5th Week The “Scratchy” market

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Art market report

The “Scratchy” market

Making sense of the art trade during Frieze week

Oct 20th 2010

THIS year's Frieze Art Fair went head-to-head for the first time with London 's contemporary auctions. The fair, which ran from October 13th to the 17th, has restructured the seasonality of the art market to the extent that “Frieze Week” has become art-world shorthand for mid-October. “It's nice if others use the term, but we don't. It's not right to brand other people's efforts,” explains Matthew Slotover, the fair's co-director. “In emerging territories [eg, China], the auctions have gone in first and warmed the market,” he adds. “But in London, the October sale season was heated up by the fair.”

Frieze sees 60,000 visitors, but only 5,000 of them are VIPs, roughly 2,000 of whom buy art. As usual, the fair featured new work by living artists, with a few fun exceptions such as the early 20th-century drawings of Francis Picabia and the 1970s photographs of Sigmar Polke on the Michael Werner stand. Visually, Frieze saw more large-scale works and fewer gewgaws for one's pied-a-terre. For prices, the “sweet spot” was below $100,000, according to Josh Baer, author of the Baer Faxt, an art industry newsletter.

Market intelligence is anecdotal because business varies dramatically among the 173 galleries that participate, and Frieze does not collate sales data for public consumption. Instead, it maintains the polite etiquette of its eponymous art magazine, which avoids discussions of anything as crass as finances. Hiscox Ltd, the insurer of 40% to 50% of the stands, estimated that the big tent in Regent's Park contained $375m worth of art, according to Bloomberg's Scott Reyburn. How much of it was sold is anybody's guess.

British gallerists laid claim to the most remarkable turnovers. Many said that it was their most lucrative Frieze ever; some declared that they had three times the sales volume of last year. Perhaps Frieze's clientele is more familiar with their wares and maybe these dealers are inclined to over-report. No doubt they want to encourage the increased footfall and fanfare that the event brings to their galleries elsewhere in the city.

Auction spectacles offer blatant facts and figures if not entirely transparent ones. Christie's and Sotheby's evening sales were held on the Thursday and Friday of Frieze week, respectively. Phillips de Pury, a smaller auction house that specialises in contemporary art, squeezed its evening sale into Wednesday, to overlap with the Frieze VIP opening. The results were positive all round. Christie's had the strongest auction, achieving a total of ￡19.6m ($31m) with five record prices. Sotheby's made ￡13.3m with four artist records, while Phillips made ￡6.6m and three records. Altogether the evening sales were substantially stronger than last year.

“The market has moved beyond recovery mode,” said Oliver Barker, the auctioneer of Sotheby's sale, adding that their 39 lots had been curated especially for Frieze week when “collectors are bombarded with a menu of possible collecting options” and need the lure of louder, sexier works. Similarly, Francis Outred, Christie's European head of post-war and contemporary art, explained that Christie's had constructed a younger sale in order to “give collectors of emergent art the evening sale experience.” Mr Slotover, by contrast, hoped that the auctions gave collectors another reason to come to London without cutting into the revenues of his exhibiting galleries.

One dealer sometimes mistaken for a collector who was active at both the fair and the auctions is Charles Saatchi. The ex-adman's approach to art mixes speculation with marketing. He buys work by young artists from around the world, often with the use of foreign advisors. After he exhibits the work in snazzily packaged shows in his Chelsea gallery, he puts it on the block. Most of the art is sold by Phillips, which underwrites the free admission policy of the Saatchi Gallery in return for art consignments. Mr Saatchi was responsible for 23% of the lots (13 works) in Phillips's evening auction. Additionally, he contributed at least two paintings to Christie's and five works to Sotheby's evening sales. These 20 evening lots were followed by an onslaught of day sale material.

Sometimes Mr Saatchi's process results in record prices, in part because the artists in question have never appeared in evening sales before. For example, lot 15 of Christie's sale, Kelley Walker's “Black Star Press”, a Warholian race riot with chocolate splotch silkscreens, which was part of Mr Saatchi's “USA Today” show, achieved ￡385,250. And lot 2 of Sotheby's sale, Ahmed Alsoudani's 2007 painting, depicting the ransacking of the Baghdad Museum and exhibited in “Unveiled: New Art from the Middle East”, achieved ￡289,250. (Mr Alsoudani was born in Baghdad and became an American citizen while studying art at Yale. The news that he will represent Iraq at the Venice Biennale next June has validated him further.)

Despite these successes, some are grumbling about Mr Saatchi's business practices. Five years ago, London art dealers used the information that the tycoon, who some call “Scratchy”, had purchased their artists' work as part of their sales pitch. Mr Saatchi was thought to have a prescient eye and a Midas touch. But nowadays many gallerists try to avoid selling to him because they know it means their artists' works will shortly hit the auction block, introducing unwelcome volatility into their markets. However, Mr Saatchi is not someone who takes no for an answer. Bullying would appear to be a standard response. For example, when New York's Team Gallery refused to sell Mr Saatchi two photographs by Ryan McGinley at Frieze, an angry phone call ensued. One of Mr Saatchi's staff threatened to offload at auction the seven McGinleys that he already owns, according to Jose Freire, Team Gallery's owner. It's a tactic that hardly fosters faith in his “collection”. The power to validate requires a measure of credibility and commitment. Moreover, the velocity with which Mr Saatchi buys and sells is at risk of making his provenance akin to eBay.

The competition between art fairs and auctions is fraught with misunderstanding. Mr Saatchi has successfully exploited his position as a middleman between these middlemen. It's a clever place from which to play the art market as long as his behaviour appears dignified rather than desperate. There is a surprisingly fine line between being a conniving jerk and a cool mastermind.