certain artists that have been targeted by certain collector/flippers who are able to purchase work relatively inexpensively at a gallery where they try to keep prices, you know, moderately affordable - and, you know, I'm talking in the six figures, perhaps, but not in the seven figures. And then within a couple of years, the values have appreciated so drastically, people turn around and sell the work at auction. And the reason the prices appreciate so drastically is just a small simple supply and demand.
You know, an artist can only make so many pieces a year. If there's only about, say, 12 pieces released a year, and the artist's name becomes well known and people really want it, prices go up. So this is really the basic act of art flipping.
And, you know, it was funny. When I went around yesterday in the convention center for the - they had the VIP openings yesterday, so it was people who were invited to - the big bankers weren't there.
BURBANK: The Lindsay Pollocks of the world, basically.
Ms. POLLOCK: Yes, exactly. And I would ask some dealers, you know, what do you think? Are there art flippers out there? And people would - their body language would change. They'd get all stiff and they'd say, oh, those are the ambulance chasers of the art world, or…
Ms. POLLOCK: …you know, that subject's an unbelievable hornet's nest. Or, why do you want to talk about that? But people would…
STEWART: Which, of course, as a journalist, makes you want to talk about it more.
(Soundbite of laughter)
Ms. POLLOCK: Yes. Let me tell you, it's a terrible topic. Tell me more.
And, you know, one thing that's interesting is that someone pointed out that Warhol seems to be the artist - and we were talking about Warhol before - who's experienced some of the most dramatic flipping and manipulation, of people buying up major groups of Warhols and then selling them at auction for these really, real extreme prices.
BURBANK: So - but there's, I guess, kind of a disconnect here, because if this was any other business, that would just be, you know, those of the dollars and cents of it. You buy something low, you sell it high. But art has this sort of larger purpose in a lot of people's minds. It's not supposed to necessarily be just about the commerce. So how do these artists and the people that are representing them - how do they - you know, I have to imagine they can't love the idea that their work is just being bought as a pork-belly future.
Ms. POLLOCK: I think you're right. I mean - the dealers are, in general, they do speak out about it. Some dealers are really - firmly speak out about it, and they set policies up at the gallery. So if you buy work by a particular artist, you have to sign a contract that if you're going to sell the work, you must give the gallery the first right of refusal. And I think that's the general prevailing feeling about it. They want to avoid it.
But what I learned yesterday in doing a little research is that some dealers actually get in cahoots with the flippers in order to sell to somebody who they know is going to put it up at auction. Because once you get that public price, if you have an artist whose work was $50,000 last year and it sells for 2 million at auction, well your inventory has just taken a big leap.
BURBANK: I think last time you were on the show, weren't you talking about a Jeff Koons piece that didn't - I think it was Jeff Koons - that didn't sell - this is in New York, during the big auction season here - and his gallery owner was - rebought it or something?
Ms. POLLOCK: Yes, there are a couple of Jeff Koons pieces actually - these big sculptures. It was in New York. There was a hanging heart and a big blue diamond. Both pieces were, in fact, bought by Larry Gagosian for, you know, a four-time multiple of what he had sold them the year previously.
BURBANK: Hm. So maybe trying to kind of make sure they protect the brand, somewhat.
Ms. POLLOCK: Exactly. And that's have been going on, you know, nothing - the art world is the last unregulated frontier, to a certain extent. So it's been going on for a long time, this kind of thing.
BURBANK: Can you tell - I have, myself, been subjected to or had the pleasure of being at many sort of installation art and other sort of Basel-esque event. Can you tell the flippers from the people that are just the art lovers?
(Soundbite of laughter)
Ms. POLLOCK: Well, there's probably a little bit of a different - I mean, personally, I - there is a group of people who are known to be sort of semi-professional, I guess, dealers - amateur dealers in this flipping sense. You know, I don't know if it's fair to say that they walk a little faster. They're talking into their - yelling into their cell phone a little louder. You know, there are certainly people who are - you see works that are rumored to be sold by them regularly at auction. That's a good clue. You know, if they're trading heavily. You know, if you really loved the thing, why are you selling it the year after you bought it?
BURBANK: Uh-huh. Because I would imagine this is just drawing from, like, every stereotype possible, to people that are loving the art, kind of - are having a certain experience and they're going through it. And if somebody's walking through with a team of accountants behind them and they're…
Ms. POLLOCK: Right.
BURBANK: …you know, on the phone with, you know, Moscow or something, it's, like…
Ms. POLLOCK: Exactly.
BURBANK: …possibly a different deal going on.
Ms. POLLOCK: They're talking to the banker on one side to get the financing.
STEWART: I'm also wondering about the whole scene surrounding this. I'm reading one of the New York tabloids.
Ms. POLLOCK: Yeah.
STEWART: They're describing what's going on, and that Jimmy Choo Shoes are sponsoring this event, and Conde Nast and 7 For All Mankind jeans are hosting another event, and Russell Simmons is hosting a big party.
Ms. POLLOCK: Yeah.
STEWART: Does that take away from the art at all, the scene of it?
Ms. POLLOCK: Well, you know, that's really the big question. And if you talk to some dealers, they are pretty - people who, you know, pay a hundred thousand dollars to set up a booth in the convention center, they are a little concerned that there's so much going on, that it kind of diffuses the enthusiasm and the focus on the art.
You know, opening night, I went to parties, and one thing I noticed, you know, is that there's less concentration of people because there's so many events going on. It's much more spread out.
BURBANK: Right, because of the - there's Basel, and then there's all of the, quote, unquote, "cool things" which are actually the other stuff, right, that aren't even really affiliated with Basel.
Ms. POLLOCK: Unaffiliated things that popped up, exactly. I mean, there were so many unaffiliated things happening Tuesday night that I could barely get to the official welcome party, which, you know, was unheard of a few years ago -everyone went to the opening party.
BURBANK: Are there any artists or dealers that actually have - they believe so strongly about their work and so strongly against this art flipping idea that they really won't sell pieces to certain people?
Ms. POLLOCK: Yeah, I mean, there are people who say that they black ball collectors. And then it's clear. It's easy for them to figure it out. They see a painting up at auction by their artist and they can look in their records and see who they sold it to. And sometimes, I think they'll reach out to that collector and tell them about their displeasure for what they're doing and tell them not to bother coming back to the gallery. That's really the only recourse they have. They really don't have any legal recourse, I would say.
BURBANK: Well, Lindsay, it sounds like quite a party down there. Don't have too many mojitos.
Ms. POLLOCK: Thanks.
(Soundbite of laughter)
BURBANK: Lindsay Pollock, journalist who covers the art market for Bloomberg News, talking to us about Art Basel, which I just learned is not called Art Basil.
STEWART: We all learn something by listening to THE BRYANT PARK PROJECT.
BURBANK: Yes, we do.
STEWART: Coming up: Ms. Cohen goes to Washington. The story of one woman's totally geeked out trip to watch the Supreme Court arguments. That's coming up next.
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