Function Magazine

Art sales especially art auction house sales are booming lately. It was announced that within a three day auction at Christie’s, the world’s largest auction house, it sold more than $1 billion worth of art recently recording the world’s biggest art sale week. At its one day contemporary art auction it received $658.5 million and added another $705.9 million at the 20th century works auction day. This gives the auction house a clear lead over its rival, Sotheby’s. Sotheby’s also made its second highest gross sales within the same period.

What cause these record sales? Some say it is the result of “excess and speculations.” Sales have been climbing within last few years and a new class of buyers with excess cash is entering the art market. Larry Fink, the chairman of the biggest asset management company BlackRock represent the new class of buyers with ample cash to spend on art and others. He is one of more than 170,000 world’s ultra-high net worth individuals in the world having more than $30 million in cash. Notable pieces sold included Lucien Freud’s 1994 oil painting, “Benefits Supervisor Resting,” which was sold for $56.2 million and Andy Warhol’s 1963 silk screen on canvas, “Colored Mona Lisa,” which was sold for $ 56.2.

Sotheby’s will be holding a planned auction of art of the estate of Rachel Lambert Mellon, better known as “Bunny” Mellon, in early November 2014. The auction will include 43 pieces of art work from various artists including Mark Rothko, Paul Seurat, David Nahmad, Richard Diebenkorn, and many others collected by the reclusive billionaire couple. Mark Rothko pieces will include 1955 “Untitled (Yellow, Orange, Yellow, Light Orange).” “Ocean Park” from Richard Diebenkorn and many works of Nicolas de Stael will also be included in the auction and expected to be sold at higher prices. Proceeds from the auction expected to go to the Gerald B. Lambert Foundation. Sotheby’s expect to collect $120 million from the art auction. Many pieces have been concealed from public eye for many decades.

Paul Mellon died in 1999 and the widow “Bunny” Mellon died at the age of 103 in March 2014. Together they spent decades collecting art using the fortune they inherited from the grandfather who inventor of Listerine and the father who was a banker. The couple was the founders of the Yale Center British Art. They also donated many pieces to the National Gallery of Art in Washington D.C.

The estimated value of the art market is approximately $66 billion a year. The global outlook for 2014 is extremely bullish. Hedge funds and various other vehicles create funds valued at $1.3 billion a year to buy and sell art. According to an article in Barron’s, there are 72 global art funds of which 55 located in China and others in the West including Europe and the United States. More and more millionaires and billionaires are buying art pieces and there are more than 32 million millionaires in the world.

Most of the high value contemporary and postwar pieces are sold in New York at dealers and auctions. But sales are not limited to the US and people from Asia and Latin America are buying in New York too.

The U.S. is the dominant player in the art market. China in second place accounts for more than 24 percent of the market followed by the United Kingdom which accounts for 20 percent. China is the largest emerging market for art sales in the world lately. Today it is the second largest market behind the United States. One of the problems auctioneers are faced with Chinese customers is late or non-payment by the winning Chinese bidders.

The J. Paul Getty Museums has two world class museums in the Los Angeles area, the Getty Villa in Pacific Palisades and the more modern Getty Center in Brentwood. The J. Paul Getty Trust has $6.6 billion endowment and it is the world’s richest art institution. It started with $700 million worth of shares of Getty Oil of the oil magnate’s company. The penny pinching billionaire’s collection starting from the Great Depression includes 18th century French furniture, antiques, Roman marble statues, and many others. Getty left detail instruction on how his fortune to be spent to promote art collection and others.

Located on 64 acres of hilltop overlooking the Pacific Ocean and opened in 1954 and relocated in 1974, the Getty Villa has a collection of 44,000 Greek, Roman, and Etruscan antiquities from 6,500 BC to 400 AD. The Villa design is inspired by the Villa of the Papyri and other ancient sites.

Sitting on a hilltop, the $1.3 billion more modern Getty Center was designed by Rodolpho Machado and Jorge Silvetti, the Getty Center was opened to public in December, 1997. It features pre-20th century European paintings, drawings, illuminated manuscripts, sculptures, and decorative arts; and 19th to 20th century American, Asian, and European photographs.

Collecting art is an expensive endeavor. Many who want to enjoy art are turning to renting art because of love of art and concerns over cost of owning art. Starting as low as $10 a month you can rent prints from online sites such as TurningArt.com, Rise Art and many others. A growing number of online sites are educating many art lovers while helping them to rent or own pieces at a cheaper price.

TurningArt.com advertises that it is effortless, affordable, fresh and local to rent art from them. They even install it for you. Many sites want you to answer a questionnaire so that they can determine your preference and suggest pieces for you to rent. Launched in 2010, the Boston based TurningArt.com works with local artists of your area and will facilitate renting their work. It is not just for your home and private enjoyment; you can rent art for your entire office at a cost of buying a piece. Membership at TurningArt.com starts at $10 a month, you can choose from a wide selection, and you don’t even have to pay for shipping. Of course, they will sell pieces to you too. Web sites also provide analytics, help artists to cut the middleman and reap the value of their work.

The London contemporary art market in February is a Mecca for art flippers. Works of up-and-coming artists are in demand more than ever before. Main reason is due to people who are flipping art and hoping to make a profit from it quickly. Business professionals think the phenomenon is a bubble in the contemporary art market. There are few signs that confirm the notion. According to Bloomberg Businessweek, works of artists that are new to the market almost doubled in 2013 compared to what was available in 2007. Another sign, works of renowned artists such as Andy Warhol are making more money for resellers.

Original works of arts of young artists such as Parker Ito and Oscar Murillo are now selling at auctions four to six times the original price paid by buyers. Most of the buyers are well-connected insiders of the art world. They are not only flippers but also collectors of works of young up-and-coming artists. Some of the items are changing hands more than five or six times a year, each time more than doubling the price. One unfortunate thing is that some studios are increasing the initial price for original work in anticipation of price increases in the future and trying to get the piece of the action.

The art world is smaller than many think it is to be. Within last 20 years, creation of wealth all around the world has given a tremendous push for art sales. Now China entering the art market in big way. The result is art market transitioning from few billionaires to a mass market. Art moved from being limited to museums and few galleries to homes of many wealthy all around the world. This helped the art market to get bigger and shifts its scale.

The largest corporation that deals with art is Sotheby’s. Beyond that there are no other big corporations dealing with art. Mostly big families those who are interested in collecting art dominates the market.

The Internet is rapidly changing the way we deal with art. Pictures, videos and movies of art, sculptures and others are beamed over the Internet for the whole world to see. This is radically changing the concept of dealing with art. The Internet broadcasted the recent purchase of Picasso’s The Dream by collector Steven Cohen. It is one of the most expensive paintings to go on the auction block recently. But the Internet and other avenues available today could also lead to inflated prices.

July 4th is a day of celebration in the U.S. But many do not clearly understand the true meaning of independence. Great Britain keep asking all colonies pay higher and higher taxes. Few brave men began making plans to write their own rules and govern themselves rather than paying higher taxes to Great Britain. The Congress met in Philadelphia, Pennsylvania and appointed a committee to prepare a formal document that reflects their values and tell Great Britain that it likes to govern itself. The Committee selected Thomas Jefferson to prepare the document. He worked in secret and on June 28, 1776 Congress discussed Jefferson’s “fair” draft making changes to it. On July 2, 1776 they declared independence and on July 4, 1776 adopted the Declaration of Independence. That is how the Independence Day was born and the Congress asked all members risk their lives and sign the new document which began on August 2, 1776 and by January next year Congress distributed the signed copies of the new document to all states of the union. Thanks to few brave men who risked their lives for treason, we now celebrate our independence on every 4th of July.

The Los Angeles based billionaire investor Eli Broad picked up a 1988 Jack Koons sculpture of Buster Keaton on a horse at the opening day of the Art Basel Miami Beach.  The asking price for the piece was from $5 to $5.5 million.  The 12^th edition of the Art Basel was held from December 5 through 8, 2012 in Miami Beach, Florida.  It is one of the most prestigious art shows in the U.S.  More than 260 galleries from all over the world are showing the work of more than 2,000 artists of 20^th and 21^st centuries at the show.

Art Basel is an international fair that holds events all over the world including Basel, Switzerland.  Many call it the “Olympics of the art world.”  Art Basel Miami Beach is a sister event to the Switzerland show.  The event has been going on since 2002.  It features main galleries from all over the world, world’s most respected dealers, offer exceptional pieces by world renowned artists and cutting-edge newcomers.  It also provides a special section for young galleries, performance art, public art projects and video art.  The just concluded event was attended by more than 50,000 art lovers.

During a recent auction by Christie’s in New York City, a rare piece from Claude Monet’s “Water Lilies” series was auctioned for record over $43 million.  The painting came from the estate of Ethel Strong Allen, widow of Wall Street executive Herbert Allen Sr.  She donated the proceeds from the auction to the Hackley School, a K-12 boarding school in Tarrytown, a suburb of New York City.

This among the best piece dates back to 1905 when Monet began painting his garden’s lily pond in Giverny, France.  Claude Monet’s “Water Lilies” collection includes approximately 250 oil paintings dating from 1840 – 1946, mostly from last 30 years of his work while he was suffering from cataracts.  His paintings are on display in many museums from New York to Paris and other parts of the world.  Many pieces from the collection previously auctioned for £18.5 million in 2007 to £41 million in 2008.  Generally they are estimated to sell £18 to £24 million.  Monet’s “Water Lilies” series is amongst the most recognized and celebrated work of the 20^th century.  It had an immense influence over the following generations of artists.  Monet’s other famous series is known as Haystacks.