Art 360: Passion, Wealth and the Business of Art

Art Market Economics and Growth

• LACMA's recent expansion has generated over $500 million in economic impact and created 700 new jobs in the last five years.
• Annual direct economic activity in LA County associated with the museum's growth has increased from $44 million to $117 million.
• A 112-year report indicates collectibles appreciate at an annual real return of 2.4% to 2.8%, outperforming government bonds, gold, and T-bills.
• The global art market reached a high of $65.4 billion in 2013, representing an 8% increase worldwide.
• China experienced a 25% surge in the art market in 2013, though growth slowed to 2% in the year following that high.
• Post-war and contemporary art accounted for 46% of the market by value and 44% by volume change in 2013.
• Global auction sales have increased by over 150% in the last decade, driven primarily by higher-priced works.
• In 2013, the U.S. held the largest volume share of the market at 21%, followed by China at 18%.

Collector Profiles and Strategies

• Linda Resnick:
  • Has collected since age 19, initially buying a Howard Chandler Christie poster for $125.
  • Co-organizes the LACMA Collectors Committee, which raises approximately $4 million annually for acquisitions.
  • Core home collection focuses on "old masters" (e.g., Hans Memling, Francois Boucher) and 20th-century ceramics/furniture, prioritizing personal passion over investment.
  • Acquisitions strategy involves consulting museum curators (e.g., Scott Schaefer) and prioritizing works with a "grit" over traditional refinement.
  • Views art acquisition as borrowing for a lifetime, with the long-term goal of donating the collection to LACMA.
• Maurice Marciano:
  • Co-founded the Maurice and Paul Marciano Art Foundation, which is acquiring the former Masonic Temple for a new Los Angeles museum.
  • Currently serving as co-chair of the MOCA Board of Trustees, prioritizing the public museum over his private project temporarily.
  • Past mistake involved selling "blue-chip" contemporary art (Warhol, Basquiat) during the 1990s market crash, realizing too late they were undervalued assets to hold.
  • Resumed collecting in 2006, focusing on deep, long-term relationships with young artists (e.g., Sterling Ruby, Takashi Murakami) to capture growth as they evolve.
  • Advises new collectors to buy what they love for emotional attachment, noting that collectors who buy for pure investment often underperform.
• Larry Gagosian:
  • Operates the world's largest gallery network with 14 international locations (New York, LA, London, Rome, etc.).
  • Maintains an instinctive, "gut-driven" expansion strategy rather than a rigid plan, focusing on physical presence where artists live.
  • Believes the private gallery model is irreplaceable by auctions or online sales due to the necessity of relationships with artists and collectors.
  • Notes that the online art market doubled in the last year but remains low-volume, serving primarily as a tool for awareness at lower price points.

Market Dynamics and Future Outlook

• Art values are fluid; for example, Caravaggio was a "footnote" in art history until the 1920s, whereas previously, furniture held higher value than paintings.
• Market bubbles are inevitable due to oversupply, particularly when artists produce work solely to maximize revenue rather than artistic expression.
• High output from artists like Picasso and Warhol does not inherently devalue their work, contrasting with the misconception that scarcity guarantees value.
• Recent market surges can be instantaneous; e.g., Toba Auerbach's paintings saw estimates jump from $600,000 to $1.2 million after the artist announced the end of a specific series.
• Online sales are expected to remain a neutral to positive force for accessibility, but physical galleries will retain dominance for high-value transactions requiring due diligence.
• The art world is increasingly defined by "globalism," with rapid exchange of ideas and images facilitated by technology but anchored by physical relationships.

Institutional Roles and Art Education

• Major museums are historically "collections of collections," relying on private patronage and gifts to build encyclopedic holdings (e.g., Nelson-Atkins, Met).
• Private collectors often possess "split-second decision-making intuition" that complements the slower, history-based decision-making of museum boards.
• Museums are shifting toward visual culture, with attendance doubling at LACMA in five years as a counterbalance to declining literacy rates.
• There is a recognized crisis in arts education within national school systems, despite studies showing art classes improve attendance, attention, and overall test scores.
• Organizations like PS Arts have demonstrated that art curricula in school districts can raise the standard of education across all subjects.
• Young collectors (e.g., the "Young Folk" initiative) are increasingly active, with small galleries serving as incubators for emerging artists before they reach major houses.