Galleries 'Shill' for Artists

New York -- Last May, at Christie’s New York, the painting Park Avenue Façade by Abstract Expressionist Michael Goldberg soared to $461,000, well above the $100,000 to $150,000 estimate set by the auction house.

The new artist’s record was set by Michael Rosenfeld, the Manhattan gallery owner who represents Goldberg’s estate.

Art collectors of Art Kabinett social media network are accustomed to seeing gallerists 'shill' for their artists at auction.

When artists agree to be represented by a gallery, they usually work out with the gallery owner such matters as the amount of the dealer’s commission; how often their work will be exhibited in solo or group shows; the price of their artworks; that sort of thing.

Another expectation, usually not as explicitly stated but increasingly crucial, is that the dealer will attempt to control the market for the artist’s work even after it has been sold.

Some dealers go so far as to bid up, and even buy, pieces when artworks are consigned to auction. The practice is legal.

Control of Secondary Market

Artists often look to their dealers to do something when their work comes onto the secondary market. “We are in conversation with our living artists about work that arrives at auction, and we attempt first to place works in collections that are not speculative,” said John Cheim, partner in the Manhattan contemporary art gallery Cheim & Read.

Artist Kiki Smith, who is represented by New York’s Pace Gallery, expects her dealer “to care about my work and the market for it, and do whatever they need to do to make sure nothing goes wrong.”

Not every artist feels that way—sculptor Vito Acconci claimed that he never thinks about the relationship between his primary and secondary markets.

High-Stakes Gamble

Public auctions are high-stakes gambles for artists and their careers, informing the world that someone wants to get rid of artworks they own, and strong interest in the work up for sale cannot be guaranteed.

As a result, galleries try to convince owners of his artists’ works to resell works through their gallery, who has a longer period of time to find buyers and a lack of collector interest can be hidden.

Some dealers go further, requiring buyers of certain artists’ works on the primary market to sign an agreement assuring that the works will be resold exclusively through them or donated to a museum. “I have used these clauses on every invoice since I opened the gallery,” gallery owner Andrea Rosen said.

Clients often appreciate that galleries will be supporting the secondary market prices of their purchased works.

These days, escalating prices have put more pressure on dealers to maintain upward momentum of their artists’ prices, and with more bidders acting through agents or bidding on the phone, auctions are less transparent than ever.

Dealer-Agents

Dealers who are bidding may be acting as agents for other collectors, who wish to remain anonymous, or they might be building up gallery inventory.

The London art dealer Jay Jopling paid £2,546,500 ($4,365,678) at a contemporary art sale at Christie’s London in July for My Bed (1998) by Tracey Emin, whom he represents. That price was five times the previous auction record for the artist.

Mr. Jopling later revealed that he was bidding on behalf of Count Christian Duerckheim, a Cologne-based collector, who promptly loaned the work for 10 years to London’s Tate Modern museum.

Auction houses regularly contact, and send sales catalogues to the known collectors of the artists in their sales, and they also “notify artists’ dealers when we are offering works by the artists they represent,” according to a spokeswoman for Bonhams auction house.

By the time of the sale, the auction houses have some idea of the level of interest in various lots, and they “may tell the dealer that there isn’t so much pre-sale interest in an artist’s work, so you might want to come in as a bidder,” said Pilar Ordovas, former European head of Christie’s contemporary art department and now a private dealer in London.