Market Watch: Market Editor Report February 2024

Firstly, we're thrilled to announce that March 8th will mark International Women's Day in 2024. To commemorate this occasion, MyArtBroker will be hosting a live panel discussion featuring prominent women in the arts, all aligned with the 2024 theme of #inspireinclusion. They will share their stories of navigating the industry and rising to their current positions.

Register to join the event on MyArtBroker's Events page.

Here is the art market in February 2024:

The Banksy Market In 2024

MyArtBroker’s Banksy experts Joe Syer, Florence Whittaker, and Helena Poole shared their insights on the Banksy market through a live panel discussion. Over an insightful one hour chat, Joe opened with an overview of the rise of Banksy’s print market and his first editions released. Touching upon authentication, Helena sheds light on Pest Control, Banksy’s exclusive authentication service, which has played a pivotal role in the success and exclusivity of his print market. Helena underscores the importance of Pest Control, highlighting that the certificate is not just a mere addition but an integral 50% of the artwork itself.

Access The Banksy Report: Seven Years In The Banksy Market

Florence and Joe delved into the realm of Banksy prints at auction, recognising the artist's meteoric rise followed by subsequent market corrections. They highlighted the challenge of oversaturation, noting that only one edition of a Banksy print typically enters each auction cycle, leading to a backlog. This system, resulting in an auction queue for sales, prompted discussion on the limitations of the auction model for selling Banksy prints. Private sales, and working with specialists like MyArtBroker emerged as an alternative, offering greater transparency and insights into fair market value (FMV). This queueing system recalls when Banksy released Choose Your Weapon (queue jumping, grey) specifically in response to queue jumpers at the original drop of this print. Wouldn't Banksy devotees hit the jackpot if the artist unveiled a special edition auction queue print.

When asked about investment opportunities in the Banksy print market, Florence highlights the scarcity of specific pieces such as Dumbo and Love Hurts, never before seen in auctions or the public domain. Additionally, she notes the sustained interest in rare artworks within the private market, exemplified by pieces like Pink Flying Copper and Turf War, which are poised to enhance the broader public market landscape. Helena underscores the significance of evaluating the condition when determining investment strategies. Exploring different avenues allows for flexibility, with potential compromises on condition factoring in budget constraints and comprehensive research.

Regarding the future of the Banksy market, while the robust outcomes at Phillips' January auction offer valuable insights, they do not singularly dictate an artist's performance. The forthcoming spring sales are anticipated to provide a more comprehensive assessment of future market trends and artist performance.

Read our detailed write-up on the Live Panel Discussion and tune in to the full panel for even more insights.

MyArtBroker Investment Guides

Throughout February we've launched a series of comprehensive artist investment guides focusing on the most sought-after blue chip artists in the prints and editions market. These guides are the result of leveraging our proprietary technology, including our print market database and a bespoke algorithm. By analysing both auction and private sales data, including buyer premiums and hammer prices, we provide transparent FMV to assist collectors in making informed buying decisions.

Explore our latest case study, where we speak with other dealers in the prints and editions art trade and how they utilise our technology-powered Value Indicator.

MyArtBroker Investment Guide:

1. Keith Haring
2. Roy Lichtenstein
3. Andy Warhol
4. Jean-Michel Basquiat
5. Banksy
6. Stik
7. Damien Hirst
8. David Hockney
9. Bridget Riley
10. Harland Miller
11. L.S. Lowry

February's Most Startling: Disruptions to Traditional Auction Formats

Sotheby’s New Buyer’s Fees

On 1 February 2024, the art world experienced a significant upheaval with the introduction of major changes to Sotheby’s auction fee system. These alterations feature a standardised reduction in the buyer's premium, with a uniform rate applied across all price tiers. Furthermore, the new structure implements a 10% reduction in the buyer’s premium for works surpassing £5 million at the hammer price.

1. For lots priced under, and including, £5 million, the buyers' premium is set at 20%.
2. Lots exceeding £5 million incur a reduced buyers' premium of 10%.

Sotheby’s New Seller’s Fees

Further adjustments have been implemented in seller’s fees. Traditionally, auction houses have negotiated particularly high-value lots to incentivise clients to consign, often offering a zero percent commission fee along with a portion of the buyer’s premium to encourage vendors to select their auction house. Sotheby’s has now standardised this practice across the company. Unless the work exceeds £45 million, Sotheby’s asserts that negotiations are no longer permitted. However, in the dramatic spectacle of auction houses, everything, including negotiations, is up for sale to the highest bidder. Detailed changes are as follows:

1. 10% charge on the initial £500,000, capped at £50,000 if the sale achieves the low estimate of £4.5 million.
2. Works selling between £4.5 million and £18 million the seller’s fee is waived.
3. Works sold beyond £18 million up to £45 million, the seller’s fee remains waived, with 40% of the buyer’s premium returned to the seller.
4. Sales exceeding £45 million are subject to ‘bespoke’ terms.

Arguably the most clever shift to Sotheby’s new fee structure is its introduction of a 2% success fee on lots surpassing the high estimate. This strategic initiative holds significant importance as it incentivises clients to set more conservative price estimates, aiming to achieve a higher sell-through rate and qualify for the success fee. Sotheby’s appears to have devised a solution to tackle the prevalent problem of reduced estimates, a challenge faced by auction houses during the economic turmoil of 2023. Only time will reveal if this approach effectively navigates the delicate balance of managing consignors’ expectations and emerges as the winning strategy amid market uncertainties.

This marks Sotheby’s first substantial fee adjustment in four decades, prompting reflections on the delay. Charlotte Stewart, Managing Director of MyArtBroker, contextualises this against Sotheby’s profit margins from 1984. The sale of Jean-Michel Basquiat's Untitled in 1984 for $19,000 (USD), resold over three decades later for $110 million (USD) (£85.5 million), where the auction houses would have yielded a profit on the buyers premium of approximately £12 million under the old fee structure. With the updated fee system in place, Sotheby’s would have maintained a profit margin of around £8.7 million.

Under Sotheby’s new fee structure, seller’s fees in high-value sales are now subject to 'bespoke' arrangements, what we can envision as intense and exclusive negotiations. However, in the realm of auctions, the substantial costs associated with extensive marketing campaigns aimed at maximising artwork exposure are the primary justification for the high premiums paid to auction houses. This is where MyArtBroker stresses the rise of online sales and innovative art tech tools available that promote market transparency. At MyArtBroker, we provide sellers with a 0% commission fee, covering shipping, condition checks, and comprehensive marketing at no extra cost. Reach out to us for a no-obligation, complimentary valuation from our expert team, to explore avenues other than the traditional, yet revised, auction model.

The Rise Of the New Elites: GenZ Collectors And The India Art Fair

As the art market and auction house landscape undergo profound changes, the primary focus of these changes appears to be centred on driving consignments and expanding the market in 2024. Various market research sources continue to underscore this trend, with particular emphasis on the emergence of millennial and GenZ collectors. The Deloitte Art & Finance Report highlights these younger generations, poised to inherit an estimated $80 trillion from baby boomers, as key drivers shaping the future of the global art market. This forecast finds resonance in insights provided by industry experts, who highlight emerging trends in regions like the Indian art market. For instance, Peter Osbourne of Osbourne Samuel, speaking at an ArtTactic panel during the London Art Fair, underscored the burgeoning potential of the Indian market. Melanie Gerlis of The Art Newspaper further corroborated this view, reporting on India Art Fair’s 15th Edition in New Delhi, noting the evolving art economy in India and the rising prominence of younger collectors. Despite economic disparities, increased accessibility to art through social media and art fairs is driving a surge in luxury goods purchases, mirroring the buying patterns observed among Gen Z and millennial collectors.

A parallel trend was observed in the ascent of the Korean art market, particularly evident in its peak performance in 2022, marked by a trillion-won milestone, largely driven by GenZ collectors. Unlike India, Korea encounters fewer economic disparities and has yet to witness a downturn in its art market. However, both regions share similarities in their growth trajectories, fuelled by an influx of new buyers and the establishment of prestigious art fairs like Frieze Seoul and the India Art Fair. While these two fairs may not boast identical levels of magnitude, their impact is palpable in attracting buyer attention and nurturing the growing interest in art investment among younger collectors. This trend, again, focuses on driving an increased volume of sales, consignments and expansion of the global art market throughout 2024.

Frieze Los Angeles 2024

Frieze Los Angeles returns to the Santa Monica Airport for its fifth edition this year, scheduled to run from February 29th to March 3rd. With 95 exhibitors reported to be participating, we are keenly observing the offerings at the booths, particularly in light of the widespread criticism faced by Frieze London in 2023. Of particular interest is Christie’s collaboration with the Andy Warhol Museum, which will showcase a pop-up exhibition of Warhol’s “screen tests.” These eight silent films provide insight into the artist's relationship with fame, mass media, and celebrity culture. The exhibition will coincide with Frieze LA, hosted at Christie’s Los Angeles from February 27th to March 14th.

Elton John

On the 21st of February, Christie’s New York hosted an auction featuring the Sir Elton John collection, showcasing 49 of the most prized items from the legendary rock star's extensive collection. Spanning a diverse array of items, from rocket cocktail shakers to retro mirror-lensed prescription sunglasses, silver leather high-heeled boots, a grand piano, a pinball machine, and other iconic luxury memorabilia. In addition, the sale also incorporated a selection of esteemed blue chip artworks. One of the standout pieces was Banksy’s Flower Thrower Triptych, a unique canvas piece presented in the artist’s original frame, which garnered significant attention as the highlight of the event. Acquired directly from the artist, its sale price established a new benchmark value for this iconic work. The highest recorded price for an editioned screenprint of this piece stands at £190,500 (including fees), achieved at Sotheby’s in 2023.

Keith Haring's Untitled, a unique Dayglo artwork making its auction debut, also made waves by setting a precedent for its value. The record price for the edition print of this work, Three Eyed Monster, stands at £15,000 (including fees), attained at Phillips in 2020.

For more comprehensive details on the Sir Elton John Collection, please refer to our complete auction report.

March London Auctions 2024

Entering March marks an exhilarating time for the art market as the first round of prestigious auctions unfolds across Christie’s, Sotheby’s, and Phillips during the initial week. Below is the auction schedule, for which we will provide comprehensive auction reports, and several of our watched lots:

1. March 6th, Wednesday: Sotheby’s The Now/Modern & Contemporary Evening Auction
   1. David Hockney, The Twenty First Very New Painting
   2. Andy Warhol, Flowers
2. March 7th, Thursday: Sotheby’s Modern & Contemporary Day Auction
   1. Grayson Perry, The Adoration of the Cage Fighters
   2. Andy Warhol, Monkey (Toy Painting)
3. March 7th, Thursday: Phillips 20th Century & Contemporary Art Evening Sale
4. March 7th, Thursday: Christie’s 20th/21st Century Evening Auction
   1. David Hockney, California
   2. Andy Warhol, Campbell’s Soup I (complete set)
   3. Damien Hirst, Veil of Serendipity
5. March 8th, Friday: Phillips 20th Century & Contemporary Art Day Sale
   1. Andy Warhol, Ladies & Gentlemen (Wilhelmina Ross)
6. March 9th, Saturday: Christie’s, Post War & Contemporary Art Day Sale