2. Art market manipulation
Stock market hucksterism has nothing on the art market — a place where no one should trust anything.
Why it matters: In a world characterized by extreme opacity, auction prices are the closest the art world has to terra firma — a public arm's-length transaction demonstrating just how much someone is willing to spend on a given artwork. Sometimes, however, they shouldn't be believed.
What we're reading: Artnet's Nate Freeman solves an art-world mystery in the latest issue of the Artnet Intelligence Report: How did a painting that was bought for $22,500 in the summer of 2018 end up selling at auction for $880,971 the following February?
- The mystery was heightened by the fact that the artist, Amoako Boafo, was an art-world newcomer who had never appeared at auction.
The hype around the price — more than 13 times the high estimate — immediately catapulted Boafo into the ranks of the buzziest artists in the world.
- Soon many more of his canvases would appear at auction, and even if none of them sold for more than $880,000, they all fetched well over $200,000 — cheap, if only in comparison.
Spoiler alert: It turns out that the initial auction — the one that caused all the buzz — was rigged.
- Two low-profile London-based collectors bought the piece, not because they thought it was worth $880,000, but because they had been promised $480,000 of art for it — by Boafo himself.
- In the months following the auction, the collectors sold that art for $644,500 — and they resold "The Yellow Bathing Suit," too, for about $300,000. They therefore ended up making a profit, despite losing some $580,000 on the painting that kicked off all the hype.
What they're saying: Phillips, the auction house, confirmed to Axios that it stands behind the $880,971 price as a legitimate auction record for Boafo.
Background: The New York Times this week raised its august eyebrows at some of the prices being paid at auction for young artists like Boafo, who's Ghanaian.
- Kenyan painter Michael Armitage, also 36, similarly burst onto the auction scene last year when his 2015 painting “The Conservationists” sold for $1.52 million, more than 20 times its high estimate.
The bottom line: Some painters will always find themselves caught up in a trendy moment ("zombie formalists" a few years ago; African figuration today).
- When art-world flippers start seeing quick profits, it's worth taking nothing at face value. Not even auction results.