The Contemporary Art Market Goes Global : ‘There’s Nothing That Doesn’t Sell’

Now that the contemporary art market has come of age in America, it is about to unleash its capitalistic lure in the Soviet Union.

With contemporary Soviet works estimated to sell for as little as $2,000 each in Sotheby’s July 7 auction in Moscow, the sale is expected to total about $1 million--less than the price of a single painting at recent U.S. auctions--but Sotheby’s has its eye on more than immediate profits.

At the least, the unprecedented sale is a shrewd publicity gesture; at most, a bold and well-timed move into virgin territory. If Western response to the sale is gratifying and if the London-based auction house can organize sequels--two big questions that Sotheby’s administrators dodge with guarded optimism--the Soviet sale could enhance an already flourishing contemporary art market.

And if that new terrain is as fertile as it has been in America, auction experts have reason to be excited. A market that tentatively sprouted in the mid-’60s with Sotheby’s first contemporary art sales now almost routinely harvests million-dollar prices for top American and European artists.

Sotheby’s 1973 landmark sale of 50 works from the Robert C. Scull collection fetched $2.2 million--an astonishing amount at the time but less than half the price paid this year for a major work by Jasper Johns or Jackson Pollock.

Christie’s first big contemporary art sale, organized 10 years ago by Martha Baer, totaled $574,850 for 70 lots. A comparable evening session last month brought $19.8 million for 63 contemporary lots at Christie’s. Individual prices for six works were higher than the entire sale total of a decade ago. At the close of the two-day sale, Baer found that she had masterminded a $22.6-million auction that fetched $4.2 million for a seminal work by Johns--a record for a living artist.

“I was just flabbergasted. I had never seen such active bidding. What was so surprising was to see how strong the market is,” Baer said in an interview after the gold dust had settled.

Christie’s success with contemporary art echoed even bigger news at Sotheby’s, where a $33.5-million auction in May included a $4.8-million drip painting by Jackson Pollock, the most expensive contemporary artwork ever sold at auction.

According to Baer, the dramatic growth is the payoff of a long, careful process. “In the beginning it was important to market paintings properly and not kill the goose that laid the golden egg,” she said. “Auction houses had to be responsible about putting up for sale only those works that make artists look very special to create a market for them. I held off offering a Morris Louis ‘Unfurled’ until I had a special one.

“It’s also important not to offer an inferior example at a higher price than it’s worth,” said Baer, who often counsels sellers about realistic prices and the most advantageous time to winnow their collections. Auction house experts always have their feelers out for future sales and they know that landing one great piece makes it easier to get others because sellers like to see their works in good company.

“It’s still difficult to find enough of quality, but it has improved,” Baer said. “Nine or 10 years ago it was harder to convince a collector to sell at auction--or to sell, period. And contemporary art was so new. The galleries that showed it paid their bills with resales (of older work). Now there’s nothing that doesn’t sell.”

Lucy Mitchell-Inness, head of Sotheby’s New York contemporary art department, attributes the market’s rise to an explosion of collectors. They have few common characteristics, she said, “There are just more of them.”

“Expansion in collecting has taken place across the board (of the art market), but I think there’s a certain buzz going on in contemporary art that is unique,” Baer said. “Usually, you get two or three major new collectors every few years and a few drop out. Now there are many new ones. Some have come into money or they have moved from other fields into contemporary art because it is more accessible and the prices are less frightening than Impressionism.”

Encouraged by a favorable exchange rate, many new buyers are Europeans and Japanese, but experts say there also has been a boom across the country. “Most contemporary art is still being bought by private American collectors, but there’s much more participation from the Midwest and West Coast. Most of the objects we sold in the spring were to people who live outside New York City, though New York collectors and dealers were healthy underbidders,” Baer said.

This comes as no surprise to Los Angeles observers who have watched a boom in museum building and dozens of new galleries sprout along La Brea Avenue and in Santa Monica. “I saw the growth in living color at MOCA,” said Eli Broad, a major collector and founding chairman of Los Angeles’ Museum of Contemporary Art.

“We probably have five times the contemporary art collectors we had two decades ago, and three times what we had when MOCA was founded. That’s also true in Manhattan. People want to be part of the current scene, going to galleries, studios and museums.”

Auctions represent a small part of that complex scene, but they assume disproportionate importance because they are the only public record of art sales and thus influence prices in private galleries. Dealers who once bought stock at auction now find themselves bidding on behalf of clients--and they often complain of being priced out of the market.

“People couldn’t get enough of it,” said Los Angeles dealer Margo Leavin, who watched the May sales with amazement. “But if you tried to interest some of them in a $2,000 work by a young artist, they would walk out of the gallery.”

Admitting that the young and vital contemporary art market has rebounded with extraordinary fervor after the October stock market crash, some dealers and collectors are predicting a leveling-off period if not a decline in prices.

“The rise has been too fast,” said Broad. “Warhol mania and the St. Vincent’s sale (a charity event in New York to benefit AIDS patients) somehow created a frenzied, aberrational atmosphere (in the May sales).” A willing participant in the excitement, Broad bought a Richard Artschwager sculpture for $85,000 that he suspects he could have had for $60,000 six months earlier.

“Some might argue that this was a catch-up period for contemporary art,” which has escalated along with the rest of the art market but failed to rise as fast as Impressionism, Broad said. “I don’t believe that. There is solid growth, but we may have reached the high-water mark. I don’t think we will see continual acceleration. We are due for a plateau period and I think that will be healthy.”

Television producer and collector Douglas S. Cramer agrees. Recently returned from a trip with other major collectors, he reported “a unanimous feeling that collectors with integrity are not going to pay these prices. I was in London (looking at art) with (advertising magnate and art collector) Charles Saatchi. Over and over again, he said, ‘I can’t buy at these prices, and I won’t.’ ”

Cramer, a vice president of MOCA’s board of trustees, said he has bought modern pieces at auction over the years at what he considers reasonable--even bargain--prices, but he made no purchases in the big-ticket sales this spring. “I bid on 12 different pieces, but stopped,” he said. “As tough as it is for someone who doesn’t like losing, I draw the line. You have to--unless you have unlimited amounts of money.”

Auction house officials agree that prices have soared in the past few years, but argue that growth in the market has been a steady process and that high prices only reflect the improved quality of contemporary art offered at auction. “The market has grown enormously in the last five or six years, but it has been a consistent vertical climb,” said Mitchell-Inness. “The prices were not inflationary in the May sales; buyers simply recognized how important those paintings are.

“When a great ‘50s figurative painting by Richard Diebenkorn came up this year, collectors were very quick to recognize that there had been nothing of the kind on the market for years,” Mitchell-Inness said. Estimated at $500,000-$600,000, Diebenkorn’s “July” sold for $1.2 million.

Looking ahead, Baer already has “one exciting picture” lined up for her November sale (but declined to identify it) and is working on others. “We can’t depend on the market holding this strong in the fall,” she said, “but there is a lot of proof that this is not a quirk but just a steady buildup. And the market is so international now that it won’t fall if one sector gets out. There are too many players. “

If the players show up in Moscow with open checkbooks, the contemporary art market will have moved one step closer to achieving global status.

MILLION DOLLAR CONTEMPORARY ARTWORKS AUCTIONED IN THE UNITED STATES

Price in millions Year of dollars Artist Title 1983 1.2 million Willem de Kooning Two Women (1955) 1.8 million Mark Rothko Black, Maroon, White 1984 2.0 Willem de Kooning Two Women (1953) 1985 1.6 Barnett Newman Ulysses 1.5 Willem de Kooning Ruth’s Zowie 1986 3.6 Jasper Johns Out the Window 2.1 James Rosenquist F-111 1.3 David Smith V.B. XXIII 1.1 Jacques Lipchitz Figure 1987 3.6 Willem de Kooning Pink Lady 2.5 Willem de Kooning Woman (Green) 1.8 Francis Bacon Study for Portrait II 1.4 Francis Bacon Portrait of George Dyer Talking 1988 4.8 Jackson Pollock Search 4.2 Jasper Johns Diver 3.5 Jackson Pollock Number 31 1.9 Franz Kline Ninth Street 1.4 Andy Warhol 210 Coca-Cola Bottles 1.2 Richard Diebenkorn July