Hello, I'm Josh Baer and welcome to the Baer Facts podcast. My colleague Lu Yang and I are on the road in London this week for Frieze Art Fair. Today, we'll talk about the real impact, the so called art market correction, and what the Long Museum selling at auction recently in Hong Kong means for the future of collecting in China. 90 percent of restaurants that open fail. I would say 90 percent of galleries that open are gone within 10 years. It's a bit Darwinian.
In the sense of the big guys can consume the middle and little guys. That's, again, human nature. This is, uh, not a socialist system. This is capitalism in a sort of, um, obvious way.
So what should we say in the beginning? Hello from London.
London calling from our tiny little suite at Claridge's. Hello Josh. Well Yang, nice to see you. Hello. This is a long way from Helsinki. A
longer way from New York. We went to Frey's opening yesterday. As always, what's your first impression? What would you like to share with our audience?
I think you can never be too surprised in the art world that whatever is going on in the real world looks at the surface to have no effect of the art world. So clearly the war in the Middle East should be and may be on everybody's minds, but you wouldn't know it walking through the aisles of Frey's. And we probably shouldn't even be surprised by
that. So obviously you've been coming to London every year for Phrase Week, and we're going to talk about auction a little bit later. Do you get tired of this, or how do you prepare yourself before coming here every year? Do you look for something new, and how's your routine? Maybe share with our audience.
I think the Art Fair model has evolved. If it's October, it's Freeze London. If it's December, it's Miami Beach. If it's February, it's this and that. So, the 12 month calendar of it has made each one a little less important by definition. Freeze began as an alternative model by an art magazine to make art fairs feel and look differently, and... That intention, whether it was realized or not, is no longer part of its mission, so it's a bit Groundhog Day.
Coming from New York, what's the major difference between the art community, the atmosphere in New York and London?
They're better dressed at an opening at Friese than in New York. Maybe not me, but in general, I think it's a group of people that, uh, Older timers wonder, how are all those people VIPs? Who are all those people? The older dealers wonder the same thing at 11 o'clock. There can't possibly be that many ARC collecting VIPs to be allowed in these two buildings at one time, yet they are. We're all a little bit, how did
that happen? For some listeners who might have not been to the phrase, maybe explain a little bit the two buildings and then what's your routine? Which one do you go to? Like, what's the differences?
Well, if you like to be pushed and shoved by a group of people rushing to get in to look at hot young artworks that were already sold before the show opens, then you start at what we call Freeze Normal, which is in one part of Regent Park. Or if you like to take your time a little bit and see things that are a little bit connoisseur like, then you start at Freeze Masters in a much smaller space and manageable.
So I start at Freeze Masters because I know in a couple of hours I'll have seen the art and moved on, and then by the time I get to the other side of the park, a 20 minute walk, I'm in a sort of different state of mind.
How much has the world changed since last year at this time in London and yesterday at the
opening? I think that you're asking about the art market or the world? Or in general. We were in a frothy, everybody's in a genius mode, nothing's available, bye, bye, bye mode was a year ago, waiting for the music to maybe stop. Now we're at a correction point, so there's a little bit of less urgency, and art world auctions and art fairs are built for false urgencies.
Join us after the break as Josh explains how galleries are responding to the recent art market correction, revealing who might be the winners and who are the losers. This episode is brought to you by art and tech innovator, TR Lab. TR Lab partners with artists, foundations, and institutions to develop unique digital art experiences with an educational mission. Visit trlab. com to see how TR Lab is fusing blockchain technology with fine art expertise to pioneer the future of collecting.
Speaking about corrections, when there's a market corrections, you know, they're always... Winners and losers. In this case, currently, in your opinion, who might be, if there are any, whether it's for art categories or art collectors, who will be the, might be the winners, who might be the losers,
and why? The big guys always win. The middle guys always get squeezed out, and the new guys are already always temporary. There's been a lot of hand wringing that I see online. About first it was, uh, one gallery closing. Then it was two galleries closing. Now it's a third gallery closing that had been in business for ten years. That started as, you know, little tiny things and then became sort of like, uh, middle. That's happened forever.
And every time they close, somebody else is going to open. And another five and ten years from now, other people are going to say, I've had enough. I don't want to do it anymore. Or, I'm not, it's not working. So that's all part of the normal ecosystem. I mean, 90 percent of restaurants that open, I would say 90 percent of galleries that open are gone within 10 years. That's normal. If you were looking for a steady income, I used to say, then you should go work at IBM.
But even now, you go work at IBM, you can be downsized and outsourced, and there's no guarantees there. So, it's a natural, It's a bit Darwinian in the sense of the big guys can consume the middle and little guys. That's, again, human nature. This is not a socialist system. This is capitalism in a sort of, um, obvious way. But I would take issue with the term our market correction, even though I use it, that implies that there is something that's correct, that there's a correct price.
And there's never a correct price. I said to a dealer yesterday, I asked the price of something. He said 2. 85 million, I don't know if it was euros or dollars. And I said, so you sat there yesterday and you went 2. 9. That'd be ridiculous. We couldn't ask that. People would think we're crazy. On the other hand, 2. 8, we're not, what are we, giving this thing away?
I mean, these corrections and price things are arbitrary, they're not refrigerators, they're not cereal, they're unique works of art, it's a, not a quantitative kind of thing as much as people think that they have all this data. With that in mind. Galleries are prepared to either have lower their prices or to give 20 or 30 percent discounts, which if you'd asked for last year, they would have looked at you like you were out of your mind. Suddenly, sure, 200 is 170 or whatever.
So, that's, it's a change of perceived attitude, but nothing's changed. In terms
of the artworks offered by, uh, the galleries this year, people always like to talk about the trend. Uh, is there any major shift
or, well, for those of you who weren't there, it was all NFTs. Every booth was just video and N f t. You couldn't find a painting, couldn't find a sculpture. Everybody was paying in crypto, and it was all NFTs. Didn't you find that little yang? N
f t? What is NF t. What is in it?
So that's like, that's gone. That's gone. It was Art fairs have become pretty conservative. Pride paintings, mostly. Domestic size, mostly. Works that people want to consume, mostly. I mean, there's exceptions where people really make statements.
I would say Parts of Free's master set, a whole section that was curated, a term I hate, we'll get to that another time, by Sheena Wagstaff, the former, um, senior curator at the Met, in the studio that really had about five or six artists doing booths and works representing the studio. That was pretty interesting. And that had a different feel to it than here's some inventory we have sitting around.
What I will say that's important is my conversation with many of the dealers, successful ones were, what's it going to be like in a few months? They're looking into next year. What's our budget? Are we doing these art fairs? How's the market going? Not today because they're still coasting off yesterday's sales or sales from June They're like do I sell inventory? Do I go cash? What's my cost of operation?
So they're getting out ahead of planning, thinking not about correction, but about doing less business. And that is. definitely on the front of the minds of every exhibitor in that fair, regardless of how much art they sold yesterday.
After the break, Josh analyzes the recent auctions in Hong Kong, including the broader impact of the Long Museum auction. A private museum in Shanghai that shocked the art world last month by deaccessioning dozens of works at Sotheby's. This episode is brought to you by art and tech innovator TR Lab. TR Lab partners with artists, foundations, and institutions to develop unique digital art experiences with an educational mission. Visit trlab.
com to see how TRLab is fusing blockchain technology with fine art expertise to pioneer the future of collecting.
Let's talk about the auctions. That's also the same way the auction houses here are hosting their show. We went there to have a look at the previews. What are the highlights of this
year? The highlight of this year is that London and Paris aren't New York. So what really counts is New York in November. These are really ways for the auction houses to generate ongoing revenue. So the night auctions aren't even really the point here. The point here for their business is the day sales, because that's where all the profit is. So I'm not quite sure why one would sell at auction in the evening. in London this week.
I think Paris will be a more important barometer because with the simultaneous Perry plus and Sotheby's and Christie's doing more major sales, there's kind of bigger collections going next week. I still think Paris could become the market center of Europe. London is desperately trying to hold its place as number two.
Well, before London Freeze Week, there were auctions, uh, just a week ago, was the auctions in Hong Kong. And of course, everybody was talking about this single auction in South Asia, which is the Lone Museum collection. You want to comment on that?
I think we draw a lot of analysis from 37 works of art spread out over different periods with 11 not selling. So the data in the art market is really skewed in general from few data points. So to look at a different level, the difference between Sotheby's and Christie's totals for the year That might be two paintings. It's not a full years of work. So long museum didn't do so well. I don't think that was the important story. The important story was the various owner sales didn't do so well.
And that has a different characteristic. If you're trying to analyze data, if you have 40 sellers, you might have more information about motivation than trying to get all your data from one owner's motives for selling. It's not about, no one liked the owners of the museum, or why did they have their prices, or why is China selling, just the normal day to day thing that would have been 90 or 100 percent sold. was 75 or 65 percent sold.
That's actually a bigger story than one group of 30 or 40 paintings.
In terms of Lowe Museum, I mean, obviously people are talking about Chinese collectors, Chinese museums. What kind of messages are people outside Asia, outside China specifically, are talking about this? But
they're all speculating. It's like, why do these people do this? I don't think they were really articulate enough in explaining their motivations. So that lends mystery to it. Do they need money? Do they just want to cash in? Were they having trouble getting currency out of the country? Were they trying to support all their institutions? Were they doing something philanthropic? Were they just rolling the dice because they're traders and entrepreneurs and they like...
The action, it could be any and all of those things. We don't often get the real truth as to why anybody's selling. So I think we put a little too much focus on the rise of mainland China and then a little bit too much focus to the sky is falling. It's a global market. There were people buying from France works in those auctions that were consigned by Americans. Sometimes you use that avenue. It's, there's always a new group coming in that's supporting the market.
Remember 20 years ago it was the Koreans, then it was the Middle East, then it was the mainland China, then it was this, and then it was the crypto boys, maybe. And like, somebody will step into the fray, and... And some people will move on. Nothing is new. It's just like, again, the question really is for the listeners that collect art, it's like, what does it mean for my shit? Okay? I don't care how the art market did, except I collect Modigliani, why did that sell badly?
If the Richter did well, but the Modigliani didn't and you're a Modigliani collector, you don't care about the Richter. So I think we're over analyzing all of this.
But maybe for the listeners who are quite new for this, why were people so worried when the announcement came out? Why people feel this is a not so good move for many groups, including artists, including the museum, including certain regions?
Because we're still trying to understand what it means for 170 private museums spread across China. Is that 170? I mean, if it was M plus selling, that would be really troubling sign. This is, you know, Peter Brandt selling. Does anybody care that Peter Brandt is selling in every single auction? He has a foundation that does big shows. Do they care that the rebels sometimes put things at auction and you don't know it? No. So, I think there's...
Such an uncertainty about the political situation in China, there's uncertainty about cash, there's uncertainty about the idea of philanthropy being new in a communist country. All those things together. Make for a moment of like, hmm, what does this mean? And no one really knows what it means.
Now I want to go back. I know what it means,
but I'm not going to tell you.
Uh, from the next episode, maybe? Subscribers only. For subscribers. For those of you who are listening, if you're not subscriber for the Bare Facts newsletter, please do so now. It's a good time.
Or give us five stars and then maybe I'll tell you next time. Yes, please. We can see who does that, so we're keeping track of you.
Thank you for listening to the Bear Facts Podcast, brought to you by the leading news source for the art world since 1994. Our host is Josh Baer. Our executive producer is Luyang Jiang. I'm Will Griffith, our associate producer. Our content strategist is Boliang Xun, and our editing team is Mona Productions.
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