March 12, 2009--The Art Bubble

What’s wrong with this story?

Harvey S. Shipley Miller still chuckles about the day a few years ago when he called Larry Gagosian to buy a Cy Twombly drawing for a collection of works on paper for the Judith Rothschild Foundation. Mr. Miller explained that other dealers had been flexible on price—the pieces were being acquired by a charity, after all, and ultimately would be part of a collection in the Museum of Modern Art in New York.

“He wouldn’t budge,” Mr. Miller recalls. “So I said, ‘How about $100,000 off?’”

No, Mr. Gagosian replied.

“How about $25,000 off?”

“Nope, I can’t do it.”

“O.K., Larry,” Mr. Miller said, exasperated. “How about $1.00? Can you give us a dollar off?”

“Well, no,” Mr. Gagosian answered. “I’ll tell you what, though,” I’ll buy you lunch.”

“I said, ‘No thanks; I’m on a diet.”

(The full story can be found in the New York Times article linked below.)

The Judith Rothschild Foundation’s mission includes—

A grant program that focuses on encouraging interest in recently deceased American painters, sculptors, and photographers whose work is of the highest quality but lacks adequate recognition. The grant program is dedicated to ensuring that the work of these under-recognized artists has meaningful opportunities for public viewing and critical reassessment.

Larry Gagosian, of course, is the owner of America’s, perhaps the world’s, most successful gallery of contemporary art. His stable includes Julian Schnabel, Jeff Koons, Richard Serra, and Damien Hirst each of whose work he sells for seven and eight figures. As a result, Gagosian is among the wealthiest and most powerful dealers.

So one would think that when approached to be a little charitable, especially in this of all times and for a cause that you think might appeal to him, he would take a little off the price. To quote him, “Well no.”

If you want to get a glimpse of what Gagosian is about, if haven’t looked at Twombly’s drawings recently, you can via the Gagosian Gallery’s website. Most look like they were done by a kid in kindergarten. An untalented one at that who is likely to get left back. They sell for millions.

If you think I’m being nasty, read how Wikipedia describes them:

His best-known paintings of the late 1960s are reminiscent of a school blackboard on which someone has practiced cursive e’s—or (for his paintings of the late 1950s and early 1960s)--hundreds of years of bathroom graffiti.

As I think about Dante’s Inferno these days and who among our contemporaries might be assigned to the 8th or 9th circle, of course Bernard Madoff comes to mind as do a gaggle of banking, insurance, and brokerage house CEOs. But I am also inclined to reserve a place there for Larry Gagosian. Maybe in the 2nd circle.

While waiting for him to receive his just desserts, the good news is that his art bubble too is bursting—auction prices are down and many of the hedge fund managers who fueled the run up in prices (Damien Hirst, for example, not too long ago sold a diamond encrusted skull for a cool $125 mill) are so desperate for cash that they are asking Gagosian to dump some of the goods he hustled to them when times were good; and as a result prices on the art resale market are plummeting.

As the folks who brought you the Great Recession say, it’s all about supply and demand. Sometimes that works out just fine.