ArtNet: Curator Is Asking Buyers to Sign a Special Contract 0

[vodou]

Speculation on Black Artists Has Gotten So Intense That for Christie’s Latest Sale, Its Curator Is Asking Buyers to Sign a Special Contract

In an effort to thwart flippers, the show's curator Destinee Ross-Sutton has developed a list of terms to which buyers must agree.

Eileen Kinsella, August 13, 2020

https://news.artnet.com/market/say-loud-show-christies-1901685?utm_content=from_&utm_source=Sailthru&utm_medium=email&utm_campaign=US News Morning 8/14&utm_term=US Daily Newsletter [MORNING]

 

Wouldn't it be interesting if we started doing this? Like...the next time somebody approaches you on CAF, stating that something is their grail but could we please also drop the price a bit to fulfill that childhood dream? Oh sure no problem, happy to brings some joy to your life...but please first, just sign and return this "no flipping" contract

[grapeape]

I was ready to be very angry at the audacity of such terms. I strongly believe once art is in the hands of a collector be they devote or pond scum, the art now belongs to the collector who paid the asking price.

Now I certainly have zero use for the creeps that raid art before it’s shown to a wider auction audience. Art should find its price. I have to hand it to Felix. He backs his artists. He protects them. Dealers don’t get to cherry pick before the leftovers are listed. 
 

I read the terms; Buy the art and in writing pledge not to resell the art for five years. Click on the link for the rest. Vodou did the hard work here so read this through before you give your opinion.

Flippers be flipping. I understand dealers making profit. Collectors trading up and all the things we’ve talked about before. I think there is a way to flip without being a gouging A 🕳. Modest second market price bumps instead of gouging on quick  flips.

I’ve decided bless them if this is what they feel they have to do to protect the artists. As a collector I can wade in and go along or I can simply say I’ll pass, it’s not for me/

If anyone has an extra Basquiat they’d like to sell me at a huge discount because it’s “not about the money it’s about my grail” I will sign a five...hell ten year agreement not to resell.

A native New Yorker be 🍇 🦍 so of course Jean Michelle means a lot to me.

S A M O good topic for discussion Vodou I can feel it. Thank you.

Edited August 15, 2020 by grapeape

[grapeape]

Vodou even though the concept of controlling my purchase with contractual terms goes against my interests as a collector, I can’t help but to be on the side of the artists.

I would rather they (artists) get most of my money. The rep deserves something. Dealers gotta eat (violin cue).

You’re a guy that holds on to his art. I try my best to do the same. It’s not guaranteed but it’s nice to know there will be profits coming our way in the years to come. But money changes everything. The art for art sake transcends that until the inevitability of money involved corrupts the experience.

Warning; (briefly introducing music)

I think of my hero Prince in the battle he had with Warner Brothers. I didn’t get it at first, the symbol and all the fuss. Eventually it became clear that artists had to change the game and fight for what they created. It must be soul crushing to have executives make decisions on your output. The artists should have more of the $ pie.
 

Jack Kirby and other artists,...sigh.

[John E.]

Like Grapeape, I see the sides of the collector and the artist. I'm of split minds. I'm just exploring ideas, not necessarily saying I commit to them.

This idea operates on the assumption that artists and illustrators (comic book artists) work the same revenue operations. Fine artists, in general, work on one piece for one or more months. Meanwhile in general, comic artists work monthly on page rate. Then they sell that physical art for extra income.

Then in general, comic artists can produce relatively quick commissions and sketches for extra income (and charge $5 a signature per book, $10 if it's getting slabbed), while it's harder for fine artists to do that. Also, most comic artists are hired to draw a copyrighted character without paying a royalty to the copyright holder. And we as collectors often contribute to the livelihood of artists by purchasing sketches and commissions from them often times as a symbol of support, as opposed to us really needing it. Most of you here are not into sketches and commissions, but let me tell ya, the prices on those have shot way up in the last 2-3 years.

Because no such "anti-flipping" agreements are in place in for the comic book artists, artists and their reps hedge against rise in values by selling today's art at tomorrow's prices. I think many here have said or agree that, for the most part, the primary market is what makes the most money on a piece, and after that you tend to lose money if you sell within 5 years. You might not see a return on "everyday art" for until about 10 years...and even then.

When a comic artist gets hot and prices shoot up, that's good for their business right? That's how you build a market for them? I'm not on that side of the business so maybe I'm way wrong.

I just think what is right for the fine art market, especially for Black and other artists of color, may not be "right" for today's comic artists. Whereas fine artists are protecting themselves with "anti-flipping" agreements, today's comic book artists are protecting themselves by raising their commission prices and their art prices. I rarely hear about royalties given to creators (artists, writers, colorists, letterers) for copies and trades sold, so perhaps the onerous should be on corporations to take care of their employees by paying out better royalties? (Fine artists don't have the "benefit" [I'm fully aware of the irony of that statement] to have a corporation with which to negotiate better term.)

Lastly, if one has to agree to hold on to work for 5 years before selling and paying 15% of their margins, then one would have to think the price of the art should be lower. Also, what happens when after 5 years, the art loses value?

Just ideas  

 

[bernoulli]

I can't see any reason to be mad about the terms. Sellers have the right to establish any kind of condition they want. Prices will be reduced in relation to the stringency of each condition.

[vodou]

1 hour ago, bernoulli said:

I can't see any reason to be mad about the terms. Sellers have the right to establish any kind of condition they want. Prices will be reduced in relation to the stringency of each condition.

This is my mind too - it's all voluntary. This is basic contract law stuff, two willing parties, etc. Don't like it, just walk and the next guy gets a turn. Everybody walks...then the seller will have to re-evaluate their commitment to selling versus just keeping. No different than how Los Bros Donnelly still have most of the art they've ever bought over the last 40 years, as they have terms ("price") they will not sufficiently budge on to meet the market. Similarly I've done almost no business with them because I won't voluntarily compromise myself "upwards" either

[vodou]

3 hours ago, grapeape said:

Vodou even though the concept of controlling my purchase with contractual terms goes against my interests as a collector, I can’t help but to be on the side of the artists.

I don't view any aspect of this conversation as being anything other than: buyers and sellers. I don't break out "artists", they are just sellers. We're all buyers and sellers everyday. At the grocery store, at work (aren't most of you "selling" your very lifespan in to your employer?), flipping a light switch on, it's all: buyers and sellers.

[Peter L]

It seems like the original intent was related to the artist not seeing the profits of the rapid increase in prices, from going from $80,000 to $800,000 in a year.  I don't see how this would affect some sort of justice for the office.  It would actually hurt the artist.  The artist benefits from when the art increases rapidly and changes hands because the value of their future work could also increase and the prices they sell for.  By preventing the art from increasing in prize for five years, and essentially freezing the price until the hype blows over, it is devaluing the value of the artist's work by artificially depressing it.

[zhamlau]

Sounds fun, I’m all for goofy ornate contracts makes it all so dramatic and mysterious!

[vodou]

3 hours ago, Peter L said:

It seems like the original intent was related to the artist not seeing the profits of the rapid increase in prices, from going from $80,000 to $800,000 in a year.

No the original intent is related to flattening the curve (a concept I believe we all understand now very well) of an artist's career arc. Slow and gradual increases over time are better than tulip mania. It's a bigger subject than I want to go into right now, but the quickie is that if the dealer is able to manage the supply and gradually increase prices over time, then demand will grow more organically with wider buying support at each rung up the ladder. What's been happening instead is that the big public sale means the artist (via their dealer) gets cleaned out and then everybody moves on to the next new shiny thing and the bagholder speculators lose whatever they have into whatever they got stuck holding, but the artist suddenly has no buyers at all a year later when he's next got enough pieces to do a show. A failed show for an artist is the same as a failed film for a rising actor - kiss of death, nobody will bet on you again. Art career over, back to McDonald's and minimum wage.

And there should never be a fine art speculation conversation without a Damien Hirst story, I mean really...it should be a rule or something

https://www.artsy.net/article/artsy-editorial-damien-hirsts-200-million-auction-symbol-pre-recession-decadence

[bernoulli]

6 hours ago, vodou said:

No the original intent is related to flattening the curve (a concept I believe we all understand now very well) of an artist's career arc. Slow and gradual increases over time are better than tulip mania. It's a bigger subject than I want to go into right now, but the quickie is that if the dealer is able to manage the supply and gradually increase prices over time, then demand will grow more organically with wider buying support at each rung up the ladder. What's been happening instead is that the big public sale means the artist (via their dealer) gets cleaned out and then everybody moves on to the next new shiny thing and the bagholder speculators lose whatever they have into whatever they got stuck holding, but the artist suddenly has no buyers at all a year later when he's next got enough pieces to do a show. A failed show for an artist is the same as a failed film for a rising actor - kiss of death, nobody will bet on you again. Art career over, back to McDonald's and minimum wage.

And there should never be a fine art speculation conversation without a Damien Hirst story, I mean really...it should be a rule or something

https://www.artsy.net/article/artsy-editorial-damien-hirsts-200-million-auction-symbol-pre-recession-decadence

Ornate contract is a really inefficient way to "flatten the curve", but it is no more or less than that. There is nothing to oppose in ethical terms. I cannot see it working long term, because enforcement costs will most likely make the agreements worth not much more than the paper it is signed on. 

Hirst is another matter altogether. He was part of a consortium that bid on his art, unbeknownst to other bidders. Shill bidding is a much less defensible practice than slapping some conditions on a public sale.

 

Edited August 16, 2020 by bernoulli

[Brian Peck]

13 hours ago, bernoulli said:

I can't see any reason to be mad about the terms. Sellers have the right to establish any kind of condition they want. Prices will be reduced in relation to the stringency of each condition.

I disagree. Once the art is sold the seller has no right to tell the buyer what to do with it. If the seller/rep/artist thinks the artwork can sell for more then price it at that amount.

[BuraddoRun]

1 hour ago, bernoulli said:

Ornate contract is a really inefficient way to "flatten the curve", but it is no more or less than that. There is nothing to oppose in ethical terms. I cannot see it working long term, because enforcement costs will most likely make the agreements worth not much more than the paper it is signed on. 

Hirst is another matter altogether. He was part of a consortium that bid on his art, unbeknownst to other bidders. Shill bidding is a much less defensible practice than slapping some conditions on a public sale.

 

I don't know how they would enforce it long-term either. I guess if most buyers honor the contract then it would be feasible, maybe.

Personally, I don't like the idea. I'm not an art flipper, and currently have no plans to sell the art I own, BUT, I believe that any buyer should be able to do what they want with what they buy. They now own the piece. They aren't licensing the art, so why should they have to get permission by an artist to resell if they so choose, as well as pay them 15% of the profit? The seller has the power of setting the price, so if there's fear of something being resold for a much higher price, then price it high when you first sell it. But, like others have said, nothing's forced. If a seller wants to set such a contract, it's their right. In the end, potential buyers can choose to agree with the terms or not.

[ESeffinga]

People are reacting to this like they’ve never heard of such a thing. I find it surprising.

In comic OA, BWS was doing this for a while. Have we all forgotten his art contracts already. And it stands as an example of how that stuff either doesn’t work for the artist in the long term or doesn’t last, for all the reasons already argued in this thread.

In the larger art world, art is sold all kinds of ways. I myself have sold pieces to people with a handshake request that if they find themselves ever putting the piece up for sale, that they give me dibs on buying it back (not limiting the price or getting a taste, just to get a heads up before it goes off to auction or trades behind closed doors and I lose track of it entirely). Its never happened, mind you, and it wasn’t a contract. But it is a matter of personal integrity. And while not a contract, word does get around when you are the sort of person that begs a piece loose, or uses your wife or kids as a sentimental excuse to get people to sell you stuff they might not ordinarily let go of, etc.

Even with new blood coming in, the world of comic art isn’t such a very big place. People into certain artists often know each other. We travel in the same circles. Someone’s reputation is still a pretty big deal. So these unofficial verbal contracts, unenforceable, but happen a fair bit in my experience. The nice side of it is often friendships are borne out of that.

As for putting stipulations on sales, depending on where you are, there are already some of these out there. Not just in comic art, but all over. 
 

In the larger art world, many galleries have various stipulations on sales. Things like if you decide to resale a given work, they want it to be through them, so they can “manage” their artists’ sales prices. Or that they have a first right of refusal to buy the work back, for a similar reason.

Art galleries and art reps are in the business not just if selling the work, but managing expectations for an artist. It’s been said in this thread already. 
 

I’d wager there are a fair few folks that Felix has sold art for, whose work wouldn’t sell for what he sold it for originally, if that work was put back out into the secondary market. And yet, I bet if those very same works went back through Felix to re-sell, he could get as much or more selling them over again, as he did selling the first time.

The simplest answer is people that buy from Felix go to him because they know he is the source for that work. He is easy to find, and prices at what it can sell for.

On the secondary market in some random art dealers stash, that work is lost among a jumble of artists. You don’t know what you will find there. Maybe a gem in the piles.  Or on eBay or in an auction house... you have to be plugged in and always on the hunt, going through every single listing to chance upon a particular piece. In other words you have to be committed and hungry for the art. Enough that it is who you are and not simply something you do from time to time.

Not all art buyers are like that. And to them, someone like Felix offers a service to his artists. Visibility, and stability. And for that he gets what he can for his crew.

Someone can argue art is only worth what it sells for in the secondary market. I would argue sometimes the secondary market is too much of a haystack, and some people just want to go to the store to buy a needle.

Its different kinds of collecting and people are willing to accept different things.

I’d happily buy a piece if it’s a work I’ve always wanted, and planned to keep forever. Even if I had to give the artist a chunk of the resale cost, etc. But it’s have to be a piece I know myself well enough to know I’d genuinely never part with. Then the cost is the cost of enjoying it for as long as I live. I just would factor that into any purchase I was going to make. Which in reality, I already do anyway. Contract or no contract.

I could see where a certain type of collector wouldn’t want to buy into a piece that has a contract when so many do not. People speak with their wallets, and their feet. Just ask BWS.

 

 

Apologies to Felix. I use him as an example more often than I intend to, but 1. It’s because he is one of our most visible, participating reps/art sellers on the board. And 2. Because I admire and respect him and what he has accomplished for his artists. He doesn’t need “defending”, if anything he should be admired and emulated by as many reps as possible.

Edited August 16, 2020 by ESeffinga

[Rick2you2]

17 hours ago, zhamlau said:

Sounds fun, I’m all for goofy ornate contracts makes it all so dramatic and mysterious!

You shouldn’t be. Those types of contracts can be very hard to interpret in court and enforce. Part of what I do for a living involves the writing and “enforcement“ of commercial and public works contracts for construction. People get very creative when trying to prevent paying a few hundred thousand dollars of “their” money, and that type of lawsuit is not cheap.

[Rick2you2]

Personally, I don’t like affixing special contract terms like those to art. It would be better to simply withhold a percentage of art from the market to control the future price. Those flippers who drove up the price would profit on what they bought, but would have limited incentive to trumpet the artist as the “next best thing” and really cause the prices to explode. 

I also question whether the latest glittery-artist toy will stand up over time. Using past history in OA to what has gone on in the last 10 years may not be a good indication of the future for reasons raised elsewhere ad nauseum.

 

 

[vodou]

6 hours ago, BuraddoRun said:

...BUT, I believe that any buyer should be able to do what they want with what they buy.

Cool. Does writing easily understood l terms into a Purchase & Sale agreement, for example a holding period qualify as; should be able to what they want with what they buy?

Because, I'm telling you, that's where I'm going as a collector that may open his collection up (again) publicly to the wolves that must make offers on clearly identified NFS pieces. If I do and somebody plays either the cry me a river card or is compelled to offer 3-5x present market value...expect the clause

Does this conversation really require only (future) "buyers" or can we open that a bit and use the standard definition owner when talking property rights, which includes: all owners (both current owner and future)?

If we can agree to that, then...it doesn't matter if the owner is the artist or the second or subsequent owner after the artist...right? The owner is the owner and is due whatever property rights we agree to (ethically) and what the law allows minimally requires (legally).

[vodou]

9 hours ago, bernoulli said:

I cannot see it working long term, because enforcement costs will most likely make the agreements worth not much more than the paper it is signed on. 

This is as it's going to be case by case as to the individual's motivations involved, does the former owner wish to enforce or not -to begin with, and then again the market value of the contractual terms aka "penalty". There are plenty of laws telling us what cannot be part of a contract, such as an agreement toward criminal enterprise. But mostly the door is wide open. I wouldn't write a term like this: Sell or trade (ah ha! some of you might have seen that as a loophole!) X-Men #1 original cover art before midnight January 1, 2025 and you must kill (as in: deader than dead) your first born child or if childless then whoever else is in closest proximity to you at the time (SO, spouse, neighbor, any human) within 12 hours. No, that killing business could get thorny. But instead, this could be a model...

Any reduction of your legal ownership to less than 100% in X-Men #1 original cover art before midnight January 1, 2025 and your penalty to me will be $10,000*

In doing this you're not actually trying "to collect", the heck with that hassle (if possible), you're trying to weed out the wrong sorts upfront. If there's enough teeth to the thing, those on the fence will do a gut-check and either shore up their resolve to dive deeper than usual or take a hike. Nobody wants an unsatisfied judgement for $10k against them in any form if they plan to take a loan out for a car or living space in the future. Even if never pursued past having the judgement so ordered, it really messes things up. Most HR departments run credit checks these days too, so there's that if you're looking/needing a new job.

 

*Or any other number large enough to be onerous to the other person and 'just at/under' the thresholds of both your state and the other person's state maximum for small claims court filing. It could be written as $250,000 too, or whatever, a number so large that it would be well worth pursuing and again, the guy that isn't going to break the agreement isn't going to care if it's $100 or $100k, it's only the guy that "might" or worse "knows he will" that needs to be well-warned off

 

[zhamlau]

3 hours ago, Rick2you2 said:

20 hours ago, zhamlau said:

Sounds fun, I’m all for goofy ornate contracts makes it all so dramatic and mysterious!

You shouldn’t be. Those types of contracts can be very hard to interpret in court and enforce. Part of what I do for a living involves the writing and “enforcement“ of commercial and public works contracts for construction. People get very creative when trying to prevent paying a few hundred thousand dollars of “their” money, and that type of lawsuit is not cheap.

I was being a little facetious . 

[PhilipB2k17]

On 8/15/2020 at 8:22 AM, vodou said:

Speculation on Black Artists Has Gotten So Intense That for Christie’s Latest Sale, Its Curator Is Asking Buyers to Sign a Special Contract

In an effort to thwart flippers, the show's curator Destinee Ross-Sutton has developed a list of terms to which buyers must agree.

Eileen Kinsella, August 13, 2020

https://news.artnet.com/market/say-loud-show-christies-1901685?utm_content=from_&utm_source=Sailthru&utm_medium=email&utm_campaign=US News Morning 8/14&utm_term=US Daily Newsletter [MORNING]

 

Wouldn't it be interesting if we started doing this? Like...the next time somebody approaches you on CAF, stating that something is their grail but could we please also drop the price a bit to fulfill that childhood dream? Oh sure no problem, happy to brings some joy to your life...but please first, just sign and return this "no flipping" contract

This is dumb. You are suppressing the secondary market for an artist’s work. The idea, I suppose, is to create a supply shock that drives up Auction prices For new work in the short term. But it could also have the opposite effect; driving away potential customers by making the new work less desirable and thus suppressing prices. 
 

it creates an artificial market dynamic that probably doesn’t help the artist in the long run.