Art Collection Management 13 November 2013 sothebysinstitute.com
Art Collection Management 13 November 2013
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I. COLLECTION BUILDING
II.ESTABLISHING THE SCOPE AND VALUE OF A COLLECTION A. INVENTORY MANAGEMENT B. VALUATION
III.COLLECTION MAINTANENCE AND HOLDING COSTS A. INSURANCE B. SHIPPING, HANDLING, INSTALLATION C. CONSERVATION
IV. THE PUBLIC AND PRIVATE WORTH OF COLLECTIONS A. SHARING COLLECTIONS (DISPLAY, LOANS, PUBLISHING) B. ART INVESTING AND FINANCING
v. PARTING FROM COLLECTIONS A. DE- ACCESSIONING, GIFTING, ESTATE PLANNING
Collecting Objectives
• Personal Vision• Conceptual Theme• Vertical Collecting (Buying in Depth)• Horizontal Collecting • Crossover Collecting• “The Very Best”• Medium
Collecting Sources
• At Auction • Dealers• Artist’s Studio• Online• Via Agent Due Diligence
Collection Management Systems (CMS)
• SoftwareArtsystems/Gallery ProArtBaseThe Museum SystemFilemaker Pro (My Art Collection)
vs.• “The Cloud” iCollect/CollectorSystems (Sotheby’s Official Client
CMS)
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Art Detail
My Art CollectionArt List
Valuation
Valuation v. Appraising
What Kind of Value?
Valuation Factors
Authenticity
Quality
Rarity
Condition
Provenance
Publications and Exhibition
Insurance• Art Insurance
• Explosion of art market = Explosion of insurance business
• Premium revenues have increased by 30% in last 5 years
• U.S. is fastest-growing market; Brazil
• Increased values also mean increased liability
Why Insure? DESTRUCTION
Jackson Pollock, Drips on Black partially destroyed in Corral Canyon Fire 2007
Why Insure?DAMAGE PARTIAL LOSS
Picasso’s $138 million La Reve – post elbow
Issues for InsurerAt-Risk Addresses: Florida
Issues for Insurer:HOTSPOTS
Momart Warehouse Fire, London, 2004
How much to insure for?
Richard Prince, Man-Crazy Nurse
No.2 sold for $7,433,000
at Christies, May 2008
2003:
Nurse painting purchased for
$100,000
2006:
Same Nurse painting valued at
$250,000
New buyers from Russia, Middle East
and Asia concentrate on artists with
momentum
Title Insurance
When is title not clear?
Theft, Liens, Divorce
Provenance Gap
Reassure Buyer
Muddy Ownership
.Note: most reputable dealers guarantee clear title and auction houses offer warranty
• Suffland Holdings v. Gagosian Gallery (Mark Tansey) 2010 – Consignor forgot work had been partially gifted to Met when signed
representation of warranty to title
ShippingInternational Freight
• 9/11 Commission Act of 2007
– TSA screens 100% cargo on passenger aircraft (some shipping companies are Cargo Screening Facilities)
ShippingMitigate Risk
• Reputable Art Handlers → ICEFAT (International Convention of Exhibition Fine Art
Transporters) www.icefat.org
• Before anything is shipped: → Condition Report with Images
• Correctly Packed: Crate, Travel Frame, Conservation- → Grade Soft Packing Materials
• Most Direct Route Possible
Shipping
Road Freight− Air-Ride Suspension; Humidity, Temperature Control− Security Tracking− Alarm− Consolidated Shipment? → LOFO (Last On, First Off)− Is Someone with Artwork At All Times?− Can Art Be Unloaded in Building?
By Courier Delivery− Must be supervised− Signature constitutes owner’s approval of arrival condition− Conservator should be on hand for valuable and vulnerable
pieces
Shipping Customs
Generally: Fine Art is Duty Free
→ But what is “Fine Art”?
• “executed entirely by hand” -- YES• Antiques over 100 years old – YES• Disassembled “light art” – NO! (EU)
→ Haunch of Venison Case (2010)
= VAT 20% instead of 5% + Customs» Viola and Flavin works are “wall lighting” and “fixtures”
INSTALLATION
INSTALLATION• Does it fit??
• Avoid Direct Sunlight – Ultraviolet radiation (cumulative damage cannot be reversed)
− solar shades− UV filters/Glazing− Rotate works
• Location (Radiators, Fireplaces, Under Sprinkler Systems, Near Heaters)
• Humidity fluctuations (optimal: stabilized between 40-60%)− Beware of spotlights (heat)
• Sculpture and Objects: consider plinths, display cases, bases and mounts
Conservation
Only 5% of the world‘s artworks will survive the next 100 years!
ConservationDAMAGE
ConservationINHERENT VICE
ConservationCLIMATE CONTROL
Hygrothermograph
SHARING COLLECTIONS
Don and Mera Rubell
SHARING COLLECTIONS
• Exhibition Loans• Duration?/How many venues?• Security?/Climate control?• Publication?
• Insurance?
• Costs?• Courier?• Replacement work?• Immunity from Seizure?• UCC-1
SHARING COLLECTIONSFoundations
Rubell Family Collection/Contemporary Art Foundation
PARTING WITH COLLECTIONS
DE-ACCESSIONNo more room/doesn’t fit
27 Rue de Fleurus, Paris
PARTING WITH COLLECTIONS
• Tired of the Artwork/Change of Taste
• Raise money to buy more art
• No more room/doesn’t fit
• Approaching end of life/priorities shifting
PARTING WITH COLLECTIONSDE-ACCESSIONING: SELLING
• Auction - open, public (not discreet), transparent, but all at once can be a risk
• Private Sales − Dealer – or not
− Conflict? Selling
• For multiple pieces: De-accession Plan− Analyze Each Market Sector
− Don’t Flood the Market
PARTING WITH COLLECTIONS ESTATE PLANNING
GOALS1.Respect collector’s wishes vis-à-
vis collection2.Reduce tax burden on estate
PARTING WITH COLLECTIONS
ESTATE PLANNING: GIFT/BEQUEST
Dorothy and Herbert Vogel National Gallery of Art
Washington, DC
DONATE WORKS TO
CHARITIBLE INSTITUTIONS
(Collectors Deduct FMV)
PARTING WITH COLLECTIONS“BARGAIN SALE”
Sammlung Berggruen Heinz BerggruenSold works to Berlin’s State Museums for $129 million,1/10 market value
PARTING WITH COLLECTIONS“BARGAIN SALE”
= Sell Works to Museum for Reduced Price
•Cash strapped museums acquire desirable works
•Collector gets deduction + funds to enjoy or use to defray estate costs
Art Collection Management QUESTIONS?
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