The Orange Balloon Dog

by Don Thompson

  Christie’s Brett Gorvy said he has a client database that’s updated from auction bidding and with leads from Christie’s art specialists around the world. In 2015 most key customers on the list were in their forties and fifties and, Gorvy says, “ran their own companies.” Twenty percent were from Asia, most of those from China. Twenty years earlier, 90 percent of those on a comparable list would have been in their sixties and seventies, with inherited wealth or positions as senior executives with major corporations. Most would have been resident in the United States and Western Europe. Christie’s has said that at its various auctions in 2014, it took bids from collectors domiciled in 170 countries, twice the number that competed in the 2014 Winter Olympics in Sochi. The potential is considerable; Christie’s noted in 2015 that 43 percent of billionaires are based outside traditional Western countries. In July 2015, Skate’s Market Notes estimated, based on its data mining, that only 11 percent of global citizens with assets over $100 million were currently invested in art.

  The process of prospecting for new buyers is highly personal. Kelly Crow of the Wall Street Journal quoted Giovanna Bertazzoni of Christie’s as saying that specialists from both auction houses host birthday parties for collectors’ children. The hope is that the kids invite their school friends and that the friends’ parents stay for the party. It is said that in 2014, Sotheby’s hosted a children’s birthday party in London with an art-themed scavenger hunt. Thirty eastern European families attended, some of whom became new clients.

  Gorvy says that in 2014 he flew to China for one day to attend a birthday party for a major collector. Patty Wong, chairman of Sotheby’s Asia, reportedly flew to Japan for one day to attend a museum exhibit with an important collector.

  The most discussion-worthy promise came from Alex Rotter, then co-head of contemporary art worldwide, and Simon Shaw, then co-head of worldwide Impressionist and modern art, both at Sotheby’s. In a New York Times interview about obtaining consignments they were asked whether they would help get a collector’s child into college to score a success. Both “laughed and nodded yes.”28

  Kelly Crow also reported that in May 2014, Christie’s invited a group of eighteen Chinese collectors to visit New York. The auction house had identified some of these potential new bidders at their Shanghai and Hong Kong auctions. After vetting from Christie’s specialists, the collectors travelled to New York as guests of the auction house. They were taken on visits to the Museum of Modern Art and the Frieze art fair, then hosted for dinner at Christie’s Rockefeller Center headquarters. The auction house seated them in two skyboxes in Christie’s main auction sale room at the two-day sales of Impressionist, modern and contemporary art. The skyboxes both signalled respect on the part of the auction house and prevented other auction houses or dealers from photographing the collectors and researching identities.

  Bidding took place by telephone from the skyboxes, relayed via Christie’s contemporary art specialist Xin Li. Xin’s clients bid on six of Christie’s highest-estimate contemporary works, which together sold for what W Magazine reported as $236 million—half the evening’s sale total. Gorvy clarified that Xin was bidding on behalf of clients from Malaysia, Taiwan and Indonesia as well as China. François Curiel, employed at Christie’s for thirty-five years, said he had never seen one specialist account for that high a proportion of a sale.

  One sale to a skyboxed Chinese client was Jeff Koons’ sculpture Jim Beam—J.B. Turner Train (1986) a 91/2-foot-long (2.9-metre) stainless-steel train filled with bourbon (see photo insert). It sold for $33.8 million. The sculpture was produced in an edition of three, plus one artist’s proof. A different edition of the train had sold in 2004 at Christie’s for $5.5 million.

  Xin offers a great backstory to Christie’s efforts to find new Chinese clients. She is six-foot-one, a former professional basketball player from China’s Manchuria region, near the North Korean border. After she left China she spent a period as a Paris fashion model. In 2008, after a stint at modelling (and at the advanced age, for a model, of thirty-two), she asked her new acquaintance Diana Widmaier Picasso, granddaughter of the artist, how she might gain a foothold in the art world.

  Picasso introduced her to Emmanuel Di Donna, then worldwide vice-chairman at Sotheby’s, who hired Xin as a trainee. She moved to Christie’s in 2010 when that firm offered a position as director of Asia business development. Xin won’t talk about what incentive triggered the switch, only that she was “presented an opportunity that I couldn’t refuse.”29 She was quickly promoted to deputy chairman of Christie’s Asia.

  Xin says much of her time is spent with “about five major Asian collectors who can each spend $100 million [in] a single season on art.”30 That is annual expenditures, not lifetime. In 2014 and 2015, Xin was probably the most publicized auction specialist in the world. To complete the started-in-Manchuria story, in June 2015 the then thirty-nine-year old, never-married Xin announced her engagement to music mogul Lyor Cohen, ceo of 300 Entertainment. She met Cohen in December 2014, on a yacht at the New Year’s gathering of the art world in St. Barts.

  Another tale of what is done to find customers and consignors involves Loïc Gouzer, who also started at Sotheby’s, then moved to Christie’s in 2011. He was described in a July 2016 New Yorker article as “The Daredevil of the Auction World.”31

  Gouzer is now Christie’s deputy chairman of postwar and contemporary art, best known as a pioneer of themed auctions. These combine known and less-known works, with the hope of imposing a reflected glow of significance and value on the less-known. For example, the 2015 “Looking Forward to the Past” themed auction combined contemporary works by John Currin and Peter Doig with those of Picasso, Monet and Giacometti. The auction totalled $706 million.

  A few years earlier, Gouzer—then a mid-level specialist at Sotheby’s— was trying to expand his collector connections. He jumped at an opportunity to accompany über collector Adam Lindemann on a surfing trip to the Maldives, even though Gouzer had never before tried the sport. He survived. Lindemann has been quoted as saying that since then, Gouzer had sold many works for him. On another occasion, reported in the New Yorker article, Gouzer—then at Christie’s—sought consignment of a painting owned by a Manhattan plastic surgeon who had a long-standing relationship with Sotheby’s. Gouzer made an appointment to have a mole removed, and spent the appointment in a conversation about consigning. He lost the mole; there is no indication of whether he gained the consignment.

  Christie’s auctioneer Jussi Pylkkänen claims that for a major work coming to auction, his in-house intelligence is such that he almost always knows prior to the auction the identity of the final three competing bidders. Sometimes there are huge surprises. In the November 2015 Christie’s “Artist’s Muse” auction of twentieth-century works in New York, the featured work was Amedeo Modigliani’s Nu couché (1917–18) (see photo insert). This is a painting of a nude woman with red cheeks and a red coverlet. The work is highly sexual, considered a trophy painting because of its bright colour and dramatic impact. It had been featured in shows at the Musée National d’Art Moderne in Paris, the Tate Gallery in London and MOMA.

  Christie’s needed an iconic work as a centrepiece for Artist’s Muse. Nu couché was perfect. It had been in the collection of Italian art historian Laura Mattioli Rossi and her father for sixty years. Christie’s hurdle was that Rossi would consign only if she were offered a $100-million guarantee. That amount was considered incredibly risky. Modigliani is not among the top ten modern artists on almost anyone’s list. The former record for a Modigliani was $70.7 million in 2014 for his sculpture Tête (1911–12).

  Christie’s reportedly countered with a guarantee offer of $70 million. Rossi held firm; Christie’s finally agreed to the higher amount. The auction house then offered generous terms to any investor willing to take on some or all of the guarantee risk. Apparently a contract was signed on the afternoon of the sale, with three third-party guarantors assuming 50 percent of the risk.

/>   Holding out for a huge guarantee is not uncommon, although this was an extreme case. It is another example of the endowment effect. Because she owned it, Rossi valued the Modigliani higher than she might have if someone else had owned it. If we had gifted Rossi with $70 million, it is unlikely she would invest it in a Modigliani. As it turned out, Rossi would have netted more money had she accepted the $70-million guarantee. Once she knew Christie’s was willing to offer $100 million, she should have gone with the lower figure and negotiated a better revenue-sharing arrangement.

  An everyday example of endowment may be more relevant to those who do not own a $100-million painting. During the Toronto Blue Jays frenzied playoffrun with the Texas Rangers in October 2016, I gave my daughter Elizabeth a pair of tickets for good seats. They were hers; she could do with them as she wished. She could use them to take a friend, or could sell the pair online for $600.

  Elizabeth would never contemplate paying $600 for a pair of Jay tickets herself. But the endowment effect made the tickets in her hand more valuable than the money, or the new winter coat and boots she might have purchased with it. She took a friend to the game. The Jays won.

  If I had given her $600 instead of the tickets, would she have spent it on Jays tickets? Not likely. Traditional economic theory would regard Elizabeth’s decision—and that of Laura Mattioli Rossi—as irrational. Given the endowment effect, such outcomes are common.

  The Modigliani was positioned as lot 8A, in the hope that it would be desirable to a Chinese billionaire. The successful bidder was Liu Yiqian, the Shanghai resident mentioned in Chapter 1. Liu is has been characterized in the Chinese press as a former taxi driver and handbag seller turned billionaire art collector. That is factually accurate but somewhat misleading. It neglects to point out that the handbag business was family-owned and that in the 1980s and ’90s Liu invested in pharmaceutical companies and real estate to achieve a worth of (depending on the source of the estimate) $1.5 billion to $2.8 billion.

  Liu and his wife, Wang Wei, were well known to the auction houses, but not for modern art. In 2014 they spent $45 million at Christie’s Hong Kong for a fifteenth-century thangka, a Tibetan silk tapestry, and $36 million at Sotheby’s for a Ming-period porcelain cup. Liu owned a Jeff Koons sculpture, but was always classified by auction specialists as a collector of modernist and classical Chinese artworks. Liu bid for Nu couché on the telephone with Elaine Kwok, Christie’s director of education for Asia, rather than with Xin Li.

  When the Modigliani came up there were six bidders. There were four still in at $100 million. Bidding from Liu and another collector on the phone with Loïc Gouzer stalled at $140 million. The identity of Gouzer’s bidder was known in advance; that is why he was with Gouzer.

  Then there was a surprise bid from the room, from New York–based Korean art dealer Hong Gyu Shin. He was seated, not in a skybox, or in one of the sections reserved for important collectors, but in auction-room suburbia, near the back of the room. (He was an underbidder for Three Studies of Lucian Freud, discussed in Chapter 3.) He placed a single bid of $142 million, then dropped out. The final invoice amount was $170.4 million after addition of the buyer’s premium. Nu couché beat the former artist record by almost $100 million, to become the second most expensive work ever sold at auction.

  Liu may not have been expected to bid, but as the commercial says, wealth does have its privileges. He is reported to have paid with an American Express Centurion Card, with a one-year payment option. Wang Wei told the New York Times that she and her husband would pay off their charge within the year. “If we had to pay cash upfront, that would be a little difficult for us. I mean, who has the money for that?”32

  Known as the black card, the Centurion is made of anodized titanium and advertised as having no pre-set limit. It is the card with which you can buy anything. Liu did; his purchase reportedly earned 132 million frequent flyer miles. Christie’s would have paid just over $3 million in credit-card charges. The Modigliani was thought to be the largest single charge ever made to an American Express card—the company refused to confirm or deny, but seemed to welcome the publicity.

  Pylkkänen was right on only one final bidder of three. That is less-than-perfect bidder intelligence, but still a passing grade for the second most expensive work at auction.

  CHAPTER NINE

  LISSON GOES TO NEW YORK

  “Art dealers who focus less on business and more on art are generally the dealers who become the most successful and influential.”

  —Jeffrey Deitch, art dealer33

  “The space and architecture that a gallery chooses, and its location in the city, tells you a lot about its approach. Some collectors may never come to the gallery itself, but they still want to know it exists.”

  —Marc Spiegler, director, Art Basel34

  LISSON IS ONE OF THE WORLD’S TOP CONTEMPORARY GALLERIES. WHEN founder Nicholas Logsdail decided to open a branch of the gallery in New York after forty-eight years of art dealing in northwest London, he was going against the norm. It may not seem like an earth-shaking decision, but for a decade galleries have expanded from New York to London. There is not much history of London galleries going to New York: the best-known are Marlborough, Timothy Taylor (which opened in New York in 2016 as “16 × 34”); Almine Rech; Hauser & Wirth (to open in 2018); and Haunch of Venison (which lasted only a few years).

  Logsdail’s decision permits a look at some less obvious advantages and problems of gallery expansion, and at cultural differences in art dealing in the two art world capitals.

  The fact that relatively few London galleries make the move to the United States is strange because of the dominance of the New York market in contemporary art, relative to London. Art writer Isaac Kaplan has calculated that of the hundred artists whose works are the most expensive sold at auction, 56 percent set their records in New York versus 25 percent in London. Each of the top-ten sales came in New York.

  In my 2014 book The Supermodel and the Brillo Box, I included a list of the top contemporary galleries, assembled from responses of thirty art-world people who were asked to name the top contemporary galleries. The question turned out to be interpreted, not unreasonably, as “which are the top selling.” Lisson was listed as number twelve, just behind White Cube and Paula Cooper. The ranking reflected the reality that the Lisson brand was less well known in the US than in the UK and Europe.

  My use of a single metric was misleading. There are several distinct types of galleries. If a ranking system is used, each gallery should be ranked against others with the same objectives. Some galleries show only secondary (that is, previously owned) art, and do not represent primary artists. Other galleries focus on a niche market, promoting art from a particular movement or geographic area or time period.

  The largest galleries focus on the markets and collectors they serve. There is no single focus to what they do; they promote artists whose work sells, and may drop those whose work does not sell well in two consecutive shows. Most art-world observers would agree that this group includes Gagosian, Pace and Zwirner. I intend no value judgment by this characterization; it is the model followed by most businesses, in or outside the art world.

  The final category of gallery I will call artist-centred. Their focus is on commitment to a group of artists and belief in their work, rather than a calculation of future profitability. Artist-centred galleries do not always survive for a long period. Those that do tend to have the long-term loyalty of their artists. Lisson is in this category, as would be Marian Goodman and Gladstone from my earlier list.

  After the 2008 art market meltdown, many galleries shrank their space or closed and their principals became private dealers. Logsdail maintained his London gallery space and continued to show artists at major fairs. This reflects both the artist-centricity of the gallery and its financial ability to weather the art market recession.

  Logsdail attributes his early interest in art to the influence of his uncle, the novelist and children’s
writer Roald Dahl (Charlie and the Chocolate Factory). From the age of seven, Logsdail accompanied Dahl on art-viewing expeditions to the Tate and National galleries and to Cork Street dealers. He recalls driving back with a Francis Bacon painting in the trunk of the car. Then he got to help hang it.

  Logsdail sampled a couple of art schools, and in 1967 attended the Slade School of Fine Art. In his second year he was asked to leave because, he says, in the previous three months he had spent too much time away from classes organizing a selling exhibition of work by fellow students. The show was held at his new and somewhat derelict Bell Street home in northwest London, purchased in 1966 for £2,000 (then about $5,600) on a “pay in three years” contract.

  Derek Jarman and other Slade students cleaned the place up and painted it. Logsdail calls the student show—one of the first outside the Cork Street gallery area in London—a “proto-Freeze,” predating by twenty years the more famous Freeze warehouse exhibition organized by Damien Hirst and the Young British Artists, the yBas. The show attracted “bohemia,” including John Lennon and Yoko Ono, and was written up in the London press as much for its innovative location as for its result. To the amazement and delight of the artists represented, the show almost sold out. The success determined Logsdail’s future as art dealing rather than art making, as well as the location of his gallery.

  He has since purchased seven properties on the street and incorporated them into two separate gallery spaces at 27 and 52 Bell Street. Lisson remains in an area of very mixed retail—next door to 27 Bell are storefront funeral directors, Ronald P Sherry & Son, “Serving the Community for 130 Years.” Next to that is Nuts About Nuts, a Lebanese store selling sweets and nuts. This is not an area of jewellers or high-fashion shops. It is a fifteen-minute cab ride from the cluster of ninety galleries in Mayfair and St. James’s, in central London. Collectors make the effort to visit Lisson.