The highest segment of this market is not only becoming very speculative, but global investment groups are taking control of shares in some of the most relevant players. They will tell me, and rightly so, that speculation is inherent to this market and that it is not recent at all, but what is new is the oversight that post-war and contemporary art is taking on in relation to other historical periods, and with it, the entry of a good number of emerging artists who are yet to consolidate but who pay a lot for their works in accordance with the expectations of price increases they present.
The traditional channels through which an artist had to follow to increase his prices were clear: exhibitions in the great museums, favorable reviews, rigorous publications, good projects in galleries and solid results at auctions. But with the entry of the so-called red-chip artists, those who quickly gain price and visibility on the networks, this entire sequence has been disrupted. Digital artists and their NFT creations would be a paradigmatic case, as they went from being unknown in this industry to achieving record sales comparable to the most sought-after living artists. Undoubtedly we will have to see what happens over the years with their markets, but those of us who have been involved in art for some time already know of a good number of those that promised a lot have not met expectations, if not disappeared. All of which makes this market more fragile, more manipulable and less secure.
A few weeks ago, professionals committed to the arts from Sotheby’s and Christie’s in London complained to me that, with the entry into auctions of so-called third-party guarantors, that is, investors who guarantee minimum sale prices and agree on a commission in case they the work is awarded for higher prices, this business resulted in pure speculation, becoming a financial market in the hands of wealthy short-term investors who invested in art as well as in derivatives. The directors of the finance departments of the auction houses, capable of understanding the intricacies of these financial businesses, took on a leading role never seen in this industry, as they became generators of benefits.
Next week I’ll tell you how these investors are also gaining control of key auctions, galleries and fairs.
