It’s August. No one wants to read yet another in-depth analysis of business trends.
So this is a column about art.
Why art? For one thing, the art market is booming: New galleries are opening and paintings by “serious” artists are selling at record prices. Some Hollywood moguls prefer looking at a painting than a movie.
Besides, the boom in the art world points up a key reality of the Great Recession: the gap between the have-nothings and the have-too-much-of-everythings. In Hollywood, as elsewhere, those caught in the middle represent an endangered species.
If you want a hint about where the big bucks reside, survey the Wall Street Journal’s newly published chart listing the decade’s big earners. There are some familiar names: Barry Diller pulled down $1.142 billion, Steve Jobs $748.8 million, Terry Semel $489.6 million.
While the big companies in Hollywood, as elsewhere, are richly rewarding their top execs and also stashing away an estimated $2 trillion in cash, they’re still chopping employees and shaving expenses.
One symptom of the changing economy: Even as foreclosures climb and the repo man closes in, the market for art is sharply on the rise. Stephane Connery, who presides over impressionist and modern art at Sotheby’s, notes that there are 50% more bidders at auctions than there were five years ago. “There are more and more people around who have staggering amounts of money,” Connery reports.
Christie’s sold $2.57 billion in art in the first half of 2010, a 43% improvement over last year, while Sotheby’s claimed $2.2 billion in sales. One Picasso sold for $106 million while a Giacometti bronze bust went for $53.2 million. (On the other hand, a Monet priced at $47.7 million had no takers.)
Emma Gray, a respected consultant, moved from New York to Los Angeles a couple of years ago in response to the town’s “increase in energy and activity” — new galleries, hot new painters and more bidders.
Hollywood has always had its serious collectors: Edward G. Robinson knew as much about the classic painters as he knew about gangsters, and Hedy Lamarr was famous for buying art but never paying for it. The fraternity of avid collectors these days ranges from stars like Steve Martin and Jack Nicholson (he kept a Picasso in his bathroom) to execs like Bob Shaye and Dean Valentine to agents like Beth Swofford to moguls like Arnon Milchan to attorneys like Alan Hergott to phantoms like Michael Ovitz.
Predictably, Ovitz is the most controversial of the collectors. Now and then he invites guests to view his collection at his sprawling new home on Coldwater Canyon (he and his wife, Judy, split not long ago) and while some visitors are suitably impressed, one consultant claims, “Ovitz goes for big names, not great art.” Says another: “Mike Ovitz can’t just collect an artist; he tries to orchestrate his career.”
Of all the collectors in the Hollywood community, David Geffen is respected both for his good taste and nimble dealmaking (he sold a Jackson Pollock for $140 million a couple of years ago and a Jasper Johns and De Kooning together for $143 million). Geffen’s prowess placed him in the art stratosphere with such New York collectors as Si Newhouse and Ronald Lauder.
Collecting art is at once risky and expensive. “Unless you’re careful, it’s easy to get caught in an auction that’s rigged,” says one collector. Serious players often compare notes to avoid bidding against one another in situations that seem to be set-ups. Maintaining a collection can also entail insurance fees of $200,000 a year and up.
“It’s all like a great poker game,” says Milchan, whose collection ranges from antiquity to Picasso and Rodin. “I like auctions when they become really intense and when 20 people want the same piece,” In one recent auction, bidding on a Modigliani started at $6 million and spiraled to $45 million.
If the art world is thriving, does that portend that the economy as a whole may emerge from the doldrums? Not necessarily. The world more and more consists of two zones that are separate and distinct.
The view from the top is downright delightful. The view from the bottom — well, it’s not a pretty picture.