From The Art Newspaper:
There was much fanfare last month when the US artist Kerry James Marshall “obliterated the glass ceiling of prejudicial art pricing”, as the dealer and art commentator Kenny Schachter put it, with the record sale of his painting Past Times (1997) in a contemporary art sale at Sotheby’s New York.
The work, depicting a pastoral scene that features black suburbanites instead of white aristocrats, was bought by the rapper Sean “P. Diddy” Combs for $18.5m ($21.1m with fees), making Marshall the highest-paid living African-American artist at auction. But Marshall didn’t receive a cent from the sale.
Under European legislation, Marshall could have earned $14,700 (royalties are capped at this comparatively paltry sum), but in the US, artists are not entitled to a cut on works sold on the secondary market. The state of California recently suspended the collection of royalty payments due to ongoing litigation.
. . . .
Although records continue to tumble in the contemporary art market, reports suggest that artists are getting poorer; the majority of artists in the UK earn less than £5,000 a year after tax, and less than $10,000 in the US, according to the online marketplace Artfinder. In such a polarised climate, should auction houses and dealers not pay their dues to the artists from whom they profit?
The strict enforcement of global resale rights, or an entertainment industry-style model of residuals, would be one way to ensure that artists are afforded a basic income. Another option is to introduce a system whereby artists retain a stake in their own work.
If Robert Rauschenberg had kept a 10% share in Rebus (1955), he would have made $575,000 from its sale at Sotheby’s New York in 1988, according to a paper published in February by the scholars Amy Whitaker and Roman Kräussl, titled Democratising Art Markets: Fractional Ownership and the Securitisation of Art. It is a hypothetical situation befitting of the artist who famously accused the art collector Robert Scull of ripping him off after a 1973 auction that earned Scull $2.2m off the back of cheaply acquired works. “I’ve been working my ass off for you to make that profit,” Rauschenberg berated the taxi tycoon.
Link to the rest at The Art Newspaper
PG can think of some interesting ways for an artist to try to attach a security interest to personal property such as a piece of art to support a continuing contractual obligation attaching to the art for each owner to pay the artist a royalty consisting of a portion of the owner’s profits upon the sale of the art.
He suspects the typical young starving artist would not have the bargaining power with an art auction house or wealthy purchaser to obtain such a royalties arrangement, however. Presumably if an artist’s works are generating large purchase prices on the secondary market, that artist’s new works would sell for a lot of money as well so it’s arguable that the benefits of an ongoing royalties arrangement would mostly go to financially successful artists.
However, PG suspects what amounts to an ongoing artist’s royalty payable upon each sale of an artist’s work would have the effect of reducing the amount a buyer purchasing art as an investment would be willing to pay for a work, thus reducing the amount of money the artist receives upon the initial sale of the art. That might not be what a young artist is really looking for.
Additionally, if an art-loving purchaser wanted to acquire the artist’s work because the purchaser really wanted to have the work in their home or business for their own viewing pleasure (instead of treating it as a speculative investment) and had no intention of ever reselling it, the artist would be unlikely to receive any future income from the piece. Similarly, if the purchaser donated the artwork to a non-profit public museum, presumably, the artist would not be entitled to an additional payment for such charitable transfer.
If you can make a living doing something you love and are extremely talented at you are lucky indeed. The Arts and Sports are areas that many dabble in, but few are able to quit their day jobs. There are significant numbers of artists, authors etc who clearly do have an enormous sense of entitlement, just as there are many who do not. One must feel incredibly entitled to have sold a work and feel that they are being ripped-off when they don’t get a share of later sales. Particularly when insisting on such a term in their original sale would likely have either lost the sale completely or reduced the price substantially.
I’m sorry but I’m of the opinion that you’re only entitled to your original sale. If someone else who now owns your art decides to sell it, you don’t get a piece of their sale, that’s effectively MLM.
If I sell a book to a fan and they eventually decide to sell it, I don’t get (nor deserve) a piece of their sale. I already got my share on the original sale; I’ll just sell another one.
As someone who actually does sell paintings for reasonable amounts of money, and who habitually treats her activities as “a job,” (way to condescend, up there… don’t we get enough of that attitude as writers?), my response to one of my paintings selling for that much money on the secondary market, to such a high-profile buyer, would not be to weep over the money I didn’t receive. It would be to instantly create marketing materials trumpeting to the universe that my work is now worth millions of dollars *ON THE RESALE MARKET*, and to price my next painting accordingly, and reset all my prices everywhere else. Every gallery featuring my work would be getting a phone call from me, politely indicating that there are NEW BUSINESS OPPORTUNITIES available to us, and would you please to be marking everything up crazily, thank you.
The high prices of fine art are predicated on the belief of buyers that their purchases are *investments*, which will continue to accrue in value. An $18.5 million resale tag will prove that out in spades. It doesn’t matter that I won’t make a cent on that purchase. I’m going to be rolling in the dough for all the ones to come.
Heck, after popping the cap on my bottle of $12 champagne from the grocery store, I’d probably write the buyer a thank-you note.
+100
I bid +18,000,000. Apparently I’m the P Diddy of this comment 😉
Rats.
I was going to bid +1,000,000 but I can’t go much higher this week.
Foiled again!
Let them have it for 18M, I sure M.C.A. will be happy to do one for you for a mere million. 😉
way to condescend, up there… don’t we get enough of that attitude as writers?
People can think of their activity as whatever they want. But, when consumers don’t pay enough for the product of that activity, the activity isn’t an economically viable way to make a living.
Books, paintings, widgets… it’s all the same.
No one’s arguing that, and I think it’s disingenuous to portray it that way on a blog where most of us are talking about making a living off an activity most people dismiss as ‘not a real job.’ There are many ways to make money off art, enough that it’s clear that it’s an important part of any economy. The challenge is figuring out how to fit yourself into that picture. I don’t think it’s productive to accuse people of entitlement when they fail.
I don’t think it’s productive to accuse people of entitlement when they fail.
It’s reasonable to accuse one of feeling entitled if he fails in his venture, yet expects someone to pay him so he can continue his chosen venture.
It’s unreasonable to accuse one of entitlement if he fails in his chosen venture, and then does something else to support himself.
Those who cannot support themselves in their chosen venture typically do something else where they can support themselves.
Books, paintings, widgets, gizmos, … all the same.
The first time I encountered this type of thinking was going on 30 years ago, when a bunch of writers were outraged that used book stores existed, and wanted some kind of tracking and registration system put into place that would, essentially, force every copy of a book to have something like the title to a car, and every time it changed hands, whether for a public or private sale, they’d get a piece of the action. Forever.
Under the kind of system they wanted, you couldn’t even *give* a book away without filing paperwork with someone…
Heh, if that had gone through I’d have made ‘them’ have to keep track of every copy at their own cost – oh wait – how many people would buy a book knowing the writer now had their name and address?
“Your records say I have what book of yours? Not seeing it here – oh wait – we were out of charcoal starter on the fourth, I think your book and a couple others were deemed worthless enough to use … What’s that? No, we didn’t save the covers.”
This is yet another example of the argument that certain types of creative people are special snowflakes deserving of special treatment. The law in some jurisdictions recognises this in the form of so-called moral rights.
But the idea that an artist should receive a payment every time one of their works is resold? Why? As PG pointed out, there are various mechanisms for attempting this, though the ones I can think of are far from certain of being upheld by a Court in most common law countries. And even the attempt would probably seriously damage both the prospects of a sale and the price. Would you, for instance, buy a house on the condition that when you yourself sold you would be liable to pay a percentage of the price or the profit to the original developer? Should a master carpenter who makes and sells an exquisite table receive a share of every subsequent sale?
Don’t forget the painter you paid to make you house look good enough to sell – by their way of thinking he/she added value and should get a cut of any sale. 😉
And the architect who designed the house?
We saw something like this here a while back, something about the artist’s contract saying the artist having a say or getting a cut in any reselling of the piece.
Then it becomes a lease – not a sale – as you don’t own/can’t do what you want with it. And I’ll bet a lot of ‘buyers’ wouldn’t be interested in leasing something they want to own, which will lower the prices they are willing to pay.
‘Sold’ cuts all the ties.
A lot of art is bought as an investment and not for any aesthetic reasons. Attach strings to the piece and the investment value degrades or vanishes.
Law of unintended consequences applies.
Oh yes. 😉
And when the first artist gets away with it, the buyers take note and the next artist discovers their work won’t sell for as much – if it sells at all.
I’m surprised by the attitudes here. Maybe it’s the lack of understanding about markets.
First of all, when you sell art the auction house, gallery or private matchmaker already take a substantial cut for their services. So suggesting that people won’t invest in art at all because someone gets a cut if it’s sold is silly, because this is already happening.
And buying a piece in which the artist retains partial ownership is not a lease. In a lease, you own nothing.You are merely renting, and you are not entitled to any benefit from the increased value of the rented item after your lease period ends.
Having said that, many(most?) highly profitable investment opportunities come with strings.
It’s the uncertainty of *future* “cuts”.
Sure, galleries and auction houses take a cut…today. And they earn their present and future cuts by providing a service. What does the artist bring to each future transaction but a tax?
(First rule of taxes: whatever activity you tax you get less of. That’s the logic behind “sin” taxes like tobacco/alcohol/gas/carbon taxes. Taxing art sales works the same way.)
It *will* be factored in.
Just as the recent decision in Canada to prevent a buyer from taking full, unfettered possession of their purchase.
Every time they pile on the liens and restrictions on a sale they devalue the product a bit more and render marginal and risky buys less desirable.
That’s just it, ‘buyers’ expect to be able to ‘buy’ something, after which they can do as they please with it.
‘Renting’ or ‘on loan’ is a different critter – which in most cases doesn’t bring in as many bucks as the ‘buy’ would have for the same item.
If I buy a car I can paint it a new color or add a custom stereo, not so that lease one. The house I bought I can knock out a wall and have a great room, not so a rental. So I’m not going to pay ‘buy’ prices for ‘leased’ objects.
And you shouldn’t be surprised by the attitudes here – we know we can’t charge paper/hardback prices for ebooks. And unlike the artist in the OP, most of us look carefully at contracts, which is why you’ll find us shaking our heads at the writers that sign their work away to publishers – most of which will only see that little first payment no matter how great their story ends up selling.
“Taxing art sales works the same way.It *will* be factored in.”
Felix, an artist percentage is not a tax. Tax is applied after the sale. Will it be a factor in the final price offered by the buyer? Some, yes. But in a high-profile sale like the one we’re discussing, very little. The important factor in a big sale like this one to Combs is how much competition there is for the art.
If you have three people with deep pockets who want that art bad, you’ll get quite a price. That’s how even pro dealers are shocked by the price they got at auction. None of the buyers are thinking, ‘Oh, I’m only to going to such-and-such price because when I sell, (hopefully at double or triple what I’m paying now) I’ll have to give the dealer a percentage.’
And in Combs case, I think he went in prepared to blow the doors off. These big art sales are never just about investing. They are about prestige.
“That’s just it, ‘buyers’ expect to be able to ‘buy’ something, after which they can do as they please with it.”
They can do whatever they please, so long as they do it with the original painting and not reproduced images. When they sell — under the proposed system — they give a small percentage of the profits back to the artist like a royalty. No one likes giving back profits, but we learn to live with it.
“And unlike the artist in the OP, most of us look carefully at contracts”
The artist didn’t sign away their copyright. The point the article makes is that the artist *did not retain a percentage* of their original work, so that they could profit from future high sales. You argued against this practise. Seems unreasonable to both criticize the practise, and the artist who *doesnt’* do the practise you’re criticizing.
I really don’t have a strong opinion about granting % of resales to artists. I chimed in because multiple people apparently think doing this will reduce/stop art sales, or crush the prices art is sold for, and that just isn’t the case.
Why would the artist get back anything more after something has been ‘sold’? Yes, the artist might still have reproduction rights, but that piece itself is no longer theirs if they sold it.
It is just an item, a product of labor. By your way of thinking you should owe Ford a royalty when you sell/trade in your car.
Read TRX below, seems some writers wanted to have the same thing you think this artist should have. It didn’t happen for them and I don’t see it happening for your artist either.
A book, a painting, a car; all objects, all covered under first sale. If a publisher wants to make money on a book they print another one, Ford builds another car, the painter paints another painting.
Anonymous, as I explained, I’m not advocating for this practise, merely pointing out that it won’t have the effect on the art market a lot of commenters think it will have.
Your comment that ‘you think this artist should have’ is incorrect. I don’t think this artist should or shouldn’t have. Nor are they ‘my’ artist.
There is a difference between pointing out a flaw in an argument and taking the opposite side.
I think it will make a difference because the buyers will have to now consider the risks that they may not be able to show/sell/trade/give away something because some third party still controls what they can do with it.
http://www.thepassivevoice.com/heffel-auction-house-takes-to-court-over-barred-shipment-of-french-painting/
I wonder if it would have gone for $678,500 if the buyer had known beforehand that Canada wouldn’t let them take it out of the country.
The fact that people engage in commerce that includes commissions doesn’t tell us much. More important to the buyer is his potential return. Future disposal commissions certainly affect his return, and he adjusts his bid accordingly. Add more future costs, and his bid falls even more. Add lots of future costs, and he does something else.
It doesn’t matter what form the future cost takes, it is all considered by the buyer. Taxes, commission, storage, transportation, royalties… They all get considered, and they all have an effect on market price.
In addition to PG’s note about new works by the same artist:
The question here is – did the artist transfer all rights when he sold the original painting to the first buyer?
If not, those rights of reproduction, now that the artist is famous, are probably worth more than the latest sale price of the painting. The buyer has no legal way to profit further, except for selling the painting at a higher price. Unless the artist was really, really stupid…
Good point. A smart artist would not have included reproduction rights in the sale of the original artwork, unless they were specifically and separately negotiated for, or if it was a work-for-hire. If those rights were included, then either the artist already got paid what he considered a fair rate at the time, or he was stupid and his loss there is his own fault. If those rights were not included, then you’re right, he can likely still make a considerable profit from this sale, even if it’s indirect. If the rights were not clarified one way or the other, then that’s a headache I wouldn’t wish on anyone (and is a good lesson to all of us to clarify those things up front–pertinent to authors in terms of commissioning original cover art).
“If the rights were not clarified one way or the other, then that’s a headache I wouldn’t wish on anyone …”
I’m in that boat, received some art as a gift to use on a website and can’t find the artist to ensure I can use them in the ebooks (so right now there’s a link in the ebook that points at the old webpage. 😉 )
PG or another legal type here can correct me if I am wrong – but I believe the general rule is that unless a right is specifically conveyed (or someone sneaks in an “all rights, present and future, to reproduction and use”) – the right stays with the creator.
Which is why I’m not using it beyond the original permissions.
This is why artists should be more careful who they sell their work to in the first place. If there’s someone out there willing to pay millions, an artist would want to sell directly to that person, not sell it for a much smaller amount to some reseller for them to make all the profit. Reminds me of when I was trying to sell something on ebay for $80. I was contacted by a reseller wanting it for $40, and after talking to them and looking at their page, I suspected they’d turn around and sell it for $80 or close to, at which point I told the reseller no and blocked them from buying anything (just to be safe, so they wouldn’t ‘buy’ it, pay me less, and argue that we’d agreed on that lower price when we hadn’t). I left it listed at $80 and eventually someone bought it at that price.
If I only have one of a thing, I want to sell it to someone who really wants to enjoy it themselves, not a reseller. And I want to get what I think I can get for it.
No, I don’t think an artist should get a cut of a resale of their work. First sale doctrine. Property rights. Etc. Sell it for what you think you can get the first time, because complaining that someone else got lucky or had a better idea of its value and you should get some of that is childish whining.
Similar to rare books, etc. The original author isn’t getting that money and really shouldn’t. Although maybe the original author or the author’s estate can produce a few rare books of their own and make a tidy sum if the opportunity presents itself. Makes me think I should hold back a few special editions of my books just in case. You never know what the future is going to bring with it. I’ll be rich! 😉
The strict enforcement of global resale rights, or an entertainment industry-style model of residuals, would be one way to ensure that artists are afforded a basic income.
Another way to get a basic income is to get a job.
Being an artist *is* a job if you sell your work.
… and it isn’t if you don’t. Just because someone decided the wanted to be an artist doesn’t mean the world owes them a living.
Given that we ebook readers purchase a license rather than ownership, perhaps that type of arrangement should migrate up the production chain for all types of art.