The price is right

Thursday, November 19, 1998

The price is right

ART: The amount of money a work of art will generate on the
auction block is part science, part experience and part market
demand

By Brent Hopkins

Daily Bruin Staff

It’s old. It’s famous. It’s hanging in a big, imposing museum.
It says "Monet" in the corner.

Come on, it’s fine art, for God’s sake! It must cost as much as
the Great Wall of China or something. There’s no way you could put
a price on that.

Actually, the world of art pricing is less confusing than you
might think. It’s not just a bunch of random numbers, and there is
a science to it.

The Getty Center grabbed headlines last week with its
acquisition of Claude Monet’s "Sunrise" for a reported
multi-million-dollar price tag. Though this may seem expensive for
artwork, it is far from a record amount. Van Gogh’s "Portrait of
Dr. Gachet" sold for $82.5 million in 1990 – far more than the
Getty paid for "Sunrise."

Although fine art of this caliber routinely fetches in the $1
million range, that is not always the case. There are a host of
factors that determine a piece’s worth.

In the auction market, where most fine art trades hands,
appraisers rely on art indexes (published reports on how a painting
or similar works by an artist have sold in the past). Using these
past track records, which list more than 150,000 artists – both
contemporary and classic – auction houses set beginning prices, and
public demand determines the final price.

"The prices reflect an artist’s popularity to some degree," says
Michael Maloney, specialist of modern and contemporary art for the
Butterfield & Butterfield auction house.

"Some artists are in favor and then fall out of favor, and their
auction records ebb and flow as a result of that."

Not all prices are strictly governed by the comparative
appraisal offered by the art indexes. If the piece is unusual in
some aspect and cannot be compared to other works, then the indexes
are put aside in favor of an appraiser’s judgement. These are not
haphazard guesses designed to attract more money for the auction
houses and clients which they are serving. Rather, they are
carefully detailed reports based on a variety of categories.

The appraisers themselves are a highly specialized group. They
are experts in their fields who bring years of experience with them
as they inspect fine art and attach a price to it. Some come from
the academic world, as art historians, others as museum curators,
gallery owners and artists. No matter what background they have,
the most useful tool in appraisal is hands-on experience. There is
no school of art price gauging; the knowledge comes from many years
of actual exposure to the art world.

"The more one sees, the better-schooled one’s eye is," says
Andrea Fiucynski, vice president and director of business
development for Christie’s Beverly Hills auction house.

"One learns it only by seeing hundreds, if not thousands of
objects per year, which is what we do," she says.

This hands-on approach to learning gives the specialists insight
as to the work’s value. One factor in determining what price the
work will be auctioned for is provenance, or past history of
ownership. If the piece was owned by a particularly famous
collector or part of a well-recognized collection, it tends to
fetch more at auction, with a larger "hammer price," (the final
amount for which the work is auctioned). Well-documented pieces can
be traced back to their original owner, regardless of their
antiquity.

There are many reasons why a piece might turn up for sale on the
auction block, but Fiucynski said that the primary causes are the
"the three D’s: death, debt and divorce." It’s not always as dire
as that, however.

A sale may also come from collectors selling their holdings in
order to acquire something new, a museum selling off property or a
dealer trying to move stock that hasn’t sold. It is a relatively
rare case that artists themselves sell their material through the
auction houses; they generally rely on galleries to move their
products instead.

Aside from provenance, there are also the factors of rarity,
condition and how frequently the piece has appeared on the market.
The scarcity of a work greatly affects the price it can bring. This
is especially true in the case of works that can be reproduced
easily, such as lithographs and photos.

The fewer copies in existence, the more valuable the work is
considered. In the case of a one-of-a-kind piece, such as a
painting or original sculpture, the rarity of the work is
considered in relation to the artist’s other works.

The physical condition of a work is also important. Older works
often have deteriorated in quality through the passage of time,
making them less saleable than better-preserved material. If
damaged, the art can often be restored to its original condition.
According to materials published on the corporate website for Barry
Singer Gallery, a gallery of photographs located in Petaluma,
Calif., this restoration does not reduce the price of a fine photo,
but should be noted in the sale.

A receptive market is crucial in setting hammer prices. Rarely
viewed pieces are especially in demand.

"A piece that came from an anonymous private collection that has
been off the market for 50 years is going to be much more
desirable," Fiucynski says. "It will be seen for the first time,
(rather) than a piece that has phenomenal provenance, but has been
shopped around, and we see every season in another sale room."

Where the work is being sold is a factor, also, since different
markets tend to show more interest in particular types of art.
Fiucynski mentioned that, for example, jade pieces are currently
selling better in Hong Kong than in other markets. With this in
mind, the art community is very global, with a sale in Los Angeles
bringing inquiries from as far away as Seoul, Madrid and
Melbourne.

Some artwork holds no potential for auction, because it is
considered to be priceless. This term, usually used when describing
a universally recognized masterpiece, such as Da Vinci’s "Mona
Lisa," or Michelangelo’s "Winged Victory," is a realm of art not
generally handled by the auction houses.

Priceless works are almost always found on display in national
museums, such as the Louvre in Paris, or the National Gallery of
Art in Washington, D.C. and do not change hands in the open market.
To be considered priceless, it must be peerless in its class.

"If a work is priceless, it is absolutely irreplaceable – there
is nothing else like it in the world," Maloney says.

Such masterpieces are exceedingly rare, however, and most art
can be obtained for a definite price. What that price is, however,
is extraordinarily variable. Christie’s inaugural sale in their
Beverly Hills auction house last spring, featuring contemporary and
20th-century art, had a vast range of prices.

In the 213 lots of paintings, drawings, watercolors and
sculptures, the lowest prices were in the $1,000 to $1,500 range,
and the highest was an oil on canvas by fantastical painter Marc
Chagall, in the $500,000 to $700,000 range. Fiucynski also recalled
an estate sale where she had auctioned an item for as little as $5,
when the list price had been $200.

Though there are many subtle factors that go into the appraisal
and initial offering price of a work, the bottom line is what
consumers are willing to pay, according to Maloney.

"The public sets the price ultimately by either bidding or not
bidding on the work."

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