This report considers the conditions that transformed the art world in the aftermath of the global financial crisis, and evaluates the consequences of this radical shift with the aim of encouraging a constructive debate between the many stakeholders of the art ecosystem.
From an institutional perspective, reduced public funding forced art councils to change their model and rely more on philanthropy, encouraging curators to become fundraisers in the process. This created an opportunity for corporate sponsors and leading commercial galleries to steer museums towards blockbuster shows of a blue-chip art, consolidated international brand status for all involved and created a global art language in the process that was further promoted by media coverage. Though the relationship has proven productive, the numbers-driven exhibition economy raises critical questions about curatorial agency and cultural content creation. Regional museums and commercial galleries with weak branding were most hard hit, further widening a culture gap between the region and the metropolis, the bridging of which should be considered a priority by today’s art ecosystem.
In parallel, the report examines the rise of blue-chip art in the wake of the financial crisis, perceived by investors either as low risk on the basis of staggering auction results, or as a creative way of finding regulatory loopholes. The ensuing price hike, accompanied by a shift of the sales from the primary to secondary market, granted auction houses a substantial advantage in their core business, transforming them from a dealer platform into an international stage for collectors. In tandem, the balance of ‘closing deals’ migrated from galleries to an ever-increasing number of international art fairs, placing all but the leading galleries under considerable pressure that has led to an attrition of the mid-tier galleries, the former mainstay of the market, along with their representation of emerging and mid-career artists. A dozen galleries that emerged as leaders with business models defined by blue-chip stables, museum-quality exhibitions, presence in major cities, and strong branding that branched out into publishing, hospitality and destination art tourism. A concentration at the commercial apex which may threaten the art world with a monoculture.
The final endorsement in the form of financial innovation has consolidated the position of blue chip art and its champions, drawing a new generation of art collector/investors into art as an asset class that promises to generate liquidity, that can be used to raise loans and even securitised, and has become the fourth most popular collateral after real estate.
The speed and stakes of this evolution transformed art into the new frontier of conspicuous consumption and generated enormous wealth but has also challenged the art ecosystem. In a market that did not mature as rapidly as it grew, regulatory loopholes have created confusion and well-documented opportunity for tax evasion and money laundering. While technological advances such as Blockchain or digitally supported regulations may well lift the veils on the opacity of the market in the near future, the focus of the foundation remains on the collaboration between the private and public cultural sectors that can contribute to the sustainability of institutions in the 21st century.
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Montabonel, S., Vives, D.: When Financial Products Shape Cultural Content, by Art Institutions of the 21st Century for Alaska Editions, London, 2018
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