Hollywood’s First Art Collector, dealers manipulate buyers other secrets

What do the moguls of modern-day Hollywood do with their megabucks? Some of them megacollect art. Wealth-X, a consulting firm that specializes in what it calls “wealth intelligence,” published a list of Hollywood’s 10 top art collectors in April, and David Geffen, co-founder of DreamWorks, topped the roster. The estimated value of his smallish but choice modern-art collection (he is known to own paintings by the likes of Arshile Gorky, Willem de Kooning, Jasper Johns and Mark Rothko) is $2.3 billion, a third of his net worth. He reportedly sold Jackson Pollock’s “No. 5, 1948” for $140 million—more than 40% of the Metropolitan Opera’s entire annual budget—in 2006.

Edward G. Robinson in 1957. ENLARGE
Edward G. Robinson in 1957. Photo: Yale Joel/The LIFE Picture Collection/Getty Images

Hollywood’s top-dollar collectors prefer to keep their leisure-time activities hush-hush, so it’s hard to know how many of them are as serious about art as Mr. Geffen, or how much they really know about it. It seems a safe bet, though, that most of them go in for whatever is trendiest and/or costliest, and I doubt that many of them are remotely as passionate about art as was Edward G. Robinson, Hollywood’s first major collector, who put together what he proudly and accurately described in “All My Yesterdays,” his 1973 autobiography, as “one of the greatest collections of French Impressionist art ever assembled by an American.”

Robinson started out playing gun-toting gangsters in Depression-era hit movies like “Little Caesar,” then shifted to more challenging character roles in such later films as “The Cincinnati Kid,” “Double Indemnity,” “Scarlet Street” and “Soylent Green.” (He’s still one of the best-remembered studio-era stars: TCM will be showing “The Cincinnati Kid” and “Little Caesar” next month.) In private life, though, he was nothing like the tough guys that were his original screen specialty. A classically trained stage actor and classical-music buff—his friends included George Gershwin and Igor Stravinsky—he started purchasing Impressionist and Post-Impressionist canvases in earnest on a 1936 trip to Europe, five years after “Little Caesar” made him a superstar. Eight years later, he built his own private gallery to house the hundred-odd paintings in his collection. New York’s Museum of Modern Art and Washington’s National Gallery exhibited 40 of them in 1953, and the lineup included Bonnard, Cézanne, Degas, Gauguin, Matisse, Picasso, Renoir and Van Gogh.

What began as a hobby turned into a compulsion, so much so that he and his first wife and son sat in 1939 for Édouard Vuillard, who did a pastel portrait of them. “It is short of a masterwork,” Robinson cheerfully admitted. “Paintings on commission usually are. But it beats hell out of a Kodak snapshot.” He even painted in his spare time, turning out, among other things, a very credible copy of Cézanne’s “The Black Clock,” the jewel of his collection.

In time Robinson’s collecting became so widely known that his cameo appearance in a 1967 episode of “Batman” consisted of a scene in which he chatted with the Dynamic Duo about art. (Robin: “Pop art?” Robinson: “I think canned tomato soup is to eat—not to frame and hang on a wall.”) His offscreen sentiments were just as direct and unpretentious. He bought what he liked and encouraged others to do the same, steering clear of “art consultants” and never indulging in high-flown art-world talk: “I never take advice about what picture to buy…a dealer was raving over and detailing the merits of a Pissarro, and I remember saying: ‘I don’t need all that talk. Let the picture talk for itself.’”

Modern art came cheaper when Robinson started buying it, of course: Life reported in 1948 that “experts” valued one of his Renoirs at just $35,000 (about $350,000 today). But so, too, did actors, even name-above-the-title stars like Robinson, who pulled down a paltry $12,500 a week for co-starring with Humphrey Bogart that same year in “Key Largo.” So he went into debt to pursue his passion, and was devastated when he was forced to sell the collection off in 1956 as part of a divorce settlement. Over time, though, he managed to buy back 18 of the paintings and add three dozen more, most notably a spectacular Monet water-lily panel from 1917, though he insisted on describing them as “not a collection…but the remains of one.” Robinson’s entire second collection, however, was purchased intact after his death for $5 million. Some remnant!

Not that the figure would have interested him, for Robinson bought paintings not as investments but out of pure love. “I have not collected art, art collected me,” he said on many occasions, and he spoke even more eloquently about the paintings that he treasured in a 1971 speech reprinted in “Edward G. Robinson’s World of Art,” the published catalog of his second collection: “I touch them sometimes, with the flat of my hand very gently, amazed again and ever again that little tubes of long-dried pigment could be arranged in such lovely order, that an instant of times gone by, people long dead, music faded away, eyes long ago dimmed and empty, could suddenly be alive once more and very real.” You don’t talk that way about stock certificates—or silk-screened soup cans.

—————–

How Powerful Dealers Manipulate Collectors to Buy Artwork and Other Market Secretsdanh-vo-fiat-veritas

Say you want a painting by a hot artist like Mark Bradford, who’s the subject of a recent New Yorker profile, or Danh Vo, whose works have become so coveted that collector Bert Kreuk sued to get one, or Amalia Ulman, whose works are so desired that collector and dealer Stefan Simchowitz cut one into pieces so he would have more salable units. What are you going to have to do to get it?

As anyone familiar with today’s superheated market knows, competition to secure coveted artworks can be very stiff. The work of popular artists can spur waiting lists that are sometimes years long, with dozens of respected suitors vying for the prize. This can result in high-stakes negotiations, whether discreet or conspicuous, between buyers and sellers, each aiming to bring to bear whatever leverage they might have.

“When galleries represent artists who are really hot,” one New York collector told artnet News, “they can make demands and get concessions.”

Like what? For one, you may have to buy two artworks to get one, according to the art world professionals we talked to, who, like the New York collector, spoke with arnet News on condition of anonymity.

Delicate Conversations, Ethical Questions
While it’s no secret in the business that you can get to the front of the “wait list” for an artist’s work if you promise the work you’re buying to a museum, you may sometimes be required to buy an additional work if you want one for yourself.

“If the collector happens to be a trustee, it’s a very transparent conversation,” says a New York art advisor who has served on museum boards and committees. “It’s done all the time for big-ticket items.”

And it’s not just the biggest and most powerful galleries that do it, either. “Smaller galleries, like the ones on [New York’s] Lower East Side, do it too,” says the advisor.

Some observers get queasy about deals like this. Securing a place in a museum collection can increase an artist’s market value, and collectors and museum personnel worry about giving the appearance that they’re working together to increase an artist’s prices, especially when a wealthy collector gets a tax break as part of the deal.

Moreover, museums would doubtless prefer that we think that the only factor driving the development of their collections is the judicious decision-making of sober, thoughtful curators and boards, rather than deals made amid a frenzied market that may benefit the artist and the collector as much as the institution.

A curator at a New York state museum even advised artnet News not to report on these practices because, believing they probably weren’t legal, she thought such a report might put a chill on the practice to the detriment of museums.

According to an attorney and art historian we spoke with, however, there’s no such problem.

“Are there ethical questions?” the attorney asked. “I’m not really sure what they would be. It’s not against the law to prefer one buyer over another. It’s a free market.”

And these aren’t informal arrangements. One common criticism of the art world is that it operates on handshake agreements rather than written contracts. But as the lawyer and art historian told artnet News, these transactions are thoroughly vetted: “They get worked out via contracts, not just handshakes. It’s not uncommon for museums to have their legal counsel participate in the negotiations, because they want to be sure the deal is to their benefit.”

The Museum of Modern Art and the Guggenheim Museum both declined to comment for this story.

“We would not be able to discuss any legal conversations regarding acquisitions,” a press representative from New York’s Museum of Modern Art told artnet News. She did confirm, however, that the museum’s counsel “would generally be involved in the arrangements of an acquisition, whether gift or purchase.”

It Can Go Both Ways
Dealers aren’t the only ones with power in these hard-nosed negotiations. Again, it’s no secret that buyers with the right connections can skip to the head of the mythical queue.

“Waiting lists don’t exactly have numbers next to the names,” said a New York dealer. “They’re porous.”

What’s more, collectors can exploit their institutional affiliations to secure favorable prices.

“Collectors who serve on museum boards can say to dealers, ‘I want this artist, and I want a good piece, and if you give it to me for a good price, I’ll buy another at that price and donate to the institution I’m part of,'” said a New York collector. “So it goes both ways.”

“It’s not a stupid way to collect,” added the collector, dryly. The buyer gets a good price on a work whose future value is buttressed by the spot at the museum.

And the buy-two-to-get-one deals may be among the more savory practices that dealers engage in when they’ve got inventory by a hot artist.

Dealers also use their leverage to move other merchandise they perhaps can’t otherwise sell, bundling less desirable works in with trophies in what one advisor considers a velvet-gloved act of coercion.

Dealers, for their part, describe it as rewarding loyalty.

“Most galleries prefer to sell to collectors who support their programs,” said a New York gallerist.

And under the best circumstances, collectors aren’t strong-armed into these conversations, says the gallerist. “Ideally, the collector trusts the dealer’s vision and believes in what she’s doing. The gallery isn’t just a shop. We’re trying to contribute something to the art world, and hopefully to art history.”

What are these conversations like?

The collector puts it this way: “There have been times when I’ve wanted an artwork and been told, ‘You know, there’s a lot of interest in that work.’ Well, is it sold or not, I ask? And they’ve openly explained that others ahead of me on the waiting list have been very supportive of the gallery.”

Let’s say you want a work by Bradford, or Ulman, or Vo. The gallerist might have the work set up for viewing in a back room, says the New York advisor, “and the dealer will have four other works, by other artists, available and ready in the room. So you start a dialogue. It’s all about persuasion. The dealer makes it subtly known that you’re not just leaving with one work, and perhaps takes a percentage off. It may be subliminal.”

Though it’s a gamble taking home works by artists who are not equally sanctioned by the market, it’s not necessarily a losing deal for the collector, a corporate art advisor points out.

“If there’s a box of trinkets at a flea market, you might have to buy the whole box to find the diamond in the rough,” she said. “As a collector, you’re taking a flier that maybe the spoon in the box is actually silver.”

Advertisements