The ideally expensive thing
Susan Moore on how the Americans have become net sellers of works of art
Junius Spencer Morgan caused a sensation in 1876 when he paid the staggering sum of £10,100 — more than the National Gallery of London’s annual purchase grant — for Gainsborough’s celebrated portrait of Georgiana, Duchess of Devonshire. Since then a seemingly interminable line of nouveaux-riches American ‘Despoilers’ has relieved the impecunious (and often only too willing) European aristocracy of the art treasures their ancestors had amassed over the centuries. The phenomenon prompted the foundation of the National Art Collections Fund in Britain in 1903 to help save such treasures for the nation, and was subtly dissected by Henry James eight years later in The Outcry. Revealingly, the essence of James’s acquisitive American, Mr Breckenridge Bender, was his desire for ‘an ideally expensive thing’. He had ‘no use’ for Lord Theign’s £10,000 Moretto; he was out to spend millions. He had come to England to bag the prized Sir Joshua.
It is a familiar enough story. Only now it is the Reynolds that costs the equivalent of £10,000 and, almost inconceivably after more than a century of hoovering up masterpieces major and minor, it is the Breckenridge Benders that are selling up. Astonishingly, the Americans have turned from being net buyers of works of art into net sellers. America is, so to speak, the new Europe.
According to The European Fine Art Foundation’s (TEFAF) latest report, ‘The International Art Market: A Survey of Europe in a Global Context’, which includes dealer as well as auction sales, the tide turned in 2006. Sotheby’s own figures put it earlier (its privately owned rival Christie’s is not obliged to publish its accounts). The US auction house revealed that Americans have been selling more than they have been buying since 2005, with the original negative value of $106 million quadrupling the following year and rising to $702 million last year. This marks a watershed in the history of the western art market, for the transatlantic flow of works of art has reversed. According to Sotheby’s, the flow of art into the UK has risen tenfold since 2005 to $734 million last year. Art treasures are not, however, returning to the walls of Lord Theign’s Dedborough Place. What has loosened them from their often illustrious old money American moorings is the seemingly inexhaustible supply of even newer money from Russia, China, the Middle East and India. A perfect illustration is Gauguin’s ‘Te Poipoi (Le Matin)’, which sold from the collection of the late Joan Whitney Payson at Sotheby’s New York last November to the Hong Kong property tycoon Joseph Lau for $39 million. Petrodollars, however, favour London.
Long in danger of turning into a sleepy market backwater, London has been revived as a great international art entrepot. As the British government is only too aware, it has also become the preferred place of domicile of a significant number of the world’s newest rich — or at least the place in which they keep their works of art. (Given the draconian export laws in their own countries, most Russian and Indian collectors choose to buy and keep their art overseas.) In fact, probably not since the likes of John Pierpont Morgan (son of Junius) and Henry Clay Frick assembled their picture collections in London to avoid the 20 per cent US import tax on works of art (books were excluded) has the capital offered refuge to so many distinguished foreign collections.
The main difference between now and the mid-20th century, however, when London was at its height as an art market, is the scale and breadth of the market itself. Never before have so many people from so many places around the globe competed to buy works of art. The art market is no longer simply international but global, and it is expanding at an extraordinary pace. Five years ago, for instance, Sotheby’s top clients — those spending over $500,000 — originated from 36 countries; now they come from 58. The TEFAF report records the market’s recent growth in terms of both transactions and value, the latter an astonishing 95 per cent between 2002–6 and rising from a global value of 26.7 billion euros to a record 43.3 billion euros. Striking, too, is the fact that China has now ousted Switzerland from its long-time ranking as the world’s fourth largest national art market, and is just 1 per cent behind France in terms of market share. Its domestic auction market grew by a staggering 983 per cent between 2005 and 2006.
Clients from these emerging markets are being carefully nurtured by the world’s leading auction houses and dealers. Christie’s, for instance, has pioneered sales in mainland China and Dubai. Buyers from Russia, China, the Middle East and India accounted for 20 per cent of Sotheby’s turnover last year. In what is in effect another sea change in the market these buyers are moving on from acquiring only their own art, with the Russians already making a significant impact on a range of key international markets, from jewellery to Impressionist, modern and contemporary art, Old Masters and furniture. Jussi Pylkkanen, president of Christie’s Europe, estimates that Russians are now spending twice as much in other collecting areas as they spend on Russian art. ‘They have a tradition of collecting, and they have the confidence to buy at the top level,’ he says. ‘Like many new collectors in Asia and the Middle East, they don’t look at benchmarks set by previous sales.’ Buyers of Russian origin accounted for 15 per cent of lots at Sotheby’s London evening sale of Impressionist & Modern Art in February this year, including the top lot, Franz Marc’s ‘Grazing Horses III’. That sold for a record £12.3 million against an estimate of £6 million to £8 million. Given the huge record price ($72.8 million) paid at Sotheby’s New York last May for Rothko’s not universally admired ‘White Center (Yellow, Pink and Lavender on Rose)’ — a picture consigned by another legendary American blue-blood, David Rockefeller — it is tempting to presume that it, too, went to a client from one of the emerging markets.
Unlike his earlier European counterparts, Mr Rockefeller was not selling a major picture because he needed the money but because he realised that he could do some significant charitable work with the proceeds. It was the irresistible lure of extravagant sums that prised the painting off his wall nonetheless. One has a sense that, just like Breckenridge Bender, today’s newest buyers are interested in the ideally expensive thing.
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