End Notes
Chapter 1:
1. Javier Pes, Jose Da Silva, and Emily Sharpe, “Visitor Figures 2015: Jeff Koons Is the Toast of Paris and Bilbao.” The Art Newspaper, March 31, 2016. The top ten museums were the Louvre (8,600,000), British Museum (6,820,686), Metropolitan Museum of Art in New York (6,533,106), Vatican Museums (6,002,251), National Gallery in London (5,908,254), National Place Museum in Taipei (5,291,797), Tate Modern (4,712,581), National Gallery of Art in Washington, DC (4,104,331), State Hermitage Museum (3,668,031), and Musee d’Orsay (3,440,000).
2. To learn more about the state of museums worldwide, a good place to start is a five-part series published by the Economist in 2013. You can find the series by searching for the lead article: “Temples of Delight,” The Economist (US), December 21, 2013.
3. “Art Museums By the Numbers 2015.” Association of Art Museum Directors. January 7, 2016.
4. Ibid, p. 6.
5. My profile of CJ is based on a studio visit and interview I did with her in August 2016.
6. Matthew Giles, “Swizz Beatz Wants to Change the Art World,” Vulture, November 25, 2014.
7. Daniel Scheffler, “Waxing Lyrical,” Cultured, April/May 2016, 172–75.
8. A 2011 show at the Pushkin Museum in Moscow titled Inspiration Dior explored the links between the House of Dior and artworks dating back to the nineteenth century.
9. Rory Carroll, “James Turrell: ‘More People Have Heard of Me through Drake than Anything Else’” The Guardian, November 11, 2015.
10. Based on data published in Javier Pes and Emily Sharpe, “Visitor Figures 2014: The World Goes Dotty Over Yayoi Kusama,” The Art Newspaper, April 2, 2015. I used total attendance, rather than average attendance per day, to select the top shows.
11. For more on the ownership structure of the DIA, see Chapter 8 in Nathan Bomey’s excellent book Detroit Resurrected: To Bankruptcy and Back (New York: W. W. Norton & Company, 2016). Many museums receive funding from the municipality in which they are located, but the municipal government does not own the collection. By way of example, the Brooklyn Museum, the Whitney Museum, and the Met Museum all receive funding from the City of New York. But if New York City declared bankruptcy, the city would not have a claim on the art owned by these institutions.
12. Ibid, Detroit Resurrected, p. 123.
13. Email exchange with Buckfire, July 18, 2016.
14. I created this list by starting with names of popular living artists culled from a variety of sources. I then used Instagram to find the official Instagram site for each artist.
15. For some artists, the number shown is a sum of multiple hashtags (e.g., #picasso and #pablopicasso). I created this list by starting with names of approximately fifty artists culled from lists of the most famous paintings in the world, art history books, etc. This table shows the top ten names from my initial list.
Chapter 2:
1. Anna Jozefacka, “Index of Historic Collectors and Dealers of Cubism: Gianni Mattioli,” The Metropolitan Museum of Art, January 2015.
2. Amy Qin, “Chinese Taxi Driver Turned Billionaire Bought Modigliani Painting,” The New York Times, November 10, 2015.
3. Patti Waldmeir, “Lunch with the FT: Wang Wei,” London Financial Times, January 29, 2016.
4. Clare McAndrew, TEFAF Art Market Report 2016 (Helvoirt: European Fine Art Foundation, 2016).
5. Ibid, TEFAF, p. 15.
6. Ibid, TEFAF, p. 83.
7. Ibid, TEFAF, chapter 2.
8. Ibid, TEFAF, p. 173.
9. Ibid, TEFAF, p. 205.
10. Ibid, TEFAF, p. 210
11. Luisa Kroll, “Inside The 2015 Forbes 400: Facts and Figures About America’s Wealthiest.” Forbes, September 29, 2015.
12. Data on educational attainment is collected by the US Department of Labor, Bureau of Labor Statistics. The information referenced in the text is available on their website at https://www.census.gov/hhes/socdemo/education/data/cps/historical/.
13. A recent entrant to the art-backed lending market is Athena Art Finance, a nonbank financial institution.
14. For more on Bellini’s time in Constantinople, see Caroline Campbell, Alan Chong, Deborah Howard, J. M Rogers, and Sylvia Auld. Bellini and the East (New Haven, CT: Yale University Press, 2005) and Julian Raby’s article “A Sultan of Paradox: Mehmed the Conqueror as a Patron of the Arts.” Oxford Art Journal 5, no. 1 (1982): 3–8.
15. I decided to make an educated guess on what this number may be. Artnet published a study of the top one hundred living artists based on total sales at auction from January 1, 2011, to October 15, 2015. The artists at the bottom of the list had total sales of approximately $21 million, or approximately $4 million a year over the period of the study. While this is the resale market, I think it is safe to assume that all of these artists are making at least $1 million a year selling new work. But what about artists not on this list? Assume an artist has a gallery show every other year and that the artist splits sales fifty/fifty with the gallery. She would need to sell $4 million of new work every other year in order to take home on average $1 million a year. My guess is that no more than five hundred artists in total meet this hurdle.
16. The acceptance rates are from Peterson’s, the online guide to undergraduate and graduate programs.
17. Holland Cotter, “To Bump Off Art As He Knew It,” The New York Times, February 12, 2009.
18. Ibid, TEFAF, p. 43.
19. For more on the sordid tale of collusion, see Christopher Mason, The Art of the Steal: Inside the Sotheby’s-Christie’s Auction House Scandal (New York: G.P. Putnam’s Sons, 2004).
20. Compensation arrangements with art advisors vary widely. Some charge an hourly fee, perhaps with a monthly retainer, while others charge project-based fees. Some may prefer to work on a commission basis, perhaps charging 10 percent on the purchase price of all work that a collector buys over a specified time period. There is no right answer, except for the advisor and client to talk through compensation arrangements and document them to avoid tears later in their relationship.
21. Meryle Secrest, Modigliani: A Life (New York: Alfred A. Knopf, 2011).
22. Ibid, p. 70.
23. Eileen Kinsella, “Who Are the Top 100 Most Collectible Living Artists?” Artnet News, October 27, 2016.
24. Based on information from gallery websites as of July 2016.
25. Alfred Taubman wrote a memoir about his life in business, including his Sotheby’s experience. Threshold Resistance: The Extraordinary Career of a Luxury Retailing Pioneer (New York: Collins, 2007).
26. Sotheby’s Third Quarter 2015 Earnings Call Outline, November 9, 2015, p. 7. Available on the Sotheby’s Investor Relations website.
Chapter 3:
1. Peter Plagens, “Which is the most influential work of art of the last 100 years?” Newsweek, June, 23, 2007.
2. We all fall in love with certain literary devices. The prologue to Coming Apart, Charles Murray’s provocative book from 2012, was my inspiration for how to tell the story of Ethel and Robert Scull.
3. Such as the Sidney Janis Gallery, Pace Gallery, Andre Emmerich Gallery, Cordier and Ekstrom, Grace Borgenicht Gallery, Fourcade and Droll, and Marlborough Gallery.
4. The painting is now in the collection of the Birmingham Museum of Art.
5. The best book on the history of the Scull’s collection is Judith Goldman, Robert & Ethel Scull: Portrait of a Collection (New York: Acquavella Galleries, 2010).
6. For example, Israel Shenker, “Amy Vanderbilt Instructs Scull’s Angels in Etiquette,” The Telegraph, September 25, 1973.
7. Tom Wolfe, The Pump House Gang (New York: Farrar, Straus & Giroux, 1968), chapter 9.
8. Goldman, Robert & Ethel Scull, p. 18.
9. For Ethel’s take on events, read Marie Brenner, “The Latter Days of Ethel Scull,” New York Magazine, April 6, 1981, p. 22–26.
10. Goldman, Robert & Ethel Scull, p. 10.
11. For a description of the film and its making, see Baruch Kirschenbaum, “The Scull Auction and the Scull Film,” Art Journal 39, no. 1 (Fall 1979), p. 50–54.
12. Barbara Rose, “Profit Without Honor,” New York Magazine, November 5, 1973, p. 80–81.
13. Carol Vogel, “Works by Johns and De Kooning Sell for $143.5 Million,” The New York Times, October 12, 2006.
14. Kelly Crow, “Billionaire Ken Griffin Paid $500 Million for Pollack, De Kooning Paintings,” The Wall Street Journal, February 25, 2016.
15. The Baylson’s shared the story behind their collection in an essay published in John Bidwell, Graphic Passion: Matisse and the Book Arts (University Park, PA: Pennsylvania State University Press, 2015).
16. Ibid, p. 3.
17. Ibid, p. 6.
18. Ibid, p. 6–7.
19. Brian Moylan, “Jho Low: Manhattan’s Mysterious Big-Spending Party Boy,” Gawker, November 10, 2009.
20. Louise Story and Stephanie Saul, “Jho Low, Well Connected in Malaysia, Has An Appetite for New York,” The New York Times, February 8, 2015.
21. Katya Kazakina, “Flashy Malaysia Financier Said to Sell Picasso at Loss,” Bloomberg.com, February 12, 2016.
22. Tom Wright, “Malaysian Financier Jho Low Tied to 1MDB Inquiry,” The Wall Street Journal, July 9, 2015.
23. “Follow the Money, If You Can,” The Economist, March 5, 2016.
24. United States of America v. Real Property, United Sates District Court for the Central District of California, CV 16-5371, filed July 20, 2016, p. 6.
25. Bradley Hope, John R. Emshwiller, and Ben Fritz, “The Secret Money Behind ‘The Wolf of Wall Street,’” The Wall Street Journal, April 1, 2016.
26. Kelly Crow and Bradley Hope, “1MDB Figure Who Made a Splash in Art Market Becomes a Seller,” The Wall Street Journal, May 19, 2016.
27. Third Point reported in its February 26, 2016, 13D filing that it spent $294,295,244 to acquire 6,660,925 shares of Sotheby’s stock. In its October 2013 13D filing, it referenced earning $10,064,347 on a swap deal. After netting out the swap gain, Third Point paid $42.67 per share to acquire its stake in Sotheby’s.
Chapter 4:
1. See Jerry Saltz, “This Is The End,” Arts Magazine, September 1988, 19–20, for a review of Wool’s first show of word paintings.
2. Jerry Saltz, “Zombies on the Walls: Why Does So Much New Abstraction Look the Same?” New York Magazine, June 16, 2014.
3. Peter Schjeldahl, “Writing On The Wall,” The New Yorker, November 4, 2013, p. 108–09.
4. Hans Werner Holzwarth, Eric Banks, and Christopher Wool, Christopher Wool (Cologne, Germany: Taschen, 2012), p. 97. From the essay by Jim Lewis, “There are about 75 word paintings by Christopher Wool, and while they form a complete—and probably closed—corpus there are variations among them, differences in size and method, in theme and ostensible content.”
5. For more on the controversy around Modigliani catalogue raisonnés, see Patricia Cohen, “A Modigliani? Who Says So?” The New York Times, February 2, 2014, and Marc Spiegler, “Modigliani: The Experts Battle,” ARTnews, January 2004.
6. Art forgers are skilled not only in painting fakes but also in creating fake documents and narratives. Wolfgang Beltracchi had a long career as a forger of German Expressionist and Surrealist paintings, supported by his wife Helene. For one of their scams, they staged a photo shoot where Helene impersonated her grandmother, the supposed owner of the fake paintings that were hanging on the wall behind her. The black-and-white photographs were then printed slightly out of focus on prewar developing paper. To learn more about this and other scams perpetuated by the couple, see Joshua Hammer, “The Greatest Fake-Art Scam in History?” Vanity Fair, October 10, 2012.
7. Donald Judd, “Reviews and Previews: New Names This Month – Yayoi Kusama,” ARTnews, October 1959.
8. This quote is from the website GoodReads.
9. Leaving the Magritte market aside, when a work of art is submitted to an authentication committee, the owner typically signs a contract and waiver. This gives the committee the right to inspect the work and render its opinion. It also releases the committee from any claims the owner may subsequently make against the committee if the owner disagrees with its judgment. Some committees stipulate they will only make affirmative statements about an object and reserve the right to return the work to the owner with no statement whatsoever either confirming or denying its authenticity. Other authentication committees take a much tougher stance on fakes, including reserving the right to stamp the back of the work with a statement saying it is not authentic, retain the work indefinitely, or destroy it. In France, the legal rights of authentication committees are enshrined in law. But this is not true in the United States. As a result, some authentication committees have disbanded to avoid legal risk they felt they were taking on when rendering opinions (e.g., the Andy Warhol and Keith Haring Foundations).
10. Liyan Chen, “Billionaire Art Collector Wilbur Ross Loves Magrittes, Paid $100 Million for His Own,” Forbes, October 8, 2013.
11. Based on an Artnet database search.
12. Collectors could also buy a gouache by the artist. Many are finely crafted and involve imagery that is on par with some of his best paintings. There is far greater parity in value between his works on paper and paintings than for almost any other artist.
13. Jonathan Laib, Charlotte Perrottey, and Charlie Adamski, Ruth Asawa: Objects & Apparitions (New York: Christie’s, 2013), p. 5, in the essay by John Yau titled “Ruth Asawa: Shifting the Terms of Sculpture.”
14. Daniell Cornell, The Sculpture of Ruth Asawa: Contours in the Air (San Francisco: Fine Arts Museums of San Francisco, 2006).
15. Museum of Modern Art, “MoMA Presents the Most Comprehensive Retrospective to Date of Contemporary Painter Elizabeth Murray,” News release, October 2005.
16. Per Pace Gallery website about the artist.
17. Fair market value (FMV) has a precise definition. As defined by the Internal Revenue Service, it is the price a willing buyer and a willing seller would agree to in an open market, where neither is required to act and both have reasonable knowledge of the relevant facts. FMV is different from the replacement, or insurance value, of an artwork. Because the insurance value is what it would cost to replace the work immediately, it is generally higher than the FMV.
18. Matisse, for example, was an especially prolific draftsman who made thousands of drawings. They range in quality from the great to the mediocre and are priced accordingly. In 2014 and 2015, ninety-seven drawings by the artist were for sale in New York and London auctions held by Sotheby’s, Christie’s, and Phillips. A large charcoal drawing from 1939 of a sleeping young woman with an elaborately embroidered Romanian blouse sold in November 2015. It encapsulated many of the motifs for which the artist is best known. It sold for $3.8 million, the highest price paid during this two-year time period for a drawing by the artist. At the other end of the spectrum, twenty-one drawings sold for less than $50,000. They were smaller, workaday pieces with an awkwardness rather than the lithe, effortless quality for which the artist is known.
Chapter 5:
1. Galleries will sometimes permit a client to trade in a lower value work (at its current fair market value) to help finance the purchase of a more valuable work.
2. At Phillips, for example, buyers pay an additional 25 percent on the hammer price up to and including $200,000; on the incremental hammer price between $200,001 and $3 million, buyers pay an additional 20 percent and 12 percent thereafter.
3. Information on limited warranties are available on auction house websites and in the endnotes to auction catalogues.
4. One minor exception: some regional auction houses may charge buyers an extra fee for bidding online, which is odd because generally doing something online costs less.
5. The lawsuit was filed on August 26, 2013, in the New York Civil Supreme Court, Michael P. Schulhof, as executor of the Estate of Hannelore B. Schulhof, versus Lisa Jacobs individually and doing business as Lisa Jacobs Fine Art. All of the documents associated with this case are available online by going to the New York State Unified Court System website (https://iapps.courts.state.ny.us/webcivil/ecourtsMain) and searching for either Schulhof, Michael P. vs. Jacobs, Lisa, or the index number for the case, which is 157797/2013.
6. Affidavit of Plaintiff Michael P. Schulhof, as executor, in Support of Motion for Summary Judgment, filed on August, 1, 2016, p. 4.
7. I have relied on Joseph Berger’s account of what happened as reported in “House Painter Is Charged in Long Island Art Thefts,” The New York Times, May 6, 2013.
8. Josh Saul, “House Painter Gets Slap on Wrist in Art Thefts,” New York Post, November 7, 2014.
9. Schulhof affidavit, p. 5.
10. Ibid, 18.
11. District Judge Paul G. Gardephe issued a preliminary ruling on September 30, 2013, where he references this important letter. See p. 56 of his ruling.
12. United States Attorney’s Office for the Southern District of New York, “Art Dealer Pleads Guilty in Manhattan Federal Court to $80 Million Fake Art Scam, Money Laundering, and Tax Charges,” News release, September 16, 2013.
13. Laura Gilbert and Bill Glass, “Former Director of Scandal-Beset Knoedler Gallery Breaks Her Silence,” The Art Newspaper, April 18, 2016. See the update section at the end of the article.
Chapter 6:
1. “Andy Williams: An American Legend,” Christie’s press release, New York, February 8, 2013.
2. Many articles have been written about Accidia Foundation v. Simon C. Dickinson Limited. I drew heavily on the following article for a description of the facts in the case: Jo Laird, Burke Blackman, and Peter J. Schaeffer, “Dealing in Hidden Risk: Agency and Fiduciary Liability in the Dealer-seller Relationship,” Lexology, August 28, 2012.
Chapter 7:
1. Forms of regulation include export licensing rules, preemptive rights that give public museums the right to buy artwork, and rules that restrict sales of cultural property to individuals or institutions in the domestic market. For more on this topic, see Clare McAndrew, Fine Art and High Finance: Expert Advice on the Economics of Ownership (New York: Bloomberg Press, 2010), pp. 161–96.
2. The purchase price was reported in “Controversial Sale from NRW: Warhol Images Bring 150 Million.” Spiegel Online, November 13, 2014.
3. For more on the topic, see an excellent article by Alexander Forbes and Isaac Kaplan, “What Germany’s Strict New Regulations Mean for the International Art Market,” Artsy, July 12, 2016.
4. If shipped inside the EU, then the thresholds are 300,000 Euros and the work must be at least seventy-five years old.
5. Because many German artists protested the proposed rules, the government added provisions to the legislation at the last minute granting living artists the right to approve whether artworks they created are added to the export ban list.
6. Forbes and Kaplan, “What Germany’s Strict New Regulations Mean,” in the section of the article titled “A Mass Exodus of Artwork.”
7. Julia Halperin and Ermanno Rivetti, “Time for Italy to Reverse Its Art Export Laws,” The Art Newspaper (London), October 2014, p. 1.
8. Stephanie Kirchgaessner, “The Reasoning Was Crazy - How Italy Blocked the Sale of a Dali Painting,” The Guardian, December 7, 2015.
9. Hugo Lopez Coll, Luis Torres, and Guillermo Miranda, “In Love with Diego or Frida? A Brief Look at Mexican Art Regulations,” Greenberg Traurig Blog, November 26, 2014.
10. See the US Fish and Wildlife Service website for more details on the law.
11. For historical works, there are different federal, state, and international rules governing the transport and sale of art and objects, such as antiquities, Native American and pre-Columbian objects, elephant ivory, and rhino horn.
12. Patricia Cohen, “Art’s Sale Value? Zero. The Tax Bill? $29 Million,” The New York Times, July 22, 2012.
13. Phillips Conditions of Sale, paragraph 11, Export, Import and Endangered Species Licenses and Permits, as printed in the 20th Century and Contemporary Art Evening Sale catalogue from May 8, 2016.
14. For more on art and taxes, see Ramsay H. Slugg, Handbook of Practical Planning for Art Collectors and Their Advisors (American Bar Association, 2015) and Ralph E. Lerner and Judith Bresler, Art Law: The Guide for Collectors, Investors, Dealers, and Artists. 4th ed. (New York: Practising Law Institute, 2013).
15. The US federal income tax rate on long-term capital gains from the sale of artwork is 28 percent, higher than the 15 and 20 percent tax rates applied to long-term gains on financial assets like stocks and bonds. In addition, high-income taxpayers are subject to the 3.8 percent Medicare contribution tax on net investment income. At the federal level then, the collector may have to pay a combined 31.8 percent tax. But the capital gains tax bill may not stop there, depending on where the collector lives. If a New York State resident, the collector could be liable for an additional 8.8 percent capital gains tax.
16. Gross Domestic Philanthropy: An International Analysis of GDP, Tax and Giving, Report, January 2016.
17. If the taxpayer lives in a state with an income tax, then his combined federal and state marginal tax rate will be higher. His tax savings from charitable donations will then be even larger.
18. Assuming the artist did not have a spouse at the time of death. If the artist was married, then the estate can pass tax free to the spouse. The spouse would then get the art at a fair market value as of the artist’s death. The spouse’s estate would then be subject to estate tax when he or she passes away.
19. To learn more about artist foundations, see the Aspen Institute Artist-Endowed Foundation Initiative website at http://www.aspeninstitute.org/policy-work/nonprofit-philanthropy/artist-endowed-foundations.
20. I estimated this number using data from the Association of Art Museum Directors, Art Museums by the Numbers (2015), p. 4. The following categories sum to 44 percent: Individual and Family Memberships, Individual and Family Contributions, Foundations and Trusts, Benefit Events, Admissions, Restaurants and Catering, and Museum Store. In addition, I assumed that at least half of the 21 percent of funding coming from Total Endowment Income is the result of individual and family capital contributions.
21. Association of Art Museum Directors, “Art Museums, Private Collectors, and the Public Interest,” News release, 2007 (https://aamd.org/sites/default/files/document/PrivateCollectors3.pdf).
22. This example is inspired by Jordan Schnitzer, a print collector and philanthropist based in Oregon.
23. Robin Pogrebin, “A Billionaire Is Opening a Private Art Museum in Manhattan,” The New York Times, July 28, 2016.
24. Patricia Cohen, “Tax Status of Museums Questioned by Senators,” The New York Times, November 29, 2015.
25. Patricia Cohen, “Writing Off the Warhol Next Door,” The New York Times, January 10, 2015.
26. Julian Halperin, “US Senate Committee Submits Private Museum Findings to Internal Revenue Service,” The Art Newspaper, June 2, 2016.
27. This is the value at which a willing buyer and willing seller would agree to transact over a reasonable time period. FMV is different from an insurance appraisal, which is an estimate of the immediate retail replacement value of an object. FMV estimates, which are generally lower than insurance estimates, are what the IRS will look to when examining the value of an estate.
28. For example, suppose you have two artworks both with a FMV of $100,000, but one is most likely fully valued while the other may see appreciation over the next five years due to an upcoming museum retrospective. If the collector is looking to gift assets to get them out of the estate, then the collector may want to gift the artwork with greater appreciation potential.
Chapter 8:
1. Julie Belcove, “Henry Buhl’s Hands-On Approach to Collecting Photographs,” Sotheby’s Magazine, November 6, 2012.
2. From Henry Buhl’s preface to the book by Jennifer Blessing, Kirsten A. Hoving, and Ralph Rugoff, Speaking with Hands: Photographs from the Buhl Collection (New York: Solomon R. Guggenheim Museum, 2004), pp. 7–8.
3. Belcove, “Henry Buhl’s Hands-On Approach to Collecting Photographs.”
Appendix:
1. The buyer’s premium was calculated using Sotheby’s BP formula, in effect as of the summer of 2016. It equals 25 percent of the first $200,000 of hammer price plus 20 percent of the hammer price between $200,000 and $920,000.
2. For an interesting example of a consignor being rebated all of the buyer’s premium, see Graham Bowley, “The (Auction) House Doesn’t Always Win,” New York Times, January 16, 2014. The article discusses the enhanced hammer deal Peter Brandt negotiated for the sale of a Jeff Koons sculpture in 2013.
3. Based on interviews with NY residential real estate brokers conducted in June 2016.
4. Using the Sotheby’s BP formula on a $500,000 hammer price.
5. The calculations are based on the Sotheby’s buyer’s premium in effect as of February 1, 2015: 25 percent of the first $200,000 of hammer price, 20 percent of hammer price between $200,000 and $3 million, and 12 percent for the amount of hammer price over $3 million.
6. This language was taken from the Special Notice section for a Georgia O’Keeffe painting titled Lake George Reflection that Christie’s was offering for sale on May 19, 2016.