Tuesday, June 26, 2007

On the logic of pricing an artwork at 100 million dollars

Skull II, 1887, Van Gogh, Oil on canvas

There is no point in recounting the current brouhaha over the cost of Damien Hirst’s latest artwork or who its final buyer might be (the artwork "For the Love of God" is a life-size cast of a human skull in platinum and covered by 8,601 pave-set diamonds weighing 1,106.18 carats. It is still available in the marker for an asking price of 100 million dollars. It took about 20 million dollars to create).

What was instructive and was on my mind for all of last week was the interview that Mr. Hirst gave on artnet (linked here) and the following advice for up and coming artists. In this he essentially tells you the reason for charging the work 5 times its cost price and I must say that the reasoning is fairly solid. I don’t like the guy too much, but after this interview, I decided to pay a little more attention to what he says...

Copied here are parts of the interview that struck me the most. The interviewer was Joe La Placa of artnet.

At the time of writing this article, no less than six potential clients were competing to purchase For the Love of God. One client, wishing to remain anonymous, if successful in purchasing the piece, had already organized a two year tour, calculating he’d make a large percentage of the purchase price back from exhibition fees.

Joe La Placa: For The Love of God has a huge sale price of $100 million. . .

Damien Hirst: It’s too cheap! People really want it.

Joe La Placa: £50 million is too cheap?

Damien Hirst: Definitely! If the Crown Jewels were on the market, they’d sell for a
hell of a lot more than that. It’s just one of those objects.

Joe La Placa: Yes, but in relation to what other contemporary art has sold for, this
is over the top, particularly for a living artist.

Damien Hirst: Not really. What do you mean, living artist? That’s a bit of a fucking red herring really, isn’t it, a living artist? I mean, art lasts for thousands of years; it’s been going on for thousands of years and a human’s lifetime is less than a hundred years. There are only a few artists alive, relatively speaking. And the art market is, what, 2000 years old and beyond, of artistic activity? You need to forget about the living artist and just talk about art.

When I got into the art world, I consciously wanted to change it. I found it really annoying because it seemed like a kind of club where people would sell cheaply to investors and they’d make the money. Collectors would take the art off the artists and, because they came in early and they gave the artist a little bit of money, later, when the artwork got resold, it would be the collector who made the big money in the secondary market. And I always thought that was fucking wrong. I’m the artist, the primary market. And I want the money to be in the primary market.

I’ve always said it’s like going into Prada and buying a coat for two quid and then selling it next door a charity shop for 200 quid. It’s totally fucking wrong! Why are they doing it that way round? Art should be expensive the first time around. There shouldn’t be all these old boys making loads of money on the secondary market.

Joe La Placa: So you’re saying it’s the artists who should make the lion’s share of the money, not the dealers or collectors?

Damien Hirst: Right. We should have learned from what happened to Van Gogh. Art has a kind of value now! People fall for that old fucking vintage trick, don’t they? "Oh, it’s a vintage antique, so it must be expensive." But that’s another priority. When you go in someone’s house and see a painting on the wall, a new painting should be much more exciting than an old painting . . . and that should be where the money is spent.

I am sure that gallery owners and speculative hedge fund managers would not like it if this kind of a feeling took root. Imagine most of the galleries in Chelsea would be charging the final price of the artwork guaranteeing the artist maximum benefits and the buyer maximum pleasure from owning the artwork while simultaneously denying the buyer postprandial pleasure in selling the artwork for 5 times the original price in the futures market...

Of course, the above will never happen, but it always good to indulge in a bit of wishful thinking.


Tree said...

Well...I feel like there's a lot to discuss here; a very thought provoking post! But for now, until I've processed stuff, all I can think is, "what a JERK!"

Tree said...

Oy. I wanted to comment on this, other than to say Hirst is a jerk but I just can't get past that right now! He comes off as such an egotistical ignoramus in that interview and it's difficult for me to get past that to other issues.

Sunil said...

I tend to agree with you on the ego thing, but when he says things like 'give the money to the artist instead of paying a pittance and then playing the secondary market to the buyers benefit', I stood up and took notice. It was that sentiment that had me thinking - OK, this guy does have some sense in him...

Tree said...

I can definitely understand that, Sunil. The artist should get the money; they deserve it. I don't understand why there aren't more artists selling their works directly to the buyer.

Sunil said...

The internet fostering trends like online galleries are a step in this direction - of course the biggest and glitziest artists will always go the gallery route - kind of like the fashion designers sashaying their wares down the ramp.

Hungry Hyaena said...

Sunil and Tree:

Hirst is no dummy. He does come off as a real a$$hole in this interview, though. His points about the end price are valid, Sunil, but they don't really make much sense. A car sold in 2007 won't be a valued antique for another 100 or more years. The same is true of art. The price appreciates over time. Artists have always accepted this. Sure, it would be nice to get paid a bit more - my paintings are way under the market norm, for example, until my reputation is more established - but we're supposed to be starving, right? ;)

And don't forget that some of us hate thinking about the livelihood portion of the kit-and-kaboodle. I'm all too happy to have a gallery promote me and be the middle-man as far is money is concerned. (Not that I have a gallery now!)

In any case, Winkleman has a good post about this up now, Tree.

Sunil said...

You doubtless bring out a very valid point in your example given. However I would say that the 'aging of paintings (akin to aging of wine) – kind of like a reverse depreciation' takes place much faster and artists in their own lifetimes sometimes see their artworks sold for markups of > 3200% over what they had originally sold (for a pittance to some hedge fund manager visiting a Chelsea gallery). I think Hirst is trying to rail against that system. Yes, you are right, we are supposed to the starving folks… ;-)