It’s been said that art sales are a frivolous reflection of disposable income. That maybe true of civilian life, but in the corporate sector – where everything is budgeted to the last red cent – the acquisition of art is a whole different story.
Few things are bought on a whim, and everything with the company structure has to have a purpose. At one time it was investment, but increasingly the principle of corporate patronage of the arts is social responsibility and commitment. But let’s first investigate the former, and the curious saga of the American futures broker Refco…
Founded in 1969 as Ray E. Friedman and Co., the firm had over $4bn in approximately 200,000 separate customer accounts. It was the largest broker on the Chicago Mercantile Exchange.
Two months after the company went public, Refco went belly up, with the CEO Phillip Bennett indicted on conspiracy and fraud charges for sweeping $430m of bad debts under the carpet. But let’s leave the questionable business ethics there. Where the company really excelled – and what they ought to be remembered for – is their awesome cultural savvy.
Refco’s collection of 500 original photographic prints – which until the collapse had hung in their New York and Chicago offices – went under the auction hammer recently at Christie’s in New York.
Rather than consisting of the usual suspects of impressionists and cubists, the works comprised of highly collectable photographic prints. Artists like Andy Warhol, William Eggleston, Martha Rosler, and Andreas Gursky had been targeted over a 30-year period by Frances Dimmer – the ex-wife of former Refco chairman Thomas Dimmer (Who, incidentally, wasn’t involved in the scandal). Bought for a song decades ago, the collection was known to and lusted after by art experts worldwide.
When the creditors moved in and seized Refco’s assets, in November 2005, the hearts of serious art collectors everywhere skipped a beat.
“The Refco collection is an outstanding assemblage of contemporary photographs,” Joshua Holdeman, international director of Christie’s photographs department gushed before the sale on May 5th 2006. “The works together provide a highly international review of contemporary photography and its developing role as a fine-art medium.”
To the untutored eye, William Eggleston’s Memphis looks like a snapshot that didn’t make the cut for the family album. His work is characterised by its ordinary and often banal subject-matter – in this case, an unnamed middle-aged woman sat on the wall of a parking lot, taken in 1969.
However, it’s haunting presence cannot be denied. In fact, the print is widely credited as the image that secured recognition of colour photography as a legitimate medium to display in galleries. As such, it carried an estimate of $40-60,000 – a tidy sum for something that isn’t exactly unique. It’s one print out of an edition of nine, taken from the original transparency – which can still be used to make more copies.
The final figure following the frenzied bidding at Christie’s Rockefeller Plaza saleroom was a splashy $144k. The estimates continued to be routinely shattered throughout the 41 lots on that warm and busy spring evening.
Ed Ruscha’s photos of 10 gasoline stations, sold for $192,000 – well above the presale high estimate of $80,000. Sigmar Polke’s photo of a studio corner with hand-coloured additions by the artist, sold for $464,000 – triple the presale high estimate of $120,000.
However, the evening’s coup d’état was conceptual artist John Baldessari’s single lot – an arrangement of five framed colour photos of two praying nuns, a Red Cross nurse, and some body builders. Their faces were all obscured with Baldessari’s trademark colour dots. It soared over the high estimate of $200,000, bagging the creditors a sumptuous $744,000 – the most anyone has ever paid for a Baldessari piece.
UK businessman, Alex Proud owns a chain of hugely successful photography galleries in London and monitored the Refco sale closely. “Photography is a huge growth area in around the world,” he says. “Obviously we’re a little bit more behind the American market, which has always been a bit more mature and photography has been more accepted there but in England it’s been growing fast.”
“If you’re buying photography for investment then you need to buy vintage photography – photographs that were produced at the time they were printed. That’s where the investment is.”
Refco amassed their collection over a few decades, but, says Proud, the corporate sales at the moment are only showing mild growth: “Don’t get carried away. It’s not the sort of thing that keeps me awake at night with excitement in terms of affecting our bottom line, but yes there is increased interest and we do have more sales. It’s definitely noticeable without being like winning the lottery.”
Two days before the Refco sale at Christie’s there were sales being notched up that were beyond even a lottery winner’s wildest dreams at Sotheby’s Impressionist and Modern Art auction. The finally tally was $207m for just 55 lots.
Nearly half that amount could be credited to Picasso’s 1941 masterpiece, Dora Maar With Cat, which was sold to an anonymous buyer for $95.2m. The day after the sale, the New York Post reported that the buyer was Roustam Tariko, a Moscow-based luxury vodka purveyor turned banker. Who, in turn, pointed the finger at London-based Oil and Soccer magnate, Roman Abramovich.
Of course, you don’t have to be a Russian oligarch to start a collection. There are works to suit all pockets. With the aftermath of Refco’s sale, with shaky stock markets making shares look gloomy once again, there’s still plenty of room on the art investor bandwagon. The appeal of art as an investment is simple enough, Proud says.
“You get to buy something that hopefully becomes worth an enormously large amount more in the future, or becomes a family heirloom. And also you get to enjoy a piece of great beauty which brings you great pleasure. I think that’s a very attractive combination for most people.”
Providing you have the eye, of course. He offers a few starters for the nascent investor:
“When you buy archive photography, which tends to be stuff that’s printed more recently by the photographer – maybe 20 years after he took the photograph –then that’s more for visual pleasure. It might be not a bad investment, but it’s not strictly really a collector’s item in the same way as vintage photography is.”
Of course, there’s been a lengthy relationship between business and art that dates back to the Dark Ages. In fact, Renaissance painters like Giotto to Da Vinci, and all the great masters might have been confined to footnotes in the history books were it not for the commissions of wealthy patrons of the time. Some of the most prosperous businesses today are the most visible supporters of the arts.
Financial news company, Bloomberg are one of the most high profile arts patrons. In 2002, the company opened its own gallery – Bloomberg SPACE – within its European headquarters in London. Dedicated to commissioning and exhibiting contemporary art, the gallery is open to employees, clients and the general public. The company also sponsors the New Contemporaries – an annual travelling art exhibition dedicated to the art of students or recent graduates. Further to this, the company’s founder, Michael Bloomberg – current mayor of New York City, donated $138m in 2004 to more than 600 organisations that deal with the arts.
UBS also has a longstanding record of arts patronage. The Swiss banking giant sponsors four exhibitions each year in The UBS Art Gallery, located in the lobby of its offices in New York City. The company’s art collection is comprised of over 900 paintings, photographs, drawings and sculptures by some of the world’s major artists from 1950 onwards; Willem de Kooning, Edward Ruscha, Andreas Gursky, Tracy Emin, and Andy Warhol. In fact, selected works from the collection are on display at the Tate Modern in London until 22nd September.
The biggest of them all is Deutsche Bank, with over 50,000 works and each floor in their Frankfurt office named after an artist. Deutsche Bank recently struck a three year deal to sponsors the London’s Frieze Art Fair. With nearly 50,000 visitors and £33m in contemporary art sales last year, it has become Britain’s most important contemporary art fair.
But, while it’s clear that the artists benefit from corporate patronage, what’s less apparent is what the companies stand to gain from their support.
“The companies gain much the same thing,” says Alex Proud. “They get a sense of feel-good because they’re supporting a worthy cause – which is not bad PR for them – it helps their image and prove that they’re not a boring company, which is increasingly important these days.”
“Different companies have different reasons,” says Matthew Slotover, publisher of international art magazine, Frieze, and director of the Frieze Art Fair. “Bloomberg, for instance, sponsor the arts not at all for patronage reasons but to attract better employees. Some companies, of course, use it for hospitality for employees and also potential clients.”
“In general it’s getting more difficult for public companies to collect art. Shareholders don’t see it favourably and think that it’s a waste of money. Although, actually, if you look at any company that’s collected art in a serious way and then sold it, they’ve done particularly well. But Deutsche Bank clearly understand art, they definitely don’t do it for investment.”
Deutsche Bank’s board member Tessen von Heydebreck explained his company’s position on the arts in great detail during a speech at the House of German Business in Berlin last January. It runs a lot deeper than wheeling and dealing, or good old fashioned chin-stroking:
“For decades, Deutsche Bank has demonstrated a high degree of social commitment. Our experience tells us that supporting art and culture is essential to corporate culture. The Deutsche Bank Art Collection, with over 50,000 works, is the largest corporate collection worldwide. It has been continuously expanding since 1979 under the motto ‘Art at the Workplace.’
Again and again, we see that encountering art on the job becomes an enriching experience for numerous staff members and clients, while the presentation of contemporary and even difficult art in the unusual environment of a bank inspires people to engage in fertile discussion.
Our information society depends on developing and utilising people’s creative potential. One-track thinking cannot do justice to our highly complex world. We encourage our staff to expand and enrich their own personal horizons.”
Of course, that’s all well and good if you’ve been in the game for the last 40 years, but what about the newcomers, the future Deutsche Bank’s who want to get their hands on the tomorrow’s mind expanding artists? Matthew Slotover on the gallery floor with his ear closest to th ground. Where would he steer buyers looking to find something special?
“The interesting thing about art is that it’s gone global, there’s stuff going on everywhere,” he says. “There’s a lot of Poland and Mexico going on at the moment. As usual Germany, America, and Britain are very strong as well, if you look at the auctions.”
There are also movements much further afield he says; “some people are rating Chinese art at the moment. There’s a whole gallery district in Beijing – the 798 complex. I went there in January, it was pretty amazing.”
If our original conceit that art sales reflect disposable income is right, then the proliferation of an art scene must be the sign of a healthy economy.
“What’s interesting about it is, there’s a lot of galleries opening up, a lot of rich Chinese are now buying art – they’re buying Chinese art, and a lot of the foreigners that are going to china are also buying art there. There’s not much interest in buying it on an international level from China – so there’s not much of a dialogue there at the moment.”
That sounds suspiciously like a golden opportunity to me. Would those wishing to exercise a little cultural responsibility and maybe make some money in the long term please form an orderly queue.
Back to the drawing board: The BD guide to corporate sponsorship.
Art is uniquely subjective. There isn’t a single work out there that has unanimous admirers. Even Picassos which sell for $100m attract as many cries of derision as they do sighs of admiration.
The big players in the corporate art market don’t operate blind – they often employ full time curators, consultants, and specialist art handlers to help service their collection. UBS have a dedicated advisory board comprising some of the most influential individuals in contemporary art.
Of course, you don’t have to go that far to get involved. Corporate sponsorship is a great way of aligning your business with an established gallery. Institutions like the Tate Galleries in UK garner a huge revenue from annual corporate sponsorship schemes.
It’s an arrangement that’s agreeable to both parties – the gallery gets to put on high profile shows, and the company scores high profile press kudos for doing it. It’s a win-win situation.
Petra Luckman, consumer marketing manager of American airlines agrees:
“Our sponsorship of Edward Hopper gave us a fantastic opportunity to align American Airlines with the powerful Tate brand. The huge success of the show and the strength of the brand association has helped us to raise our profile within the UK market, particularly to a core ABC1 audience as well as providing a range of promotions and entertainment opportunities for our existing customers.”
The corporate membership package for Tate Britain – a short hop along the Thames embankment from the Houses of Parliament – comes in at £10,000 per year.
For your investment, you get one event with complimentary fee up to the value of £6,000, 50 double invitations to private views for major special exhibitions, 50 transferable corporate supporter cards for free entry to all exhibitions, and access to the Members Room. During a high profile opening like this summer’s Constable exhibition – one of the must-see events of the year – would be a perfect place to entertain clients.
Of course, all the big galleries around the world do similar schemes – the Guggenheim in New York being a particularly impressive venue. But perhaps the biggest bargain right now for getting in on the spectacle is Tate Liverpool’s corporate partner deal at just £3,000. As well as the usual invitations and entry to the big events, there are name credits on the foyer wall, major exhibition catalogues, and the tate website.
With Liverpool’s celebrating it’s nomination as European City of Culture for 2008 – global publicity is guaranteed, and Tate Liverpool is the biggest art brand in the city.
