What We Learned this Week (2404)
Max Hollein Joins Warhol Foundation Board as Richard Dorment Renews His Criticism of its Leadership + Richard Prince Settles + Phillips New Deputy CEO Amanda Lo Iacono
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In This Issue
Lot Watch: A £16m Hockney pool with the same owner since 1968 stars in Christie’s London sales
Notes: Joe Lewis enters guilty plea against insider trading charges; Richard Prince settles long-running case without admission of infringement; Some news outlets get confused about the Prince settlement; Van Ham sees sales volume rise by 40%.
Max Hollein Wades Into the Warhol Foundation: Richard Dorment’s new book revives allegations of bad faith at the Warhol Foundation as the Met’s Max Hollein joins the board
Phillips Names Amanda Lo Iacono Deputy CEO: As Ed Dolman resumes the CEO’s reins, Lo Iacono takes over some duties from former CEO Stephen Brooks
Weird Scenes Inside the Gold Mine: The latest for the Rybolovlev revenge trial
A £16m Hockney Pool at Christie’s in London
We are entering the ninth year of David Hockney’s market rise. In 2009, the highest price for the artist achieved at auction was the $7.9 million paid for Beverly Hills Housewife from 1967. It was not an auspicious year to tell high value art let alone a Hockney. But the heirs of Betty Freeman, the nominal housewife depicted, didn’t really have a choice about when to sell her art. Starting with the November 2016 sale of Woldgate Woods, 24, 25, and 26 October 2006 for $11.7 million, the Hockney market has risen dramatically. In November 2018, the top price of $90 million was set for Portrait of an Artist (Pool withTwo Figures) from 1972 which may be the most fully wrought of Hockney’s pool paintings. An earlier pool picture from 1966, The Splash, was sold for $29.8 million in February of 2020. Now Christie’s has announced the sale of California from 1965 with an estimate in the region of £16 million, as the auction houses sometimes like to say. This work was bought by the consignor in 1968 and has remained in their hands since. The owners were somewhat jealous of the work because they would not loan it to the Los Angeles County Museum of Art for a retrospective of Hockney’s work in the 1980s. Hockney wanted to see the work included so much that he repainted the picture in 1987. Which means there are now two versions of the work.
Joe Lewis Pleads Guilty to Insider Trading: Although still awaiting sentencing from a judge, Joe Lewis—the largest shareholder in Christie’s during the 1990s when the auction house was a publicly traded company— has agreed to plea guilty, pay a $50m fine and resign from the boards of any publicly-traded US companies while unwinding some investments over a five-year period. Lewis admitted to giving employees, friends and girlfriends material non-public information they could trade upon. Lewis is 86 years old. It is unclear how likely a judge is to send him to prison. Among the holdings in his $6.1 billion fortune is a controlling interest in the Tottenham Hotspurs Premier League football club. But Lewis is also known as a passionate art collector, one of the first collectors to turn his large-scale yacht into a home for his best works. He’s also known for his pioneering role as a financial guarantor for art collections coming to auction. The Panama Papers leak of Mossack Fonseca’s files revealed Lewis’s role in the pivotal Sally and Victor Ganz collection auction of 1997. The Ganzes owned some paintings that would eventually become among the world’s most valuable, including Picasso’s Le Reve and Femme d’Algiers (version O) which both later sold for prices above $150 million each. Lewis had arranged to buy the paintings from the Ganz family before the sale through an offshore company detailed in the Panama Papers.
Richard Prince Settles New Portrait Litigation: Eight years after Donald Graham filed suit claiming Richard Prince infringed upon his copyright with one of his Instagram new portraits and four years after Eric McNatt filed his own suit, Richard Prince has settled the litigation a few days before the first trial was set to begin on January 29th. “Mr Prince made no admission of willful copyright infringement,” the artist’s legal team said. “Following the judge’s recommendation of mediation in the two cases (and as the cost of litigation was multiple millions of dollars and the total amount at issue in both cases combined was under $200,000), the parties completed the mediation process and ultimately prepared a mutual consent settlement agreement whereby Mr. Prince agreed to allow judgment entered.” Prince did not pay legal fees for either party’s lawyers. “After 8 years of litigation while making 8 figure demands for damages and the additional requirement of Richard admitting infringement,” Matt Gaughan, Prince’s studio manager said, “plaintiffs approached us on the eve of trial to settle for cents on the dollar and no admission of infringement. We’re very happy with that. This settlement allows Richard and all of the artists to move forward with their practices."
Some confusion around the Prince settlement: The Art Newspaper, and Courthouse News are reporting the Prince settlement as a loss for Prince on the issue of fair use. But that misreads what happened today. The judge did not rule but filed the settlement between the two parties. On Friday, Judge Sydney Stein had ruled that Prince was free to argue fair use for his work in the trial. Previously, he had ruled in a way that had confused the plaintiff. On Friday, he clarified that his summary judgment ruling was only to say that he could not rule in favor of Prince’s fair use as a matter of law. That would have to be argued before a jury. That change seemed to break the deadlock between the parties and Prince which allowed for a settlement. Whether a jury would have decided in favor of Prince’s fair use is really unknowable. But the fact that the judge was allowing his lawyers to make that argument put Prince in a much stronger position and the plaintiffs in a weaker one.
German Auction House Van Ham Sees 40% Rise in Sales Volume in 2023: Cologne auction house Van Ham released their 2023 sales figures at €53.8 million which is a 40% rise of the previous year. With 9400 lots and 80% of sales volume coming from Modern and Contemporary art, Van Ham claims second place among German auction houses.
Max Hollein Wades Into the Warhol Foundation
There’s a great deal of talk around the art market about the need for regulation to ensure participants can have faith in the fair functioning of the market. Calls for regulation—or, more accurately, complaints about the lack of regulation—fail to clarify what form regulation of the art market might take. Former art critic Richard Dorment’s new book Warhol After Warhol, while in no way intended to address the subject of art market regulation, raises a very important warning about the art market’s existing institutions ability to regulate itself.
Dorment’s book is an odd one. It recounts in great deal his role in a public controversy more than a decade ago surrounding the Andy Warhol Foundation’s decision to stamp a Warhol self-portrait with indelible ink denying its authenticity. Throughout the book, and before that in the pages of the New York Review of Books, Dorment has repeatedly and consistently made a compelling, dispassionate and reasonable case for the painting (and the other works from the same series) being an authentic work by Warhol made at his direction and approved by him. The work was included on the cover of an early catalogue raisonné of the artist’s work that Warhol approved. Nevertheless, the foundation’s authentication board went to great lengths to avoid explaining their reasoning for denying the authenticity of the work. The foundation also pursued a very aggressive legal campaign against the owner of the denied painting. Afterward prevailing in court, the Andy Warhol Foundation shut down its authentication board citing the cost of litigation while ignoring its own role in forcing the litigation. The Warhol Foundation’s decision has reverberated throughout the art world leading to a number of artists’ foundations to refrain from authenticating works.
Dorment’s book calls into question the Warhol Foundation’s actions. It takes great pains to bring to light the bad faith behavior he believes the Warhol Foundation has engaged in almost from its inception. The issue has continuing relevance after the Warhol Foundation pursued a rash, and ultimately unsuccessful all of the way to the Supreme Court, case against photographer Lynn Goldsmith over their negligent misuse of her image of Prince. That case would have been rightly and much more cheaply resolved by paying a small licensing fee.
The stakes on Dorment’s surprisingly readable accusations (especially for those who read the NYRB exchanges when they were published) were raised this week. Max Hollein, the CEO of the Metropolitan Museum of Art, was announced as a new board member for the Warhol Foundation yesterday. Has Hollein joined to help restore the reputation of the Warhol Foundation or is he risking his own and, perhaps, the Met’s? The Met did not respond to requests for comment.
Art market regulation begins with institutions like The Met and the Andy Warhol Foundation demonstrating good governance and stewardship. Before Hollein’s arrival, the Met suffered its own crisis. If Dorment’s allegations are true, he’ll have his hands full with the Warhol Foundation.
Phillips Names Amanda Lo Iacono Deputy CEO
With the departure of Stephen Brooks as CEO, Phillips announced on Thursday that Edward Dolman would resume the title of CEO while still retaining the title of Executive Chairman. In addition to Dolman, Amanda Lo Iacono will now fill the newly created role of Deputy CEO. Artelligence spoke with Lo Iacono the afternoon of the announcement to get a better sense of her role. The interview has been edited for clarity.
Artelligence: Congratulations on your promotion. Can you describe what it means to be Deputy CEO of Phillips? What are your responsibilities going forward?
Amanda Lo Iacono: I think that it's going to be a be a multi-disciplinary role in a lot of ways. Ed and I will work closely together with Cheyenne, and also J.P. Engelen to continue to refine the strategy of the business, and work on what tactics and objectives we're going to put in place to hit the next phase of our growth plan. In a lot of ways, I see my role as being in service to everybody who works here – hearing what they're doing, what they need, and how they view the market. With a kind of cross-disciplinary approach, I can bring different parts of the business together to bring out the best. We want to take advantage of the scale and size of Phillips, so we can be agile in the market and continue to pioneer new and interesting things for collectors.
Artelligence: Give us an understanding of how you guys view the growth plan.
Amanda Lo Iacono: We're still very much committed to the growth plan in the regional markets that we're already in, and in the collecting categories that we're in—and we want to build on the strengths that we've already locked in over the last decade. But we're also keeping an eye towards the future; how collecting habits and markets are evolving; and where we can see opportunities to augment what we already do.
Artelligence: Traditionally, Phillips has been very strong in the emerging sector of the Contemporary art market. Over the last few seasons, Phillips has gotten bigger collections and bigger lots on a consistent basis. The Contemporary art market hasn't fallen apart the way everyone keeps predicting that it would but it certainly feels like it has plateaued. Does that mean you will have to be more tactical to continue to bulk up your numbers?
Amanda Lo Iacono: The reality is that we are leaders in the Contemporary space – the art of Now. We have a really strong team that can anticipate where those markets are going. But as an auction house, we are responding to collector tastes and habits. The market that we are operating in right now is a bit more discerning. Stephen called it an “intelligent market”; and I think that still stands. Our goal is to consign the kind of property that collectors are really looking for.
Artelligence: On the other end, you've been involved in the development of Dropshop, which is unique in the auction business.
Amanda Lo Iacono: We've been incredibly excited about Dropshop since we launched it in August. It’s a perfect example of something that we did from our position as a Contemporary market leader in response to what we were seeing as collector interests and habits in the market. It's been such a fantastic opportunity to expand our position and role in the broader market; to work directly with artists or those who represent artists; to bring something creative directly to market; and to start making a shift in the way we think about the secondary market. It also puts forward the ability for us to pay resale royalties on anything that comes out of Dropshop and subsequently ends up in a Phillips auction. We've had a huge response from the market, collectors and artists. It has an incredibly deep pipeline, which has been a lot of fun, and it's just going from strength to strength.
Artelligence: Last question which is somewhat related to Dropshop. You are also very strong in the prints and multiples market. Is it something you will try to connect to the Dropshop, something you try to expand, or just a good business that you try and run efficiently and profitably as possible?
Amanda Lo Iacono: What has been really great about Dropshop is that it is creating a Venn diagram between the Contemporary Department and the Editions department. It's breaking down those silos. It's mixing these collector bases and bringing new collectors to both, because there are some who are drawn to the medium and there are some who are drawn to the name. Dropshop has essentially been a way for us to democratize our offering and get the objects in as many hands as possible, which is really why the artists are so excited about it.
Weird Scenes Inside the Gold Mine
The Rybolovlev trial against Sotheby’s is winding down today with the last few witnesses for the defense. Yesterday, former compliance head Jane Levine testified. Today, former CEO Bill Ruprecht should conclude his testimony and cross examination. Sotheby’s lawyers are planning to bring one or two more witnesses. Closing arguments should begin early next week.
So far the trial has been a confusing mix of indirect claims due to the fact that the lawsuit is a bank-shot attempt—off the cushion of Sotheby’s—to get at Bouvier. The theory of the case is that Sotheby’s knowingly helped Bouvier defraud Rybolovlev.
The problem with the case is there’s little direct evidence. We’ve heard repeatedly how secretive Bouvier was. It seems unlikely that Bouvier had confided in Sotheby’s Sam Vallette that he was overcharging Rybolovlev for the works Bouvier bought from Sotheby’s.
Assuming the worst on Vallette’s part, it still seems far-fetched that he was knowingly involved in creating documents that would support higher valuations for an illicit purpose.
Lacking direct evidence of that, Rybolovlev’s attorney repeatedly raises claims that Sotheby’s failed to do due diligence on Bouvier’s transactions despite repeated testimony that Sotheby’s performed proper KYC and Anti-Money Laundering checks on Bouvier. Implicit in Rybolovlev’s claim is that Sotheby’s should have known Bouvier was ripping Rybolovlev off even when Rybolovlev himself was unaware that he was being over-charged by the freeport king.
The KYC line of attack is subtly amusing because of Rybolovlev’s origins as a Russian oligarch. Although Rybolovlev is not on any sanctions list, it is odd to hear his lawyer complain loudly in court that Sotheby’s did not uncover the fact that Bouvier was dealing with a Russian oligarch as the ultimate beneficial owner. Also, the KYC clearance undermines the claim that Bouvier was acting as an agent in his dealings with Sotheby’s where he would have had to disclose the ultimate beneficial owner of the works he was buying.
You also have to feel bad for Rybolovlev’s counsel who is stuggling mightily to make sense of how the art world works. One of the lines of attack centers on Amadeo Modigliani’s stone head that Bouvier bought from Sotheby’s for €31 million and sold to Rybolovlev for €80 million.
At the time, Vallette wrote an email saying he thought the work was worth €70m only to resend the email the next day raising the target price to €80m. On the stand, Vallette offered a reasonable explanation. Bouvier had asked him if he thought it was worth more than €70m. Vallette said he did. So Bouvier asked him to rewrite the note at €80 million.
At several points in the trial, Rybolovlev’s lawyer, Daniel Kornstein, has accused Vallette of representing both sides in a transaction. Except that’s not how it works. Vallette works for Sotheby’s. He always represents the seller, not the buyer. All of his obligations are toward the seller and helping the seller get the best price. Whether he wrote that note to convince Bouvier, or whomever Bouvier was trying to resell the head to, he was acting for the seller to get the best price. But Kornstein has tried to invert this and complain that “Sotheby's was playing with wildly differing valuations.”
It flummoxes Kornstein that Vallette would say the head was worth €80m only to have Vallette’s client accept €31m for the sculpture. But that’s how the art world works. The sellers needed to sell and took what they could.
Further agitating Kornstein, as he complained in a statement to the press after court, is that “just a few years later [Sotheby’s] provided an auction guarantee at $50 million and an estimated sale price of $45-65 million” for the same head they had sold for €31 million. What Kornstein omitted from his quote was that the carved head was eventually sold at auction by Bouvier for $70.7 million dollars, not quite the €80m predicted by Vallette but not so far off to invalidate the opinion. Also, Sotheby’s guaranteed the work at $50m but sold it for $70m which shows you the numbers game is always skewed one way or another.
The problem Kornstein seems to be having, whether because of his need to make a case for his client or because of his lack of familiarity with the art market, is that art values can fluctuate wildly depending on market conditions and timing. Sotheby’s former COO Bruno Vinciguerra testified that “an auction is a moment in time,” which is something that might have cleared up some of Kornstein’s confusion had he been willing to listen. Vinciguerra’s Yoda-like definition of an auction can be extended to say that a price in the art market is just a moment in time.
Three of the five works of art that are repeatedly discussed in the case have market histories that reinforce Vinciguerra’s Koan-like idea. The Modigliani stone head was bought privately for €31m and sold publicly for $70.7 million within just a couple of years. Modigliani’s Nude with Blue Cushion was bought privately by Bouvier for just over $93 million, sold to Rybolovlev for $117 million. Three years later it was auctioned for $170 million. Is there a right price for the work? If so, which one?
The most stunning example of how prices are entirely a function of a moment in time is the fate of the Leonardo. The three owners originally wanted $200 million for the work. We learned in court that they turned down an offer from another Russian collector, Andrey Melnichenko, in the $100 to $125 million range. When Bouvier got involved, he expertly crushed the hopes of the consortium of dealers who owned the Leonardo by having Rybolovlev cancel his appointment to see the painting. That left Bouvier and his point man, Jean-Marc Peretti in a stronger negotiating position. The consortium negotiated a sale at a nominal price of $80 million but they actually received only $68 million and a Picasso painting that was meant to be worth $12 million. Who knows how much it actually fetched when it was sold.
Later, as we all know, Sandy Heller engineered a $100 million third-party guarantee before the spectacular auction at Christie’s that yielded a $450 million sale for the Leonardo. In five years, the Leonardo had been priced up and down from $200 million to $80 million to $100 million to $450 million. Is there a right price for the work? If so, which one?
None of that actually matters in this case. Judge Furman is keeping a tight grip on testimony so the future auction prices of these works won’t be revealed the jury. And they shouldn’t be. The case is confusing enough. Adding the prices only muddies the issue: did Sotheby’s intentionally help Bouvier mislead Rybolovlev?
That’s why so much of the testimony focuses on two documents: Vallette’s email pricing the Modigliani head and the insurance valuation Sotheby’s prepared for Bouvier in early 2015 (after Rybolovlev had already discovered he was being overcharged) that put the insurance value of the Leonardo at €100 million.
Whether the jury will conclude Sotheby’s was in cahoots with Bouvier based upon that insurance valuation and Vallette’s letter is anybody’s guess.