Market Monday: Atrocity Exhibition

Just ahead of Halloween, a collection of horror stories about the current state of the gallery sector...

Eviction Notice: Nate Freeman reported on Friday that Room East, the Lower East Side gallery founded in 2012 by Steve Pulimood, will abandon its entire roster of artists and move exclusively to mounting historical exhibitions. In fact, the transition appears to be complete (or nearly so) already. Although Pulimood reportedly hung up when Freeman asked him over the phone "whether or not he was still representing artists," several members of the gallery's former stable independently confirmed that they were no longer working with Room East, while a few added they were told it was either "closing its program" or "shifting the model" toward historical talent. The gallery's new era begins next week with a show by filmmaker and photographer Hollis Frampton, who died in 1984.

Since I can only speculate about the reasons for Room East's pivot, what the available facts highlight to me is the porousness between the primary and secondary markets in 2016. While I expect there was plenty of behind-the-scenes agony over permanently switching focus to resales, Pulimood has apparently managed to do so without publicly rebranding the gallery, trading exhibition spaces, hiring staff with different specialties, or sourcing a wide range of new collectors. If any or all of the above had been necessary, it's doubtful that he could have inverted his program this quickly. So I think we're safe to conclude that, even when Pulimood was ostensibly dedicating himself to developing his living artists' careers, he was already pumping serious time and resources into the secondary market, too––just like so many of his peers this generation. And that means Room East leaves another bloody footprint leading toward the reality that "gallerists versus dealers" increasingly represents a distinction without a difference. [ARTnews]

Fight or Flight: As a reminder that the American primary market isn't the only one being terrorized by 21st-century economics, Laurie Rojas reported on the growing pains now afflicting gallerists in one of Europe's edgiest and most respected contemporary-art hubs: Berlin. Thanks to a few recent revisions to the German tax code, it's arguable that Berlin-based art sellers actually face even more daunting challenges than their stateside counterparts. Aside from being required to pay a 5.2 percent "statutory pension to freelancers and artists," the Gray City's gallerists are also forced to compete directly with their own talent due to a bizarre double standard on value-added tax. Since 2013, any artwork acquired from a Berlin gallery has been subject to a 19-percent VAT. If the same piece were acquired directly from a Berlin artist's studio, however, the buyer would pay only 7-percent VAT––and that 12-percent delta obviously becomes more and more consequential as the asking price escalates. 

This discrepancy helps explain why some Berlin gallerists are now clamoring for lawmakers to implement financial incentives similar to the ones found in EU cities such as Vienna, which sets VAT on all art sales at a more-reasonable 10 percent. But if the German legislature resists these cries for help, it's fair to wonder whether we might eventually start to see a wave of tax-based gallery migrations from Berlin to fiscally friendlier European markets, similar to what the American film and TV industry has experienced since states like Ohio began introducing massive tax credits, rebates, and grants to out-of-town productions. Even if not, the almost legally mandated struggles of Berlin's galleries serve as an international example of the same basic phenomenon we've been witnessing in American art destinations like New York and Los Angeles: In a capitalist system without strong state support for cultural enterprises, only the most well-funded and most flexible arts entrepreneurs may survive. [Artsy]

The Ai's Have It: Finally this week, news broke on Friday that blue-chip dissident––not a description you hear often, is it?––Ai Weiwei will debut four concurrent solo shows in three different high-end New York galleries this November: two at Mary Boone, one at Lisson, and one at Deitch Projects. Dan Duray writes that the Boone and Lisson exhibitions will all be "organized under the title 'Roots and Branches'" and "feature tree-inspired sculptures," while the Deitch show, titled "Laundromat," will "present cleaned, cast-off clothing left by refugees after Greek police evacuated the makeshift Idomeni camp along the Macedonian border in May." The four-limbed extravaganza will also represent Ai's first opportunity to travel to his own American openings since regaining passport privileges from Chinese authorities last July.

Before I go on, let me emphasize that I have tremendous admiration for Ai as an artist, activist, businessman, and personality. (Regarding that last characterization, remember that this is a dude who supported himself in New York in the '80s almost exclusively by playing blackjack, creating the basis for one of my all-time favorite "worlds collide" headlines.) That said, his upcoming commercial quartet exemplifies one of the reasons I believe the gallery sector is hurtling toward a winner-takes-all future. By entering into this (presumably) temporary merger, Boone, Lisson, and Deitch aren't just boxing out other artists who could assume the November slot in their respective programs. They are also reinforcing a growing precedent that the most in-demand talent can and should produce enough work to function in some of the same ways as luxury brands.

How, you ask? While their pieces remain scarce on an ABSOLUTE scale––meaning they will never be mass-market goods––the Ais, Koonses, and Princes of the industry are encouraged through alliances like these to proliferate on a RELATIVE scale––meaning that every high and ultra-high net-worth collector may believe, with some justification, that they can land one (or more) of these sought-after status symbols. This expectation tamps down buyers' incentives to explore and engage with less well-known names in the marketplace, accelerating a retreat to consensus that threatens to turn all but the most obvious galleries and artists into contestants on the industry's most depressing game show: Flailing for Dollars. And that's a spectacle that I think most of us would hate to see on a regular basis. [The Art Newspaper]

That's all for this edition. Til next time, if any of the above spooked you, just remember: The horrors we actually see are almost always less frightening than the unknown.