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The Back Room: New Steps in Old Spaces

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Before Armory Week sales could give us our next litmus test of the post-vaccine art market, the next major fair on the calendar took over the laboratory.

On Monday, I broke the news that Art Basel had established a CHF 1.5 million ($1.6 million“one-time solidarity fund” for the galleries in its flagship fair just 15 days before the VIP opening. The policy raises a number of important questions about the short- and long-term future of high-end art fairs.

 

What Is the Solidarity Fund?

A pot of money allocated by Art Basel that every exhibitor will be able to opt into (or out of) in the roughly two weeks between the end of the fair and the date they are invoiced for the balance owed for their booths—meaning only once they know their actual sales results.

According to Art Basel, if all 272 confirmed exhibitors opt in, each would receive an additional 10 percent reduction on their square-meter booth rate. (That would bring the total decrease provided to exhibitors to 20 percent; they received an initial 10 percent reduction after committing to the fair this spring.)

 

Why Did Art Basel Do This Now?

Because of exhibitors’ mounting concerns about how the Delta variant and a raft of related, late-breaking health regulations could impact sales and attendance at the fair.

Here’s how spooked people are: In the same letter announcing the solidarity fund, Art Basel also pledged to cover all additional costs incurred for hotel stays and travel rebooking should gallery staff need to quarantine after contracting COVID during the fair. That’s a surreal first.

 

Yikes! So How Are Exhibitors Reacting to the New Benefits?

The dealers I reached were all enthusiastic.

  • “Basel has really gone above and beyond what any other fair has offered so far,” Vanessa Carlos, of London’s Carlos/Ishikawa, said.
  • Susanne Vielmetter called the fund “very encouraging” and added that she “can imagine it will be especially helpful for younger galleries who are traditionally taking the largest risks in participating in the fair.”
  • Tim Blum of Blum and Poe also joined Carlos, Vielmetter, and Kasmin senior director Eric Gleason in saying he felt the fair had now done everything in its power to do amid larger public-health and political forces.

 

But Will Successful Exhibitors Opt Out of the Solidarity Fund?

That depends. Since the fund’s piggy bank stays the same size regardless of the number of dealers who opt in, the payment to each recipient increases with every gallery who opts out. Art Basel global director Marc Spiegler told me he hopes this incentivizes galleries with healthy sales to “pass that reduction on to their colleagues who need it.”

But Art Basel will keep all information about the fund’s beneficiaries confidential, which sets up a fascinating sociological experiment in the high-end art market.

  • Will anonymity and thrift drive some top-selling galleries to take the free money anyway, as several rich corporations (including Shake Shack and the Los Angeles Lakers) did when the U.S. offered billions in small-business loans via the Paycheck Protection Program?
  • Or will successful dealers leverage the outsized marketing value of publicizing their give-back to their struggling comrades, likely in the same press releases announcing their sales results at the fair?

I think many, if not most, dealers who do well at Art Basel will do the latter… but maybe not all of them.

 

Will the Solidarity Fund Set an Art-Fair Precedent?

Probably not among Art Basel’s competitors. No other fairs released their own codes of conduct after Spiegler and company issued their Art Market Principles and Best Practices in 2017. Frieze also insisted its sliding scale for booth fees had been in the works well before Art Basel announced in 2018 it would charge a progressively steeper square-meter rate to exhibitors renting larger stands.

But Art Basel may have a harder time treating the solidarity fund as a one-off at its own fairs. As author Yuval Noah Harari (of Sapiens fame) wrote early in the pandemic, “temporary measures have a nasty habit of outlasting emergencies, especially as there is always a new emergency lurking on the horizon.” That seems especially true with Art Basel Miami Beach set to open in Florida, arguably a worse COVID hotspot than Switzerland, less than three months from now.

A last point worth remembering: This spring, Art Dubai piloted a scheme allowing exhibitors to mitigate their risk of COVID disruptions by paying nothing up front in exchange for 50 percent of sales proceeds up to the value of their booths. It worked so well for all involved that the fair will now reprise the plan for “young galleries” in 2022, according to CEO Ben Floyd.

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The Bottom Line

Despite the high marks the solidarity fund has received so far, what matters most in the short term is whether collectors travel to (and actually buy at) Art Basel. I’m sure the fair is mobilizing heaven and earth to try to ensure they do, but no one knows the outcome today.

Looking further ahead, the solidarity fund does address a longstanding structural problem in high-end art fairs. If it proves to be as popular among exhibitors as the early returns suggest—and if much of the fund indeed goes toward only the neediest galleries, without serious scandal—then Art Basel might feel it’s good long-term business to find a way to change its tune on the fund’s longevity, especially in a climate where even major dealers (like the newly formed LGDR) are pledging to permanently and drastically dial down their fair spending.

 

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Paint Drippings

Wet Paint will be up later today, but here’s what else made a mark in the industry this week.

 

Art Fairs

  • Frieze London could be threatened by the U.K. government’s last-resort plans for a “firebreak” lockdown in October should coronavirus hospitalizations continue to rise at the current rate.

  • Paris’s Salon Galeristes, which was slated to take place alongside FIAC in October, is the latest boutique art fair to pull the plug on its 2021 edition.

  • Emerging art fair Paris Internationale will forge ahead with its seventh edition, which runs October 20–24 at 186 Avenue Victor Hugo.

  • Organizer 4heads has cancelled the Portal: Governors Island art fair due to COVID concerns.

  • Boutique fair Eye of the Collector (September 8-11) and Photo London (September 8–12) have opened the fall art fair season in London.

  • Legs (1969), a scandal-plagued, monumental outdoor sculpture by Larry Rivers, sold for $100,000 in the opening minutes of last weekend’s Hamptons Fine Art Fair, according to the New York Post.
  • The Dallas Art Fair has pledged to donate $50,000 to Planned…

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