Everyone wants in on the art game—old guard, new guard, flippers, bon vivants. That means the rules are changing, for better and worse.
To understand the tumult in the world of art collecting today, take a look at @StefanSimchowitz on Instagram. The LA-based media provocateur, a self-described “cultural entrepreneur,” is the most visible, vilified, and valorized art flipper, a new breed of collectors who use social media, lots of cash, and a network of like-minded friends to juggle the price of young artists’ works upwards, close to the collapsing point.
Richard Massey, a Miami-based collector, jokes that Simchowitz and company have stirred up such ire because the brashly public deal-making chafes against “the WASP mores that have ruled the business for decades.” True or not, those mores are fading. Dealers are losing control of their artists’ markets. Curators and critics are no longer the gatekeepers. The next generation of collector, armed with viral media skills and cash to boot, is changing the art world, perhaps for good.
“Now everybody wants to be a collector. If you have three pieces, you are a collector. If you have five, you can open a warehouse,” muses Martin Z. Margulies, who, by contrast, presides over both a 45,000-square-foot art warehouse space in Wynwood and a penthouse collection that looks like the Metropolitan Museum of Art’s Modern wing. “We’ve seen an amazing acceleration,” he says, pointing out the exponential growth in all corners of the art world.
Last year, 75,000 people visited Art Basel in Miami Beach, the event that spawned 19 satellite fairs around town. If you tally all the fairs of Art Week, Miami saw more than $3 billion worth of art. But how to navigate this world, how to rub elbows without stepping on toes? Here are some pointers from the best in the business.
DO YOUR HOMEWORK
For many, collecting is just an excuse to learn about art. Don and Mera Rubell collect both art and books on art. With upwards of 40,000 volumes, the Rubell Family Collection’s library in Wynwood speaks to the wealth of knowledge (and time spent) behind one of the country’s best private collections. Research ensures a balanced, relevant collection, and is sound financial advice. When you know history, you know how tastes and the market change over time. Dennis Scholl, the vice president of arts for the Knight Foundation, has amassed a formidable collection alongside his wife, Debra. “The great secret about collecting is that if you focus and do it with connoisseurship, there are always one or two works that take care of the cost of acquiring the entire collection.”
Margulies concurs. “Read, educate yourself, develop relationships with good dealers, go to museum shows to see the whole body of work by an artist. Are they progressing or regressing?” When asked about his own regimen, Margulies puts it bluntly: “I do work. I run around. I go to 20, 25 galleries a day when I’m in New York.” It’s not window shopping, it’s research.
PUT YOUR MONEY DOWN
For many, fairs like Art Basel in Miami Beach and Frieze Art Fair are an excuse to score free Champagne and take in the sights—both on and off canvas. Not so for the big collectors. “The serious collectors don’t come for the dinners or the parties. This is serious stuff for them,” says Margulies. “If the fair opens on Wednesday, the big-time collectors are gone by Thursday.”
Even if a backroom deal hasn’t already been sealed with two clinking flutes of Veuve Clicquot, a good piece won’t last long in the open. “If you don’t buy it at the booth, you might not have a chance,” he says, and relates a story from last Basel: He watched a couple and their advisor examining a painting. After a moment’s hesitation, they walked away to further discuss the purchase. That’s when Margulies swooped in, acquiring the work for himself. “They didn’t pull the trigger,” he says with a laugh.
At the booth or the gallery, discounts should be asked for tactfully. “Most people can get 10 percent off the top,” says a Miami dealer who asked to remain anonymous. “Twenty is reserved for friends and family.” Lowballing does little to create a lasting relationship with the dealer and the artist, which—because of future deals—should be everyone’s main goal. Also, remember that the sticker price is split with the artist, so any money kept in your pocket is kept from the artist’s.
Then there’s online. In 2011, blue-chip gallerists James and Jane Cohan founded the VIP Art Fair, the first virtual art fair. It wasn’t a startling success, but it did test the waters for other virtual collecting sites, such as Artsy, Paddle8, and Artspace, which acquired VIP Art in 2013.
For Jack Benmeleh and his wife, Tara Sokolow, two of Miami’s most visible young collectors, Paddle8 got them more than a good price on a piece. “The experience was identical to buying a work from one of the major auction houses,” says Benmeleh. “Same dance, different players.”
The laptop offers young collectors unfettered access to what can be a secretive industry. “Back in the day, you had to be connected to a specific gallery to get in on the hot artists. Now everyone has access,” says Benmeleh, who notes that “the relationship with the gallery or artist, however, is what takes you to the next level.”
FOR LOVE, OR MONEY?
Collecting is often described as a drug—a very fun, expensive, and addictive drug. But what makes a good collection? “The key is getting the right work, not just getting a Stella, a Lichtenstein,” Margulies says, although he concedes that this takes a lot of money, and the right relationships.
You also have to balance the personal benefits with the social. According to the Benmelehs, you should be honest about what moves you. “You’re not going to like everything you see, so the key is to be honest with yourself and pursue only the work that you truly love. Especially if you’re going to live with it.”
Don and Mera Rubell second this. “Follow your heart, mind, and soul,” they advise, and “support as many young artists as you can.” That simple formula has proven quite successful for them, as they were early patrons of Richard Prince, Mike Kelley, and Jean-Michel Basquiat.
However, there is a responsibility that comes along with collecting art. “I always try to get collectors to ask themselves what the end game of their collecting might look like and how their present activity will play into this,” says Aramis Gutierrez, an account manager at the Wynwood-based art firm Museo Vault. “I want them to think about how, through collecting, they are entering an artist’s conversation and assisting to propagate a certain type of aesthetic.” Simply put, you collect what you want remembered.
But it’s naïve to think that money doesn’t factor into this. There is a lot of money to be made—and quickly. For instance, a Sotheby’s Evening Auction in May 2014 resulted in $364,379,000. “There are two types of collectors,” says Margulies. “There are the collectors who love and support art, but the majority are getting in because they think they can make money. At the end of the day, they are stock pickers and speculators.”
And then there’s flipping. It’s been around, in some form, for decades, but the acceleration that Margulies mentioned can mean vast profit margins. Lucien Smith saw his value increase 3,000 percent in one year; Oscar Murillo’s (one of the Rubell discoveries) increase was 5,000 percent. This would be fantastic if it were based on talent or historical import, and were totally sustainable. But it’s not. If an artist’s market doesn’t sustain a NASA-level trajectory, collectors walk away. Curtains. One need only visit the pseudo tongue-in-cheek website artrank.com, which divides upcoming artists into categories such as “buy now,” “sell now,” and “liquidate,” to see how the market can wreak havoc on today’s art and tomorrow’s art history.
Understandably, art world insiders are wary. One anonymous Miami gallerist doesn’t mince words. “Once you are branded a flipper, other galleries and artists will have serious reservations about selling to you. The art world is small, and people talk. While there are no rules or regulations, there is etiquette. You have to abide by it.” Collectors and gallerists agree that you should first offer a piece for the gallery to buy back, instead of sending it to an auction house. That can get messy, and oftentimes can result in a blacklist.
DOES THIS MATCH THE COUCH?
Because no two homes are the same, collectors must consider how the work they purchase will fit on their walls. Or through the door. “We live on the 31st floor, so cranes are not an option,” says Benmeleh. “The elevator becomes the gatekeeper.”
Even if you don’t live in a condo, displaying art in your home presents its own difficulties. “Humidity, light, and insects are all forces to be reckoned with in South Florida,” says Gutierrez.
Many condo dwellers opt for video art, as it can be easily stored and displayed, but that too has hidden costs. Several years ago, Margulies complained that he was going to have to stop collecting video because the projector light bulbs were getting too expensive. When asked about this three years later, he laughed and said, “A hundred videos later, I’m still changing light bulbs.”
For Dennis Scholl, “Collecting work that is difficult to exhibit is a hallmark of Miami collectors.” For example, he and Debra fell in love with Inverted Retrograde Theme, USA (House for a Songbird), a 2002 piece by Turner Prize winner Simon Starling. The only problem: The sculpture was 300 square feet and contained two live finches, which promptly “escaped from the piece and flew around in our space for a month, doing what birds do, all over our floors.”
As artists experiment with new materials, collectors hold their breaths. Richard Massey bemoans the fact that he stored a Paul McCarthy Santa Claus doll, made out of chocolate, in his home freezer. He has kids. They like chocolate. You get the point. But the story doesn’t end there. Perhaps that piece would still be around if not for another work in Massey’s collection.
As part of the 2004 Carnegie International Exhibition in Pittsburgh, the Belgian artist Carsten Höller filled a greenhouse with Solandra maxima, a potent aphrodisiac. After the exhibition ended, Massey acquired the plants for his Coconut Grove home. The amorous effects? “I now have two beautiful children to show for it.” That’s the thing with art. You often get more than you pay for.