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by Jerome Weeks 21 Nov 2008

In case you didn’t notice, the art market has crashed. The price disparity between the good and the great has widened to “humongous.” And most of what’s up for auction is only average. But that’s leading to re-thinking the whole art auction process: “The “recipe for all the auction houses has changed,” said Michael McGinnis […]


“The “recipe for all the auction houses has changed,” said Michael McGinnis of Phillips de Pury auctioneers, in the wake of sales last Thursday and Friday in which only about 60% of the art the company put on the block sold. All the auctioneers are likely to focus on “volume control,” offering more “focused, targeted” sales at the next big round of auctions next spring.

They’re also likely to push more of the risk of selling art onto collectors. In recent years, in a booming market, auctioneers often offered sellers guarantees of minimum amounts — but the auction house would profit on the upside. Mr. Ruprecht told the analysts that “going forward, we will generally not be using our capital for guarantees.”

“History suggests that the economic decline could mean a boom time for the arts. During the Great Depression, Americans turned to the movies and live theater as a refuge from the bleak events that filled their everyday lives. Back then, however, they didn’t have television, Netflix, the Internet or video games as inexpensive entertainment options.

“Theaters were packed; people needed diversion, excitement,” said Pedro Reis, founder of Circus Sarasota. “They needed color to get away from this drab depression. And they will need it now.”

That may explain why some area arts leaders expressed cautious optimism about their ability to attract audiences this season, though many of them have seen subscription sales flatten or drop slightly.

That may be attributable to a growing trend nationally away from season subscriptions and toward single tickets, as people plan their activities closer to the date of events. The decline in subscription sales impacts the operation of organizations that have traditionally collected the bulk of their income in the period after subscription renewals begin.”

“During the market upheavals of recent weeks, spot gold prices bobbed at around eight hundred dollars per ounce. The best Stradivarius violin, on the other hand, could have gone for something like seven hundred and fifty thousand dollars per ounce. That’s twelve million dollars for an avoirdupois pound of wood, if you want to be crude about it, and why shouldn’t you, these days? In this and in other ways, the great violins are, ounce for ounce, among the most valuable commodities in the world. There is even a Web site called stradivariinvest.com. Almost alone among investments, important violins have proved immune to economic downturns. Auction prices for Stradivariuses have increased from about two hundred thousand dollars in 1980 to about three million dollars today.”