Buying and Selling Art (Business of Art, 1)

Almost 20 years ago, I wrote a couple dozen essays on the history of painting for BeyondBooks.com, a subscription service that provided online supplementary materials for high-school students. The site’s owners have given me permission to publish the essays (copyright © 2001 Beyond Books) on my website. This essay (lightly edited) is the first of five in the section on the business of art.

Who buys and sells art? Over the millennia, the answer has changed.

Egypt

In ancient Egypt, the largest and most visible artworks (the ones not buried in tombs) were done at the behest of the pharaoh, his officials, and priests.

Hypostyle Hall at Karnak, ca. 1290-1224 BC. Image: Wikipedia

Greece and Rome

Under the Greeks, the state sponsored some works; the Parthenon in Athens is a notable example.

Leo von Klenze, reconstruction of the Acropolis in Athens, painted in 1846. The Parthenon is on the right. Image: Wikipedia

Wealthy  private citizens also commissioned and purchased many substantial works in ancient Greece. The winner of a chariot race in 479 BC erected, as a votive offering at Delphi, an enormously expensive bronze group that included a life-size charioteer, a chariot, and four horses. Only the stunning Charioteer survives.

The Charioteer from Delphi, only surviving figure from a group that included horses and a chariot; mid-5th-century BC. Delphi, Archeological Museum. Image: Wikipedia

We know from excavations at the towns buried by the eruption of Mt. Vesuvius in 79 AD that Romans who were even moderately well-to-do decorated their homes with copies of Greek sculpture and painting.

Courtyard from the House of the Faun, 2nd c. BC, Pompeii. Image: Porsche997SBS / Wikipedia

Alexander Mosaic, copy ca. 100 BC of a Greek painting of the late 3rd c. BC. From the House of the Faun in Pompeii; now at the Museo Arqueologico, Naples. Image: Wikipedia

Cubiculum (bedroom) from the Villa of P. Fannius Synistor at Boscoreale. Metropolitan Museum of Art, Rogers Fund, 1903. Photo: MetMuseum.org

The Middle Ages

In the Dark and Middle Ages, the Catholic Church sponsored most large-scale art, including  massive cathedrals and the sculptures and paintings that filled them. The Church remained a major patron of art through the Baroque period (17th century).

Nave of St. Peter’s Basilica, Vatican, 16th to early 17th c. Image: Jean-Christophe Benoit / Wikipedia

Renaissance

During the Renaissance, the mark of a cultured, wealthy family was owning exquisite works of art. The Brancacci family commissioned an impressive series of frescoes for the walls of their chapel at Santa Maria del Carmine in Florence, including one of the earliest paintings to show the use of mathematically calculated linear perspective.

Masaccio, The Tribute Money, 1425. Brancacci Chapel, Santa Maria del Carmine, Florence. Image: Wikipedia

With the invention of oil paints in the 15th c., paintings on wooden panels and canvas became affordable for merchants and the others of the rising middle class. Purchasers sometimes asked to be immortalized as donor figures, like the man and woman kneeling at the left in Campin’s Merode Altarpiece.

Robert Campin, The Merode Altarpiece, ca. 1427-1432. Cloisters, Metropolitan Museum of Art, New York. Image: Wikipedia

Salon exhibitions

Beginning in 1725, members of the French Royal Academy organized an exhibition of their works nearly every year. Since it was occasionally held in the Salon Carrée of the Louvre, the exhibition came to be referred to as the “Salon.”

Etching by Gabriel de Saint Aubin, View of the Salon du Louvre, 1753. Los Angeles County Museum of Art. Image: Wikipedia

Through the 18th century, works exhibited at the Salon were usually sold to the king, the nobility, and the French government. During the 19th century, when the exhibition was opened to non-Academicians, the number of paintings displayed swelled to thousands. Salon exhibitions stretched to two months and became the best place in Europe to see contemporary art. As many as 50,000 visitors might stroll through the exhibition in a single day. Among them were more and more buyers from the wealthy middle class spawned by the Industrial Revolution.

Francois Joseph Heim, Charles V Distributing Awards to the Artists at the Close of the Salon of 1824; painted 1827. Louvre, Paris. Image: Wikipedia

The rise of galleries

For new and innovative artists, the Salon had a drawback: it was a juried show, and judges could reject paintings they considered poorly executed, insignificant, or radical. As a result, toward the end of the 19th century a new system for selling art began to emerge. A dealer such as Ambroise Vollard purchased paintings from an artist on speculation – without a specific buyer in mind – and displayed them year round in a private gallery, in hopes of attracting prospective collectors.

In this way Manet, Monet, van Gogh, Cézanne and many others who had been rejected by Salon juries found buyers for their works. Of course, the artist received somewhat less than if he had sold the work directly to a collector. On the other hand, he had a more predictable source of income and did not have to spend time wooing collectors. Through the efforts of such dealers, it became common for collectors to request (for example) a Renoir or a Degas, rather than a painting that won a first-class medal in the latest Salon exhibition. By 1900, Salon exhibitions had been superseded by galleries and by smaller, more focused exhibitions.

Auctions

Auctions have been used for centuries to dispose of paintings after an artist’s bankruptcy or death.  Only in the 20th century did selling paintings at auction become big business. At Sotheby’s and Christie’s, the two most famous auction houses, hundreds of millions of dollars are bid on paintings every year. On eBay, which has only been around since 1995, works are less expensive, but thousands of paintings and drawings are always up for bids.

Auction at Sotheby’s, 2016. Image: Artero113 / Wikipedia

How does a live auction work? A prospective seller brings a painting to the auction house, where experts estimate its value based on prices that similar paintings have fetched at auction or in other sales on the public record. Together the seller and the auction house set a “reserve”, the minimum amount for which the painting can be sold. On the day of the sale, the auctioneer takes bids from those present, as well as from telephone and online bidders. Whoever bids highest gets the painting, and pays an additional percentage (currently as high as 25%) to the auction house. The seller also pays a commission to the auction house (5% or higher; more on that here).

The record price for a painting sold at auction is $450 million for Leonardo’s Salvator Mundi, sold at Christie’s in 2017.

If you had a similar painting by Leonardo, would you be guaranteed an equal or better price at auction? No.

First of all, your painting would not be in exactly the same condition: a nick, a tear, or a layer of grime could radically change the amount collectors were willing to pay. If your painting were in a later, particularly ugly frame, that would also detract from its value.

A murky provenance could be a major problem. If your painting were unrecorded until two years ago, many collectors would eye it with suspicion. If your painting were unsigned, or signed in a way that raised the suspicions of Leonardo scholars, your painting’s value would be considerably decreased.

Even if your painting were virtually indistinguishable from the $450-million-dollar Salvator Mundi, the price realized at auction might be very different. Suppose Mr. Smith is determined that his enemy Mr. Jones shall not own this Leonardo. If Mr. Smith can afford to pay millions to satisfy a grudge, you, as seller, may be the fortunate beneficiary. If, on the other hand, the bottom drops out of the stock market the week before the auction, Mr. Smith, Mr. Jones and many others may not bid at all. Selling a work of art is not like selling a stock: the number of buyers is severely limited, and the price realized can vary enormously even from a recent price for a similar work.

Bottom line: buying art for investment rather than personal enjoyment is risky business.

Living artists

What about a living artist who sees his painting resold at auction or by a gallery for five or ten times the price he received for it? Does he deserve a cut of the latest selling price?

In a word, no. He was willing to part with the painting earlier for an agreed-upon price. If the buyer eventually sells the work for more than the original price, the seller is very lucky – it’s rare to do that with the work of a living artist. What the artist gets is publicity, and a higher price on future paintings when collectors see that his works have appreciated in value.

More

  • Upcoming in this series: Art Critics; Museums and Collecting; Conservation; Forgeries. When these have been posted, they’ll be available via “Business of Art” under Obsessions, at right of the page.
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About Dianne L. Durante

I constantly seek out art that's inspiring, thought-provoking, skillfully executed, and/or beautiful so I can share it (in jargon-free language) with others who need and enjoy such art, but don't have time to search for it themselves. As an independent scholar, writer, and lecturer, I focus on art history and history, with forays into food, history, politics, and publishing. My most recent projects are three volumes on Alexander Hamilton, Central Park: The Early Years, Innovators in Sculpture (a survey of 5,000 years of art in 2 hours), and videoguide apps by Guides Who Know. Click on the Books & Essays tab for a list of all books. For upcoming projects, see my Patreon page.

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