50 THE ART NEWSPAPER Number 284, November 2016
Art Market United States
US election casts a
shadow over market
To what extent could national unease afect the autumn auctions?
TRUMP AND CLINTON: GAGE SKIDMORE. ART BASEL: © ART BASEL. BOYLE HEIGHTS: COURTESY OF NICODIM GALLERYPOLITICS
New York. The United States is bracing
for the political fallout from its presi-
dential election this month, but the art
world may already be feeling its eco-
nomic efects. Along with the plummet-
ing value of the British pound following
the country’s Brexit decision, financial
uncertainties have spurred auction
houses to take precautionary measures
while facing their flagship autumn sales
in New York.
Although they are prohibited from
collaborating on dates, Christie’s, Sothe-
by’s and Phillips have all scheduled their
major auctions to begin safely after the
8 November vote, pushing Impressionist
and Modern art into the third week of
the month. For the past two presiden-
tial cycles, auctions were held just days
after the election—or even, in the case
of the Sotheby’s 2008 Impressionist and
Modern evening sale, the day before.
All eyes on America
“The biggest difference compared to
previous elections is that it’s not only
the focus of America, but of the world,”
Sotheby’s New York’s head of contem-
porary art Grégoire Billault said of the
house’s decision in late May to hold the
sales after the “disruption” of the elec-
tion. In addition, between October and
November, Sotheby’s raised the ceiling
on bottom-bracket commissions—
on which it takes its largest rate, 25%
of the hammer price—from $200,000
to $250,000.
Economists who study the art market
agree that, while art is unique, it gener-
ally follows the same trends as other
assets. A 2009, paper by William Goetz-
mann, Luc Renneboog and Christophe
Spaenjers showed art prices tracking
closely with equities performance since
at least 1830. While the art market’s
global nature usually insulates it from
national events, election jitters tend to
engender a scaling back of investments.
Opinion is divided over whether
or not an election’s impact on the art
trade can be quantified, but Stephen
Suttmeier, a technical research analyst
at BofA Merrill Lynch Global Research,
has concluded that since 1928 the S&P
500 index has dropped 2.8% on average
during election years without an incum-
bent president seeking re-election.A paradoxical asset
That art is a hard asset can make it more
valuable in times of extreme uncer-
tainty, says Goetzmann, a professor at
the Yale School of Management. During
the Second World War, for instance,
“you could take a $20m painting and roll
it up in a tube and leave the country”,
he says.
But art is also considered non-liquid,
especially in an overall economic slump
or anxious market. Coaxing top consign-
ments becomes diicult, as sellers may
wait for more favourable conditions.
The art adviser Stephane Connery,
formerly of Sotheby’s Impressionist
and Modern department, recalled that
the 2000 election, which was ultimately
decided weeks later by the SupremeZika’s sting: a
slump in Miami
bookings for
Art Basel week
Galleries undeterred,
but groupies could be
ART FAIRS
Miami Beach. As the art world prepares for Art Basel in
Miami Beach, which runs from 1 to 4 December, tourism
data suggest that fear of the mosquito-borne Zika virus
there may mean thinner crowds at the US’s premier art
fair, which last year attracted 77,000 attendees.
Lio Chen, the vice president of operations at LodgIQ,
a hotel revenue management platform, reported that
October bookings for the first week of December were
down by between 5% and 6% in Miami Beach compared
with last year, which saw torrential downpours. That is
consistent with other figures, such as those from industry
researcher STR, which saw the average daily room rate
drop by 5.3% for August 2016 compared with August 2015.
“The swagger of Miami Beach is being tested,” says
Scott Berman, the Miami-based US hospitality and leisure
practice leader for professional services network PwC.
“When you look at the metrics of the hotel industry over
the past month, it’s a tale of woe, meaning lots of can-
cellations, lots of groups that are not considering Greater
Miami for their next event.”Fewer hangers-on?
In the past year, Florida reported 179 locally originated
cases of Zika, the efects of which can be serious, espe-
cially for pregnant women. Hoping to halt the spread, the
city has resorted to aerially distributed pesticides, despite
protests from locals over environmental concerns.
The LodgIQ data reveal that the drop-of is steeper for
individual rather than group bookings, which suggests
that collectors and advisers may be giving the fair a miss
this year. But galleries have not changed their plans. A
spokeswoman for Art Basel says that, while organisers are
following health oicials’ Zika reports, “none of our exhib-
itors or partners have cancelled their participation in the
upcoming show as a result of it”.
Indeed, some see that lower turnout could be an advan-
tage: “I’m really hoping it wipes out that whole fashion-y
hangers-on contingent that goes to the fair,” says one
gallery director, who asked for anonymity. Madonna, at
any rate, has said she will still be going, and will perform
at the new Faena Forum on 2 December. D.D.Art galleries targeted in Los Angeles neighbourhood battle
Los Angeles. A major anti-gentrification
protest movement aimed at art galler-
ies is under way in the Mexican-Amer-
ican and working-class Los Angeles
neighbourhood of Boyle Heights.
The protests, which began in the
summer, have mostly been aimed at
11 contemporary art galleries, many
of which have arrived in the past two
years, including Maccarone, Nicodim
Gallery, and MaRS. Rallies with pro-
testers carrying signs with slogans
such as “keep Beverly Hills out of
Boyle Heights” have also targeted
nearby higher-end galleries such as
Venus Over Los Angeles and United
Talent Agency’s Artist Space, which
have been symbolically served fake
eviction papers. As resident Delmira
Gonzalez told LA Weekly in July, “We
know that if the galleries go up, the
value of the properties go up.”
Although art galleries are a notable
feature of many gentrified neighbour-
hoods, studies (such as a 2012 reporton New York by the National Endow-
ment for the Arts with the Brookings
Institution) have failed to quantify, or
even explain exactly, how galleries
make real estate more valuable. The
findings confirm correlation but not
causation.
Boyle Heights has a rich tradition
of protest as a centre of the Chicano
movement of the 1960s. One mainstay
of that era, Self Help Graphics & Art,
has come under fire for working with
newer arrivals, but its associate direc-
tor Betty Avila told the Los Angeles
Times that the non-profit has little in
common with “these new commer-
cial galleries that have thousands and
thousands of dollars passing through”.
Eva Chimento, who opened Chi-
mento Contemporary in September
2015 and has only two employees, is
weary of the confrontation. “I have a
lease. The landlords are not going to
let us out of those leases. We’re stuck
here together.” D.D.Packed aisles at Art Basel in Miami Beach last yearSpray-paint protest: grafiti outside
Nicodim Gallery in Boyle HeightsCourt, drove down sales, even in a season
of strong estates. “It was very lukewarm,
as a consequence, I am convinced, of the
uncertainty about that election,” he said.
“It does afect business, which creates an
opportunity for buyers, if not for sellers.
People take their foot of the gas.”
Darius Spieth, a Louisiana State Uni-
versity art economist, endorses the idea
of moving the auctions on a consumer
behaviour rationale. “There’s often an
element of mood,” he says. “You need
to be in the right kind of mood because,
after all, it’s bidding and people make
decisions in a split second, so they need
to feel a certain sense of ease. It’s a psy-
chological phenomenon.”
Dan DurayDonald Trump on the campaign trail in Phoenix, Arizona. Below, fellow presidential candidate Hillary Clinton addresses supporters in the same city“It does
aect
business...
people take
their foot
o the gas”