Thursday, October 20, 2011

Filthy Lucre Links

by Robert Boyd

The rich are not like you and me. For one thing, they can use art as collateral for low-interest loans. A story in Bloomberg Businessweek details how a hedge fund manager, Michael Steinhardt, used Picassos and a Jackson Pollack he owns to secure a low-interest loan for a real-estate development.
A real estate developer would ordinarily finance this type of development through a two- to three-year renovation loan that would carry a variable interest rate based on a benchmark such as the London Interbank Offered Rate, also known as Libor. Banks usually charge a significant premium to Libor for such loans because of the risk that the development project will go awry, leaving the lender with a half-completed building as collateral, Stephen Brodie, the head of Herrick’s banking practice and an expert in both art and construction finance, said in an interview.
But fairly liquid collateral, like Picasso paintings, reduce the risk for the bank. And when their risk is reduced, their interest rates come down. Of course, this only works if you own valuable art in the first place. [Miles Weiss and Katya Kazakina, Bloomberg Businessweek via Art Market Monitor]

Rich guy's plan to save Greece. Dakis Joannou, the billionaire Greek art collector whose collection was the subject of a notorious vanity exhibit at the New Museum, actually has some good ideas about what his home country can do to dig out from its financial problems.
[Joannou,] the chairman of the Greek construction company J&P-Avax SA and founder of the 28-year-old Deste Foundation for Contemporary Art helped establish the Guggenheim Museum in Bilbao, transforming the Spanish city from backwater to arts boomtown.

“Culture is a big business that people are hungry for and we have huge assets,” Joannou, 71, says from his office in the shadow of the Olympic stadium. “But the government uses our assets to make political statements and to gain votes. It’s a matter of survival for them, and nobody wants to invest in culture or anything else in a climate of bankruptcy.”
Even so, Joannou says that the two main political parties, Pasok and New Democracy, are devoid of the necessary cultural drive, and that the government’s projected 12 percent rise to 16.5 million foreign tourists visiting Greece in 2011 compared with last year is a Pyrrhic indicator.
“The tourists who come to Greece go to the sunny islands, making any rise in visitor numbers pathetic in comparison to our assets,” he says. “Culture management must be creative, imaginative, exciting and that can’t be done here.”
Joannou says he thought Greece’s luck had turned when it won the right to host the 2004 Olympics, only to spend 9 billion euros on a project that ended in financial disaster, at the time lumbering the government with a deficit in excess of 4 percent of gross domestic product and beyond European Union limits.
“I went on a few of the government culture committees, but their inability to act frustrated me,” he says. “I no longer get involved. I gave up on them. I do my thing. It’s a shame.”
Joannou shakes his head. “We could have done here what we did in Bilbao,” he says. “Politicians didn’t want to listen.”
In a world where Hollywood spends hundreds of millions to produce movies like 300, The Lightning Thief, Clash of the Titans, and most recently, Immortals, Greek cultural and artistic tourism should be major industries. [A. Craig Copetas, Bloomberg Businessweek via Art Market Monitor]


Then there's the rest of us. Spinning off from Occupy Wall Street is Occupy Museums. Their manifesto begins:
The game is up: we see through the pyramid schemes of the temples of cultural elitism controlled by the 1%. No longer will we, the artists of the 99%, allow ourselves to be tricked into accepting a corrupt hierarchical system based on false scarcity and propaganda concerning absurd elevation of one individual genius over another human being for the monetary gain of the elitest of elite.
Now personally, I am glad that museums are elite institutions. I don't want "the people" to decide what goes into museums. The rest of the manifesto speaks to the conflicted nature of collectors and museums (see Dakis Joannou above), and that is an important issue. But let's say that conflict of interest somehow went away--would it necessarily benefit artists? Or would their situation be about the same as it is now? Hrag Vartanian has issues with this protest.
I think Occupy Wall Street hits on the bigger issue that impacts not only the art world but every other facet of society, namely access to money and power. Where were these protesters yesterday during the Sotheby’s art handlers protest? Since August 1, members of the 99% (i.e. art handlers) have been locked out by Sotheby’s, and they continue to need help standing up to the art market’s disregard of workers who make the system run.
Still, the manifesto is rousing. I especially liked this:
For the last few decades, voices of dissent have been silenced by a fearful survivalist atmosphere and the hush hush of BIG money. To really critique institutions, to raise one’s voice about the disgusting excessive parties and spectacularly out of touch auctions of the art world while the rest of the country suffers and tightens its belt was widely considered to be bitter, angry, uncool. Such a critic was a sore loser.
The action will take place today at 3 pm in New York City.
[Occupy Museums, Hyperallergic]

Critiquing disgusting excessive parties. Houston artist MM Hansen is apparently not afraid to seem bitter, angry or uncool as she amusingly dissects a charity/art event at Saks Fifth Avenue.
Words do not do this evening justice. It was a total photo op night. A friend emailed me to say she'd put me on a list for this evening's charitable event at the Galleria's Saks Fifth Avenue. I won't mention the charity, because the photos I took and the experience I had have nothing to do with the charity's good works. And perhaps that is exactly the point.
She peppers her account with photos and gentle, pithy descriptions that hide a barb underneath.
I saw two uncomfortable looking bare-chested Houston fireman meandering about, each carrying an expensive black handbag. Who put them up to that? Why weren't they signing a new 2012 calendar instead, if indeed, there is one this year. Or perhaps they weren't Houston firemen?
It's hard for me to read this (and see the accompanying photo) without  thinking how weird and condescending it is for a group of wealthy charity organizers to hire a couple of members of the working class to be eye-candy for the night. Hansen concludes:
I am not sure why folks go to so many of these events. Is it because their friends ask them to contribute to a worthy cause? And is it also because we have no plaza publicas in this country in which to parade in the evening and gossip? A bit of both?
Check out her blog for lots and lots of photos of this event. I've been to a few of these, and I always feel pretty uncomfortable at them. [Rockbridge Times]

If you want to fight for artists, fight for droit moral. Droit moral, or moral rights, covers a lot of area in art. One area is that if a work of art is resold, the artist of the work should benefit from this. Sometimes laws cover just the gain in value of the artwork, sometimes the total resale price. This kind of law is common in Europe, and exists in California--but is not widely enforced. Hence a class-action lawsuit that has just been filed against Sotheby's and Christie's.
The fact that California's Resale Royalty Act is "little known" (as the Wall Street Journal's Kelly Crow describes it in her article today) is no excuse for ignoring it. This law is anomalous in the U.S., but not in Europe. It is surely well known to Sotheby's and Christie's legal counsel.

The two auction houses have just been sued in U.S. District Court, Central District of California, by New York artist Chuck Close, California artist Laddie John Dill and the heirs of Robert Graham (and also, in Christie's case, the Sam Francis Foundation). They are seeking compensatory and punitive damages, as well as attorneys' fees, under the California law. 
Lee Rosenbaum thinks the law is poorly constructed because it takes 5% of any resale--even sales that are for less than the purchase price. I think it can be argued either way. If the royalty were just on the capital gains, one would want it to be much higher than 5%. But the accounting for this would be a nightmare and subject to all kinds of shenanigans. A royalty on any sale is easier to keep track of (and even then, not so easy--if it were, this lawsuit would be unnecessary). I'm pretty sure artists have no such royalty rights in Texas, where property rights trump all. [CultureGirl]


Where the rich will be tonight in Houston. The Texas Contemporary Art Fair opens tonight, with the VIP Preview Party starting at 7:30 pm (and the even more exclusive CAMH Preview Party at 6 pm). I'll probably go to the later party (for some reason, I have received five VIP passes from various sources, which either indicates that I am now a member of the elite or more likely that they were giving away passes to any bum with a blog). Expect photos of the fabulousness! (And if Occupy Houston were to show up in front of the Brown Convention Center tonight, well, that would be an interesting coincidence!) [Texas Contemporary Art Fair]


1 comment:

  1. Bitter? Angry? Uncool? I don't think so. I had fun photographing folks at the Saks event and I won the auction item on which I bid. It was a really good evening.