The Back Room: Art-Market Correction Spreads

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This week in the Back Room: The Long Museum sale’s long-term impact, Steve Wynn’s Rothko that never sells, and much more—all in a 7-minute read (2076 words).


Top of the Market
Museum Founders’ Sale… Founders

Long Museum Modigliani

The sale of Amedeo Modigliani’s Paulette Jourdain (1919), the star lot of the auction of Long Museum collection at Sotheby’s Hong Kong on October 5, 2023. Courtesy Sotheby’s.

The art market’s contraction is in full swing, and it’s hitting Asia particularly hard amid broader economic woes, as evinced by dire auction results in Hong Kong this week, including a highly anticipated sale that one insider afterwards deemed “a bloodbath.”

Sotheby’s is feeling the pain first. Its contemporary and modern evening sales this week, as well as the auction of the collection of Liu Yiqian and Wang Wei—the Chinese mega-collectors behind Shanghai’s Long Museum—registered subpar totals, even as several records for Asia were set. Our own Vivienne Chow drilled into the numbers and explored the contradictions that make this market moment at once alarming, confusing, and also sadly predictable.

Modigliani Meltdown

In August, when Artnet News broke the story that the billionaire founders of the Long were planning to offload $150 million worth of art, there was shock and confusion given the timing, with the art market cratering. Global auctions at Christie’sSotheby’s, and Phillips fell 22.7 percent in the first six months of 2023 compared to the same period last year, according to Artnet’s Price Database.

But there were high hopes for the trove’s star lot, Amedeo Modigliani’s 1919 painting . Alas, it hammered down at HK$235 million ($30 million), even following an intense bidding war, on Thursday (October 5). That was a surprising sum because…

  • The sale price of $34.8 million after fees was only 67 percent of the unpublished low estimate of around $45 million.
  • That’s $8 million less than the work achieved at auction at Sotheby’s New York in 2015.
  • And it means the house will have to match the difference between the fee-inclusive sale price and the guaranteed amount, which market observers on social media pegged at about $10 million after the sale. (Sotheby’s declined to comment on the guarantee.)

The Modigliani wasn’t the only harbinger of art-market malaise in the single-collection sale, either.

  • The hammer total in the sale overall, at HK$455 million ($58 million), was just 60 percent of the presale low estimate.
  • Of 39 lots offered, only 29 sold.
  • A total of 10 lots were bought in, including premium pieces, such as a Yayoi Kusama sculpture and a David Hockney canvas.
  • One work was withdrawn and another nearly was, but was put back on the block later in the sale and was hammered down at about 70 percent of its low estimate.

The Long Museum collection sale is also illustrative of the contradictions in this market. Despite the discount price compared to its auction history, the Modigliani trade notched several records, including for the artist in an Asian auction. The painting also became the most valuable modern Western work ever sold in the region, as well as the third most-expensive Western artwork of any category to be sold in Asia.

So is Asia’s art market feeling then correction more acutely than other places? Or are these dismal outcomes outliers?

While the global economy is shaky, the Chinese economy is practically in freefall, as its besieged property market drags down the whole continent’s growth outlook. This week, the World Bank cut its projection for China’s 2024 GDP to 4.4 percent, well below pre-pandemic rises of between 6 and 7 percent. A Reuters poll estimates 70 percent of Chinese household wealth is tied up in real estate.

So, perplexed observers ponder, why is anyone selling now? Liu and Wang are purportedly exiting in order to free up funds to buy other art and “refresh” their collection. While an auction house source said the pair is actively buying at the moment, including for the museum. The source suggested that the auction’s proceeds might help the couple fund things like educational programs related to their museum as well.

Given the Chinese economic headwinds, the timing might still feel strange, but in fairness, some sectors are performing well, if grabbing fewer headlines. Consumer spending has recently picked up, for example, according to British Chamber of Commerce data cited by Bloomberg.

However, the choice to sell now may have impacts beyond the collectors’ pocketbooks.


The Bottom Line 

Chinese dealers and collectors have fought for regard in the international art market in recent years. Some were concerned when Ding Yixiao, a contemporary art collector who founded the Xiao Museum of Contemporary Art in Rizhao, China, ran into reputational difficulties. Or when Chinese collector Michael Xufu Huang, founder of Beijing’s X Museum, found himself in hot water after a 2022 lawsuit exposed a messy flip of a Cecily Brown painting he hadacquired. They were worried that the scandal would have ripple effects for the Chinese-speaking art world.

Now, with yet more prominent Chinese collectors who ostensibly own “private museums” engaging in swift resales, there are concerns the affair is a step backwards for the whole community. Will these worries stifle Chinese collectors’ access to Western galleries following the Long collection “bloodbath”? And where would that leave Chinese and Western dealers and collectors alike?

—and


Paint Drippings

The latest Wet Paint was still being mixed at press time. Here’s what else made a mark around the industry since last Friday morning…

Art Fairs

  • After a decade with the company, Adeline Ooi is stepping down from her role as Asia director of Art Basel to attend to personal matters. Her role will not immediately be replaced as the international fair continues to undergo a structural reorganization. Angelle Siyang-Le was appointed director of the Hong Kong fair in March. (Artnet News)
  • Art Market Productions and Intersect Art and Design, are betting on Atlanta as a burgeoning art hub, announcing the debut of Atlanta Art Fair, in October 2024 at Pullman Yards, under the direction of Kelly Freeman. ()
  • The Winter Show has revealed the exhibitor list for the 2024 edition, set to open at the Park Avenue Armory from January 19–28. More than 65 international dealers will take part in the 70th anniversary event, which benefits the community-based organization East Side Settlement. ()

Auction Houses

  • Phillips has secured the trove of works amassed by Dutch shipping magnate Willem Cordia and his wife Marijke van der Laan, which now form the Triton Collection Foundation, and could net up to $70 million
  • Six recently restituted works by Egon Schiele will hit the block at Christie’s 20th Century Evening Sale on November 9 and Impressionist and Modern Works on Paper Sale on November 11. (Artnet News)

Galleries

  • Landlord RFR Holdings, co-founded by collector Aby Rosen, has inked a tentative deal to rent most of 980 Madison to Bloomberg Philanthropies, meaning gallery tenants including Gagosian will have to uproot at the end of their lease. (Artnet News)
  • Berlin-based artist Judith Raum is now represented by Zilberman Gallery; sculptor Delcy Morelos, whose earth-based installations will open at the Dia Art Foundation on October 5, has joined Marian Goodman Gallery; Paris’s Mennour now represents British artist Ryan Gander (in conjunction with Lisson Gallery and Esther Schipper, the artist has left gb agency); and Hauser and Wirth took on Paris-based artist Hélène Delprat, whose work will go on view at the gallery’s new Paris space. ()
  • Ryan Trecartin has left Regen Projects for Moràn Moràn. (Wet Paint)

Institutions & Biennials

  • Patton Hindle has been named executive director of the nonprofit grantmaking organization Artadia, following her years-long tenure at Kickstarter where she helmed the Forward Funds program. ()
  • The Met Museum is expanding the blueprint of its Costume Institute by transforming the Great Hall gift shop into a new gallery space and opening a dining facility that will be open after museum hours. (Artnet News)
  • London-based artist Vlatka Horvat will represent Croatia at the 2024 Venice Biennale, with a project titled “By the Means at Hand,” curated by art historian Antonia Majača

Tech and Legal News

  • Bernard Arnault, the billionaire art collector and CEO of LVMH is facing a money laundering investigation in France centered on a luxury resort in Courcheval, located in the French Alps. (
  • French prosecutors have asked a Paris court to send art dealer Guy Wildenstein to prison and order him to pay hundreds of millions in fines in the ongoing money laundering and tax evasion case against the art tycoon. (Artnet News)
  • The hedge fund collector Matthew Halbower and his wife Julie are suing his insurance company over $45 million worth of works by Claude Monet lost in a Michagan house fire. (Artnet News)

“I’m one of the bad guys who ends up good. Maybe I started out as a devil, but it’s better to do that and end up an angel than the other way around, right?”

Stefan Simchowitz, once the enfant terrible of art dealing, who has pivoted to a less controversial art-rental business in recent years, to the Wall Street Journal.


Work of the Week
Mark Rothko’s

Mark Rothko, <i>Untitled (Yellow, Orange, Yellow, Light Orange)</i> (1955). © 1998 Kate Rothko Prizel & Christopher Rothko / Artists Rights Society (ARS), New York.

Mark Rothko, Untitled (Yellow, Orange, Yellow, Light Orange) (1955). © 1998 Kate Rothko Prizel & Christopher Rothko / Artists Rights Society (ARS), New York.

Date: 1955

Seller: Steve Wynn

Estimate: Around $45 million

Selling at: Christie’s New York

Sale date: November 9, 2023

Of all the spectacular works on view at Art Basel in Switzerland this summer, this fiery, vital canvas in shades of orange by the modernist master grabbed eyes for both its beauty and its superlative as the most expensive piece of art for sale at the fair. Acquavella Galleries proudly hosted the painting in its booth with a handsome asking price of $60 million. However, the piece failed to sell, despite having been touted for sale for several years now, ping-ponging between auction houses and iterations of Art Basel.

A quick summary of those recent moves: The work was last up for auction in 2014 at Sotheby’s, when it sold to the Nahmad family for $36.6 million from the collection of Paul Mellon. Four years later, they sold it at Art Basel Miami Beach to Steve Wynn—who currently owns the piece, and is presumably putting it up for sale at what could be a loss, per Christie’s estimate—for $50 million.

The work comes back to auction at an incisive moment for the Rothko market. Next week, the Fondation Louis Vuitton is opening a massive retrospective comprising 115 paintings by the artist, his first dedicated retrospective in France.

At the same time, Pace is bringing a slate of works by contemporary artists inspired by Rothko to the Grand Palais for the second edition of Paris+ (Lee UfanLoie Hollowell, Adam Pendleton, and Robert Longo among them). Also getting in on the hype is the Phillips Collection, which just announced that they’ll be reopening their “Rothko Room” in Washington D.C. with three Rothko paintings new to the house, which come in on loan from the collections of the artist’s kids, Kate Rothko Prizel and Christopher Rothko.

Ahead of the November auctions and the European fairs,could serve as an indicator for whether the momentary hype around Rothko is enough to propel an eight-figure sale during an economic downturn.

 

Thanks for joining us in the Back Room. See you next Friday.

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