Unconventional Auction Favors Artists Only
I'm still not sold that the art market is recovering (it could be, but it's too soon to tell). But, if it is, the upside is going to the galleries and collectors -- the artists aren't getting squat. November was generally kind to Christie's, Sotheby's and Phillips de Pury, leading to hundreds of millions of dollars in art sales. So, to get their own piece of the art market pie that may or not be forming, artists are starting to go directly to the buyers.
Artist Ryan McGinness hosted a sale of pieces by several artists, with the person who did the work taking home all the spoils. The presale estimate of $47,000 to $57,000 made sense, as the final tally came to $51,300, pretty much in the middle. McGinness himself was present at the event ... via a video connection from Amsterdam.
The traditional auction model trends to benefit collectors rather than artists, as it creates a secondary market for artwork. It's really no different from the stock market. An IPO, if successful, will be the starting point, with the price going up later, to the advantage of all subsequent owners.
A similar experiment was conducted in September 2008, when Damien Hirst disintermediated the art dealers and went straight to auction, in a sale conducted by Sotheby's. The effort was good for $200 million and disrupted the status quo, in which dealers sell and auctioneers resell. McGinness took it a step further, though, skipping the dealers and the auction houses, doing it all himself. He's a bit more careful, saying that he was not "trying to subvert or replace the auction-house system."
And, for the pieces going under the gavel, this is true. In fact, the major auction houses probably wouldn't have taken much interest in the lots offered, given the prices. The art dealers, on the other hand, do lose a bit, as they'd typically take half the sale for themselves. McGinness didn't take a dime from the artists participating in his auction.