Summer reading: The $12 Million Stuffed Shark
A side benefit of the boom has been a stream of new books on the business of art. Given the lack of independently verifiable data, especially about the gallery trade, these books usually promise more than they can deliver. Don Thompson’s The $12 Million Stuffed Shark: The Curious Economics of Art and Auction Houses (until recently available only in the U.K.) is no exception. But it qualifies as recommended reading for anyone looking for a quick overview of how the art world works.
Thompson, an economist and branding expert, undertook a yearlong “journey of discovery” for this entertaining study of the “economics and psychology of art, dealers, and auctions.” By his description, the book “explores money, lust and self aggrandizement of possession, all important elements on the world of contemporary art.” He admits “much of the anecdotal material and some of the numbers in the book are single-source stories and facts,” which are often “embellished in the retelling” and “accepted as fact because they are repeated as fact.” The candor is refreshing. And to be sure, Thompson has a keen eye for the telling statistic.
With these provisos out of the way, and no endorsement of the accuracy of what follows, here is a glossary of facts and figures from the book (all offered by the author without the benefit of direct references or footnotes):
â€¢ “Eight of ten works purchased directly from an artist and half the works purchased at auction will never again resell at their purchase price.”
â€¢ “For a branded dealer in a strong market, there is little financial risk in opening additional galleries. When paintings sell for $50,000-100,000, three sold-out shows pay for leasing and renovating the new gallery.”
â€¢ “Conventional wisdom in the art world is that four out of five new contemporary art galleries will fail within five years. Ten percent of galleries established for more than five years also close each year.”
â€¢ “Only one artist in 200 – and that is 200 established artists – will reach a point where her work is ever offered at Christie’s or Sotheby’s auctions.”
â€¢ “The past twenty-five years have seen a hundred new museums around the world, each intent on acquiring, on average, 2,000 works of art.”
â€¢ “[T]he world of contemporary art is not that big. There are about 10,000 museums, art institutions and public collections worldwide, 1,500 auction houses and about 250 annual art fairs and shows. There are 17,000 commercial galleries worldwide, 70 percent of which are in North America and Western Europe. Average turnover per gallery is about $650,000, implying gross sales for the primary market and part of the secondary market of about $11 billion – of which $7 billion could be considered contemporary art.”
â€¢ “There are approximately 40,000 artists resident in London, and about the same number in New York. Of the total 80,000, seventy-five are superstar artists with a seven-figure income”
â€¢ “In 2006, 810 works of art – all art, not just contemporary art – were auctioned for more than $1 million; of these 801 were sold at one or other of the two [main] auction houses.”
â€¢ The $135 million paid by Ron Lauder for Klimt’s “Portrait of Adele Bloch Bauer I” equals “the price of a fully equipped Boeing 787 Dreamliner, an aircraft capable of holding 300 passengers.”
â€¢ “The number of wealthy collectors is probably twenty times larger today than it was before the 1990 crash.”
â€¢ “Fewer than half of the modern and contemporary artists listed in a Christie’s or a Sotheby’s modern and contemporary auction catalogue twenty-five years ago are still offered at any major auction.”
I would be curious to know if all of these figures sound realistic to Salon members.