Chicago gallery owner Rhona Hoffman has three or four collectors she will never sell to again.
“They broke the rule,” says the contemporary art dealer.
This commandment to collectors: if you later decide to sell your artwork, bring it back to the gallery – don’t put it up for auction.
When buyers ignore this rule and auction off recently purchased items, it’s called flipping.
From the dealer’s point of view, flipping is a problem because the publication of auction prices is often at the artist’s expense. Retailers tend to create narratives for their artists, and they believe that in the long run it’s better for the artist to retain control of those narratives and prices. The idea is to build demand at a sustainable pace, rather than risk creating a bubble and then bust.
“Flipping can damage an artist’s career by creating enormous pressure,” says Andrea Teschke, partner at New York’s Petzel Gallery. “While it’s not ideal, I don’t think a collector who sells a work soon after buying it at the gallery poses much of a risk to the artist’s career. Rather, it could set off a chain reaction that could swamp the market and either create a bubble or drown its primary price.”
Ms. Teschke says she “adds a resale clause to our invoices, reminding us to contact us if someone decides to part with a work.”
Other dealers go further, requiring buyers to sign agreements restricting what they can do with their art purchases. Such agreements “are not highly controversial, but they are enforceable,” says New York attorney Judd Grossman. He adds that he has threatened “lawsuits” on behalf of some dealer clients against buyers who want to exchange works. The threat, he says, is usually enough.
However, many buyers shy away from such restrictions. And many artists think they’re better off if the free market is allowed to dictate prices. They believe that dealers may be looking out for the best interests of the dealers – and not those of the artists.
Painter, sculptor, and printmaker Frank Stella, whose work is highly sought-after and often found in museums, says that to his knowledge none of his artwork has been flipped. But he believes collectors “paid for it. They can do whatever they want with it.”
Another American painter, Tom Christopher, says that buyers have turned his works over more than once, and to him the practice is “absolutely wonderful. It draws attention to you. Otherwise, you’ll just have works lying around unsold in your studio. It’s exactly what you want. It’s capitalism.”
Some observers see the rise of page turning as a generational shift in the attitudes of fine art owners. Evan Beard, managing director of private banking at Bank of America,
Many of their clients are contemporary art collectors, says the latest generation of art buyers: “They are market oriented, have a trading mentality, see the artworks they own as part of an asset class and are very comfortable getting in and out of different commodities well .”
New York art gallery owner Sean Kelly says he views the change taking place as a shift that has been accelerated by the pandemic. Shoppers today are “more comfortable buying without actually seeing the items they are buying,” says Mr. Kelly. “It encourages more of a trading mentality. The pandemic has amplified this trend as more buyers view artworks and their selling price history online rather than up close. The emotional attachment to a particular work of art is reduced and the work of art becomes another justifiable object.”
Still, John R. Cahill, a New York attorney representing art collectors, questions these explanations. “Not everyone who gets labeled ‘pinball’ is actually a soulless square,” he says. Some of Mr. Cahill’s clients, he says, are hedge fund managers looking for undervalued assets. Others, he says, “are genuine art lovers who really need the funds that a sale will bring.” There are also art collectors, he adds, who “believe, sometimes correctly, that a large markup at auction or in a great gallery will help an artist’s career”.
Mr. Grant is a writer based in Amherst, Massachusetts. He can be reached at [email protected]
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