Art Collection Management 13 November 2013

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 I.    COLLECTION BUILDING

II.ESTABLISHING THE SCOPE AND VALUE OF A COLLECTION              A.  INVENTORY MANAGEMENT              B.  VALUATION

III.COLLECTION MAINTANENCE AND HOLDING COSTS              A.  INSURANCE              B.  SHIPPING, HANDLING, INSTALLATION              C.  CONSERVATION

IV.   THE PUBLIC AND PRIVATE WORTH OF COLLECTIONS               A. SHARING COLLECTIONS (DISPLAY, LOANS, PUBLISHING)              B. ART INVESTING AND FINANCING

v.   PARTING FROM COLLECTIONS               A.  DE- ACCESSIONING, GIFTING, ESTATE PLANNING

Collecting Objectives

• Personal Vision• Conceptual Theme• Vertical Collecting (Buying in Depth)• Horizontal Collecting • Crossover Collecting• “The Very Best”• Medium

Collecting Sources

• At Auction • Dealers• Artist’s Studio• Online• Via Agent Due Diligence

Collection Management Systems (CMS)

• SoftwareArtsystems/Gallery ProArtBaseThe Museum SystemFilemaker Pro (My Art Collection)

vs.• “The Cloud” iCollect/CollectorSystems (Sotheby’s Official Client

CMS)

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Art Detail

My Art CollectionArt List

Valuation

Valuation v. Appraising

What Kind of Value?

Valuation Factors

Authenticity

Quality

Rarity

Condition

Provenance

Publications and Exhibition

Insurance• Art Insurance

• Explosion of art market = Explosion of insurance business

• Premium revenues have increased by 30% in last 5 years

• U.S. is fastest-growing market; Brazil

• Increased values also mean increased liability

Why Insure? DESTRUCTION

Jackson Pollock, Drips on Black partially destroyed in Corral Canyon Fire 2007

Why Insure?DAMAGE PARTIAL LOSS

Picasso’s $138 million La Reve – post elbow

Issues for InsurerAt-Risk Addresses: Florida

Issues for Insurer:HOTSPOTS

Momart Warehouse Fire, London, 2004

How much to insure for?

Richard Prince, Man-Crazy Nurse

No.2 sold for $7,433,000

at Christies, May 2008

2003:

Nurse painting purchased for

$100,000

2006:

Same Nurse painting valued at

$250,000

New buyers from Russia, Middle East

and Asia concentrate on artists with

momentum

Title Insurance

When is title not clear?

Theft, Liens, Divorce

Provenance Gap

Reassure Buyer

Muddy Ownership

.Note: most reputable dealers guarantee clear title and auction houses offer warranty

• Suffland Holdings v. Gagosian Gallery (Mark Tansey) 2010 – Consignor forgot work had been partially gifted to Met when signed

representation of warranty to title

ShippingInternational Freight

• 9/11 Commission Act of 2007

– TSA screens 100% cargo on passenger aircraft (some shipping companies are Cargo Screening Facilities)

ShippingMitigate Risk

• Reputable Art Handlers → ICEFAT (International Convention of Exhibition Fine Art

Transporters) www.icefat.org

• Before anything is shipped: → Condition Report with Images

• Correctly Packed: Crate, Travel Frame, Conservation- → Grade Soft Packing Materials

• Most Direct Route Possible

Shipping

Road Freight− Air-Ride Suspension; Humidity, Temperature Control− Security Tracking− Alarm− Consolidated Shipment? → LOFO (Last On, First Off)− Is Someone with Artwork At All Times?− Can Art Be Unloaded in Building?

By Courier Delivery− Must be supervised− Signature constitutes owner’s approval of arrival condition− Conservator should be on hand for valuable and vulnerable

pieces

Shipping Customs

Generally: Fine Art is Duty Free

→ But what is “Fine Art”?

• “executed entirely by hand” -- YES• Antiques over 100 years old – YES• Disassembled “light art” – NO! (EU)

→ Haunch of Venison Case (2010)

= VAT 20% instead of 5% + Customs» Viola and Flavin works are “wall lighting” and “fixtures”

INSTALLATION

INSTALLATION• Does it fit??

• Avoid Direct Sunlight – Ultraviolet radiation (cumulative damage cannot be reversed)

− solar shades− UV filters/Glazing− Rotate works

• Location (Radiators, Fireplaces, Under Sprinkler Systems, Near Heaters)

• Humidity fluctuations (optimal: stabilized between 40-60%)− Beware of spotlights (heat)

• Sculpture and Objects: consider plinths, display cases, bases and mounts

Conservation

Only 5% of the world‘s artworks will survive the next 100 years!

ConservationDAMAGE

ConservationINHERENT VICE

ConservationCLIMATE CONTROL

Hygrothermograph

SHARING COLLECTIONS

Don and Mera Rubell

SHARING COLLECTIONS

• Exhibition Loans• Duration?/How many venues?• Security?/Climate control?• Publication?

• Insurance?

• Costs?• Courier?• Replacement work?• Immunity from Seizure?• UCC-1

SHARING COLLECTIONSFoundations

Rubell Family Collection/Contemporary Art Foundation

PARTING WITH COLLECTIONS

DE-ACCESSIONNo more room/doesn’t fit

27 Rue de Fleurus, Paris

PARTING WITH COLLECTIONS

• Tired of the Artwork/Change of Taste

• Raise money to buy more art

• No more room/doesn’t fit

• Approaching end of life/priorities shifting

PARTING WITH COLLECTIONSDE-ACCESSIONING: SELLING

• Auction - open, public (not discreet), transparent, but all at once can be a risk

• Private Sales − Dealer – or not

− Conflict? Selling

• For multiple pieces: De-accession Plan− Analyze Each Market Sector

− Don’t Flood the Market

PARTING WITH COLLECTIONS ESTATE PLANNING

GOALS1.Respect collector’s wishes vis-à-

vis collection2.Reduce tax burden on estate

PARTING WITH COLLECTIONS

ESTATE PLANNING: GIFT/BEQUEST

Dorothy and Herbert Vogel National Gallery of Art

Washington, DC

DONATE WORKS TO

CHARITIBLE INSTITUTIONS

(Collectors Deduct FMV)

PARTING WITH COLLECTIONS“BARGAIN SALE”

Sammlung Berggruen Heinz BerggruenSold works to Berlin’s State Museums for $129 million,1/10 market value

PARTING WITH COLLECTIONS“BARGAIN SALE”

= Sell Works to Museum for Reduced Price

•Cash strapped museums acquire desirable works

•Collector gets deduction + funds to enjoy or use to defray estate costs

Art Collection Management QUESTIONS?

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