Wednesday, June 27, 2007

The Logic Behind the 50/50 Split

I've been threatening to do this since the blog began, so here goes...

Perhaps the most controversial aspect of the Gallery/Artist relationship is, not surprisingly, the most controversial aspect of any relationship in any business: money. Specifically, the 50/50 split of sales between the artist and dealer. Many folks outside the gallery system will look at that split and be amazed, I'm sure. The artist is the creative genius, the artist spent years in art school, the artist is the one putting it all on the line for the public to take pot shots at their vision. In other professions, like acting, managers only get 15% and agents only get 10%. Why on earth does the gallery take 50% of the money? The short answer is because it costs that much to promote the artist's work. The longer answer is, well...a bit like the adage about watching sausages being made. The following is a very unromantic discussion, leaving out issues such as how much the gallery believes in the work or how important the artist is to the world. Those things do matter, but I'm taking a wholly bottom-line view here to provide the most objective analysis and hopefully most useful information toward understanding this.

It must be noted that the 50/50 split is not universal. A few notable galleries offer artists a better split, and if an artist can get into them, they probably should. Also, many artists can and do renegotiate a better deal when their work is selling consistently at higher prices. Some very prominent galleries only get 25% -30% from certain artists. Of course those artists' works are in very high demand, but I'll come back to that later.

In general, I find the artists most upset about the 50/50 split fall into one of two categories: 1) they don't understand the business that well (and many of them have never had full-time representation) or 2) they have a bad relationship with their gallery (i.e., their gallery is not doing enough in their opinion to earn the 50% they're taking). This second category of artists can also be broken down in two groups: those who are correct in their assessment that the gallery is not doing enough for their 50% and those who may not understand that the gallery is still behind in the deal in terms of recouping their investment and is actually doing more than their fair share for the 50%.

All in all, I feel the artists who get it the best are also the artists who take the time to understand the business realities of the relationship. Many artists will complain about the split wholly unaware that at the point they're doing so, the gallery has spent more money promoting the artist than they've taken in through sales. In other words, the gallery has yet to recoup its investment. So in the interest of helping artists either renegotiate a better deal for themselves or feel better about the deal they have, I'm going to spell it out in detail:

Because emerging artists are most likely (and understandably) the least likely to understand the business, I took a small survey of young(ish) galleries with bare bone staffs and predominantly emerging artists in their stable in New York. They reported that it costs between $6,000 to $12,000 per exhibition for the overhead/rent alone (these are all galleries with relatively modest spaces). This is before the gallerist takes a salary, let alone sees any profit for the business. That means, that with the 50/50 split, those galleries must sell between $12,000 and $24,000 of artwork per exhibition before they even break even. Before they can pay themselves anything. Before they can expand the business and reinvest in more resources to promote their artists. For many (if not most) emerging artists out there, I suspect, that means the gallery took a loss on your first exhibition. Sometimes a hefty one. If nothing in the exhibition sells (and it happens more frequently than any young dealer will admit), that's a very significant loss of money.

Why does it cost that much money per exhibition, you might wonder. Here's a partial list of the bills/expenses we must find the money for during any given exhibition (more or less in descending order of how expensive they are):

  • Rent
  • Staff expenses / salaries
  • Electricity / heating / AC
  • Invitations
  • Postage, Postage, Postage
  • Insurance
  • Adverti$$$$$ing
  • Opening Reception Refreshments/Expenses
  • Phone 1, Phone 2
  • DSL
  • Accounting Fees
  • Banking Fees
  • Subscriptions/Professional Fees
  • Storage rent
  • Art Fair applications/expenses
  • Shipping/Crating expenses
  • Entertaining collectors expenses
  • Office Supplie$$$$
  • Travel Expenses
  • Gas/Water
  • Garbage Collection
  • Alarm system

Now I realize that there are many similar expenses for running a studio, but a commercial gallery is a business and should only be in business if it can pay these bills AND see its way (some day at least) toward profit on top of that. With emerging artists prices, however, it requires a good deal of hustle and determination to make it some times.

Essentially, a gallery is investing in an artist, betting they can develop a market for the work and (one day hopefully) see a return. Like any investment, however, this includes a significant amount of risk. There are far more artists who didn't become overnight sensations out there than otherwise. Regardless of how well-connected or determined a gallerist is, there are some artists with more challenging work for whom it takes years to sell anything. If it takes five years to develop a market, for example (which is not that uncommon), that will represent at least two solo exhibitions on average, meaning the galleries I surveyed might at this point have invested as much as $50,000 in this artist (including taking the work to art fairs and promoting it in between exhibitions) before they see the first significant sales. Unless those sales total $100,000, the gallery will still be waiting, five years later, to break even on their investment. Multiply this by the number of artists in a gallery, and you begin to sense how risky a business it can be.

Further, it happens all the time that after 5 years, after an investment of $50,000 or more, an artist will leave a gallery, or stop making art, or a whole range of things that make that investment disappear. It's risk like this that, to my mind, justifies the 50/50 split. At least initially.

I know there are dealers out there who will disagree with me on this, but I happen to believe that after an artist's market is well established and they're clearly bringing in more money than it costs to promote their work, it's a gallery's obligation to reconsider the split. Without opening myself up to questions about the details, I'll note that we have indeed done just that. As I noted above, big galleries do it as well. It makes sense to me. It seems justified and fair. When all the expenses are covered (and, granted, that's a complicated equation [and one you should feel free to ask your gallery to sit down and outline with you...just be prepared to learn/accept they're still in the hole], but still sometimes it's obvious), the artist deserves to make more IMHO. Of course, a gallery is within its rights to refuse to reconsider the split, but then so is the artist within his/her rights IMO to reconsider which gallery they work with. Other factors, like loyalty and a collaborative spirit are considerations as well, mind you. It doesn't hurt an artist's soul to be fair to the gallery that first believed in them. Still, when it's clear the artist is earning more than their fair share, a better split is only fair.

Until that point, however, the 50/50 split is more than fair, to my mind.

And now, I'll take questions. I won't reveal details about specific artists, however, and I won't suffer in silence misplaced animosity for things I personally haven't done. I know this is an emotional issue, but keep your questions civil please. Finally, I should note that these are my opinions only and don't represent all gallerists, many of whom have years more experience than I have.

Labels:

66 Comments:

Anonymous ml said...

You left out one factor - dealing with collectors. I've watched collectors make gallerists jump through hoops, haul out work, make frantic phone calls and then buy nothing. Probably never intended to buy anything. Just liked power and attention. This happens in sales in general. But being unfailingly polite is a business expense.

Enjoy your summer home. You deserve it.

6/27/2007 09:51:00 AM  
Blogger Mark Creegan said...

This is great info. Thanks! And for artists going thru the process of finding representation, its good to keep all these in mind when gallerists asses the work- that certain practical matters sometimes offset personal attraction to the work itself. But if the attraction is incredibly strong perhaps the reverse happens. I am guessing this is the case?

6/27/2007 10:38:00 AM  
Blogger Edward_ said...

certain practical matters sometimes offset personal attraction to the work itself. But if the attraction is incredibly strong perhaps the reverse happens. I am guessing this is the case?

This is probably its own post, but there seems to be a consensus that a gallery had better have at least 1/3 of their artists selling very well, 1/3 selling moderately well, and then, and only then, can they afford to have 1/3 for whom they don't expect sales, but exhibit because they believe in their work. So, yes, it happens in reverse, but too much of it can sink the gallery.

6/27/2007 10:55:00 AM  
Anonymous Anonymous said...

What is your take on the 50/50 when the artist is contacted by brand new collectors and then passes these new collectors to the gallery for the sale, and the sale goes through.

Should it still be 50/50 since the artist is handing the gallery many new collectors, and these new collectors were not affiliated with that gallery previously?

6/27/2007 11:16:00 AM  
Anonymous Anonymous said...

Or would 40/60 be more in order?

Thank you.

6/27/2007 11:17:00 AM  
Blogger julie said...

I agree that a gallery is a business and has to run and hopefully make a profit. Apparently it is quite a risky business, and yes, that sucks. It is also a risky business to be an artist, investing time, effort and all their cash in equipment and materials until magically the art appears. In this system, the artist gets paid back for his/her efforts way after the initial investment, and yes, that also sucks. But the gallery and artist are business pals in this situation. The gallery is taking care of a portion of the "work" that must be done to promote the art...something most artists don't have the time or inclination for! It is hard work to maintain customer lists, send emails, generate post cards, participate in social events, keep gallery hours, etc.... If artists had to do all this PLUS create interesting things...there would be a whole lot less creating going on and a whole lot more pulling of hairs!
I suppose if you are a high profile artist, selling pieces for a lot of money, both the gallery and artist are happy campers right away, all making profits at whatever split they desire. However, if you are NOT a high profile artist, and lets face it most of us are not, it is Most Difficult to compete in this type of market on your own merit. A beginner would have no dedicated following, no precedent on price, no guarantee for the buyer or gallery that their precious investments would pay off...Therefore I don't see this system has a whole lot of room for growth. It can only work correctly (= quickly enough) if the artist is already in that high rank status... Doesn't this process then... eliminate most (new emerging) artists entirely? Isn't this rather limiting the pool of art and artists to those that sell work with 4 figure price tags or more?
Who is going to come into a gallery, view the unknown artists' work and then purchase a piece for $5000, not knowing whether or not their investment will eventually be worth the same $5000 they just spent...?
They may be willing to spend $500...but then the gallery goes belly up because it's rent is over $6000 for this exhibition! Sounds discouraging.
Is this why we now have "collectives"? Group shows? Because one man shows making profit are....so RAre??
(hey, go easy on me, this is my first post here...!!)

6/27/2007 11:21:00 AM  
Blogger Edward_ said...

Should it still be 50/50 since the artist is handing the gallery many new collectors, and these new collectors were not affiliated with that gallery previously?

I think it's fair to consider the gallery's whole investment up until the point at which it's clear the artist is bringing in more money than it costs to promote their work. Taking individual instances where a collector follows an artist to a new gallery and calculating a percentage on that (as if that existed in a vaccuum) doesn't make much sense to me and probably will lead to your bookkeeper taking a contract out on you.

I understand where you're coming from (in fact, I had a detailed conversation with an artist facing this very situation recently), but the idea that by introducing a collector a new gallery, that gallery has profitted from your contacts to a degree the split should be different, ignores the reverse situation. All the other artists in the gallery already have collectors who will be exposed to your work now as well. Should you sacrifice some of your split to them/the gallery if one of their collectors buys your work?

There's a theory that seems to be playing itself out in the art market that it's better to work together to increase the size of the pie than to aggressively work to protect your current slice of it. You'll win more in the long run by sharing, I believe.

If you try to separate out which collectors were yours before you joined the gallery, you'll create confusion and hard feelings. Perhaps that extra 10% is worth asking to you. Be sure it is, is my only advice.

6/27/2007 11:26:00 AM  
Blogger Bill Gusky said...

Anyone who's tried to run their own business knows that inventory is at best half the story.

Any artist who's slogged through trying to sell quantities of their work all on their own knows that it's one hell of a slog unless you arrive already connected.

Ask any of the B and A-list players who also teach why they teach. I'm willing to bet many of them aren't just teaching for social reasons.

50% off the top strikes me as a plum deal.

6/27/2007 11:30:00 AM  
Anonymous Anonymous said...

I agree with you Edward, I like your professional opinion on these issues, which is why I asked.

My business manager (my wife, just an inside joke) suggested that.

I did not think that was professional to do considering the larger picture, as you confirmed laready.

Thank you for your input.

6/27/2007 11:31:00 AM  
Anonymous David said...

EW, what, in your opinion, should an artist expect the gallery to be doing for their 50%? I'm not asking about the list of fixed gallery expenses, but their actual activities, beyond the obvious ones of having the work on the walls and sending out cards.

On the flip side, what do you feel it's reasonable for a gallery to expect the artist to do for their share, besides the obvious one of creating the work?

6/27/2007 11:32:00 AM  
Anonymous bambino said...

Great post and explanation EW, thank you.

As you know I can talk and talk about this issue......

But you did it very professionally and polite and based on real facts

6/27/2007 11:40:00 AM  
Anonymous Daniel Sroka said...

Good overview. As an artist, I find it a little sad when other artists refuse to understand the business aspect of their chosen profession. Then again, I've seen gallerists who only see artists as product instead of business partners. So these types of conversations are excellent for all to have.

There is one thing I would clarify. You provided a list of all the expenses related to putting on a show, expenses that a gallerist needs to recoup to justify his investment in an artist. However, some of those expenses (e.g. rent, phone, fees) are standard costs of doing business that gallery must incur whether they have one artist or 20, and would therefore be measured against all sources of revenue. I'd be curious how that breaks down -- what percentage of gallery expenses are related specifically to a show vs just keeping the doors open?

6/27/2007 11:45:00 AM  
Blogger Edward_ said...

EW, what, in your opinion, should an artist expect the gallery to be doing for their 50%?...beyond the obvious ones of having the work on the walls and sending out cards

* Creating a context that adds prestige to your being associated with it.
* Building contacts with museums and curators that will benefit you.
* Exhibiting your work at art fairs.
* Promoting your work inbetween exhibitions via their contacts/website/advertising/press releases for outside exhibitions.
* Working as the primary contact/service agency for folks who have questions about your work or need images/documents/etc.
* Serving as a construstive criticism sounding board, advocate, cheerleader, and reality check.
* Career management, with regards to investigating and helping you understand the ramifications of other potential experiences/exhibitions.
* Industry and market insight and pricing expertise.
* Maintaining an archive of your work, press, sales, collectors, etc.

These things are a given. Other things vary depending on the gallery budget and/or your sales. Some galleries can/should also provide the funds for

* Framing/production help with work.
* Slides and digital images.
* Catalogs.
* Travel expenses for you to events like fairs, etc.

There are still a few artists I know who get a monthly stipend, as well, but we're getting well past the emerging artist realm with things like that.

On the flip side, what do you feel it's reasonable for a gallery to expect the artist to do for their share, besides the obvious one of creating the work?

Making the best work they can is truly enough, in my opinion. It helps one's career if one develops relationships with curators and other artists, but a gallery should be working toward doing that for you as well. Some curators don't like to go through a gallery though, so by not seeking out those relationships, an artist may be losing certain opportunities. Finally, don't be afraid to tell folks where they can learn more about your work (i.e., at your gallery).

6/27/2007 11:52:00 AM  
Blogger Heart As Arena said...

Ed. It makes me a little flippin' nuts that you've had to defend the 50/50 split at all. However, I'm glad you did it, because often friends who aren't familiar with the art world will ask me how what the artist/gallery split works and they're surprised when I tell them that it's 50/50. Now I have a url to send them. The bigger issue here as far as I'm concerned is never the split, as much as it is either side holding up their end of the bargain. That said, I've heard a lot more stories about gallerists who, say, are willing to indulge their shoe fetishes BEFORE paying their artists than I have about artists not delivering. Granted, I think that a minority of the gallerists behave that way, and I'm, like, crazy grateful to the majority of you who take the risk by opening your doors because, well, I get to see stuff. And that's really what it's all about. Me seeing stuff. Hug a gallerist today (Unless they're evil shoe fetishists.)! Then hug an artist. 50/50, baby!

6/27/2007 12:00:00 PM  
Blogger Edward_ said...

However, some of those expenses (e.g. rent, phone, fees) are standard costs of doing business that gallery must incur whether they have one artist or 20, and would therefore be measured against all sources of revenue. I'd be curious how that breaks down -- what percentage of gallery expenses are related specifically to a show vs just keeping the doors open?

Hmmm...let me take this slowly, because I think it's a fair question, but it raises some complicated calculations to my mind.

In a nutshell, I'm not sure. The more I consider it, the more complicated it gets I think than you've (correctly, IMO) pointed out.

Yes, other artists work is selling during an exhibition, so the total cost per exhibition seems as if it would actually be lower, but when I totalled the costs after 5 years I didn't add in costs to promote the work beyond the exhibitions themselves either. In other words, I didn't pro-rate for certain ongoing expenses such as the cost of rent etc when there are no exhibitions up because the gallery is closed for holidays or August (if the gallery closes then).

The average ($6000-$12000) per exhibition covers the exhibitions time only.

All in all, though, I think your comment is correct (and makes me feel better to tell you the truth). Sales from the other artists do cover the expenses for exhibitions up at any given time. This leads, however, to the assessment for when an artist should sit down to renegoiate their split. If they know they're covering more than their fair share (i.e., well beyond their exhibitions, advertising, promotions, and time the gallery is closed), they should be able to discuss this with their dealer and see what's possible.

6/27/2007 12:08:00 PM  
Anonymous Daniel Sroka said...

All in all, though, I think your comment is correct (and makes me feel better to tell you the truth).

Cool, thanks for clarifying that. I know that these types of calculation are always rough, but its helpful to see the thinking/planning that goes into them.

So with an estimated $6-12K per show needed to break even, I assume that galleries look long and hard at any new artist, evaluating first if their work is an attractive product for the gallery's existing customer base (similar market mean fewer costs/risk), and then trying to estimate how long it might take for sales from their art to break even. Man, what a tough business to be in! How does any gallery stay in business?

6/27/2007 01:05:00 PM  
Anonymous David said...

EW, thanks.

I just had a mostly sold out show, which I was happy about. A lot of people came to see the exhibition (largely from my mailing list). Most of the sales were to gallery clients (only one to a friend of mine). The gallery made pretty good money for the month, and I more-or-less covered the cost of making the work (studio rent really adds up). So what are your thoughts about a gallery selling work, but not doing the following things from your list?

_ Building contacts with museums and curators that will benefit you.
_ Exhibiting your work at art fairs
_ Promoting your work inbetween exhibitions via advertising/press releases for outside exhibitions (I'm always on the website).
_ Career management, with regards to investigating and helping you understand the ramifications of other potential experiences/exhibitions

6/27/2007 01:10:00 PM  
Anonymous alex said...

Edward, I think you have done a great job tackling a delicate topic with this post and your followup answers. I work with an online gallery, and the issue of commission seems even more sensitive here. We hear from artists who believe that our commission should be no more than 10 to 20 percent. The argument is that we must have extremely low overhead and are therefore getting more than our fair share. In reality, we have many of the same expenses as a physical gallery because we operate like one, with online and print advertising, attending art fairs, and working to establish relationships with curators and collectors. It is true that some Internet galleries only take a small percentage, but it also seems that "you get what you pay for". In other words, although some of these websites receive a smaller commission, they aren't nearly as professional in appearance or in their activities for promoting their artists. So, in the end, an artist may receive 80 or 90 percent of the sale, but if the gallery does nothing to promote them, that is 80 or 90 percent of zero sales. I don't think this type of thing is as much of a problem with physical galleries because they would go out of business very quickly; a website could operate for a long time not selling any art, but by displaying ads and charging artists to signup. The Internet has introduced a new type of gallery that looks in the face of the traditional 50/50 split, but I think artists need to be cautious of what they are getting. There is a reason why galleries receive 50 percent of sales; in most cases, that's what it costs to properly promote and sell artwork.

6/27/2007 01:18:00 PM  
Blogger Joanne Mattera said...

Ed, your excellent post has gotten great responses.

This is probably an issue for another post, but how do you deal with the “courtesy” discounts? It’s a situation that has gotten out of hand. Most artists are accustomed to the 50/50 split—from a price that is developed to accommodate both artist and dealer—but I’m finding that collectors who once expected and received a 10% “courtesy” are now asking for 20% and more.

Interesting and true story: A very wealthy collector visited a gallery I show at. He made some selections and then said to the dealer, “Sharpen your pencil. This is fun!” He expected 30% off. The dealer responded by saying, “I know this is fun for you, but you need to understand that this is not mad money for the artists. This is their job. This is how they earn a living. And it’s how I earn my living too. I can’t give you that kind of discount.” I applaud the dealer, and I believe sales were made at a more reasonable discount.

And here’s another related topic: The idea that “reasonable discount” is not an oxymoron.

6/27/2007 01:57:00 PM  
Blogger Edward_ said...

So what are your thoughts about a gallery selling work, but not doing the following things from your list?

Are they offering you full-time representation? If so, you should request a meeting and discuss how these things are important to you. If not, what was the arrangement? I assume you discussed it beforehand, no?

If they are offering full-time representation but not meeting your expectations with regards to those things, consider whether you're unhappy enough to look for other representation.

Having said that, don't mistake a sluggish start in such matters as an indication you should look elsewhere automatically if all else is going well (like sales, press, etc.). It can take years to develop a market, build new bridges to the curators who are most interested in your type of work, and, yes, make the mistakes in marketing the work that all humans are prone to. If you're otherwise happy, start with a conversation.

6/27/2007 02:23:00 PM  
Blogger Edward_ said...

This is probably an issue for another post, but how do you deal with the “courtesy” discounts?

That could take three other posts. In general, you and your gallery should price the work such that you're not disappointed if a 10% discount is demanded. It's considered standard practice (and some collectors are highly insulted if they don't get it).

After 10%, we have a policy in our gallery that essentially ensures the artist will not be expected to absorb more than 10% unless the gallery calls them to confirm ahead of time. This tactic works well in both directions: 1) it alerts the collector to the fact that the gallery will need to get your approval, making it clear this is a big deal to you, the artist, and often times getting them to back down; and 2) it enables you to make an informed decision about whether it's worth it to you to let it go for less (i.e., in the case of an important collections, etc.).

6/27/2007 02:27:00 PM  
Anonymous Anonymous said...

How do you handle a gallery artist showing art, presumably also for sale, at another gallery show in terms of the 50/50?

Do you split the commission with the other gallery, or not at all?

6/27/2007 02:59:00 PM  
Blogger Edward_ said...

Do you split the commission with the other gallery, or not at all?

It depends on whether one gallery is the artist's "primary" gallery or not. If the artist has a "primary gallery" (and with that designation comes more responsibility for promoting the work), then that primary gallery usually collects 10% of sales at other galleries outside its city and between 20% to 30% for sales inside its same city.

Generally, because our rents are higher (as are our profiles often), New York galleries have traditionally been most well-known artists' primary galleries. That's changing a bit, but still holds true for most cases.

Some artists don't have a primary gallery, per se, and therefore sales are not split between their galleries.

Each case is different.

If you're offered primary representation, you have the right to expect more for it from the gallery in terms of what they do for you.

6/27/2007 03:05:00 PM  
Blogger Sunil said...

Ed,
That post was super and it provided me with a little lesson in the dynamics of running a small business. Just the list that you laid out made it concrete. Of course I must add that there is an inverse relationship between the input costs on the gallery and number of artists per year you manage to accommodate. Again, that depends on the caliber of the artists (and in a red hot emerging artist’s area, I could not fault you with the explanation/percentages). Thanks for the time spent on this one.

6/27/2007 03:25:00 PM  
Anonymous bambino said...

Being an employee somewhere, we always have someting to complain about or being unhappy about. Thinking we deserve better, bigger etc.
Older I get I have more respect to small business owners. It is difficult to run a business like everywhere. Since I am very close to art business I have huge respect all art gallery owners, because art market way difficult to survive and please everyone around.

6/27/2007 03:40:00 PM  
Anonymous Anonymous said...

Yes Bambino, I am an artist, and I agree 1000%
Ed's article is very informative and shows both sides.

Thank you Edward.

6/27/2007 04:04:00 PM  
Blogger Oly said...

I'm kind of surprised by that rent estimation-- seems pretty darn low.
From my knowledge, isn't average commercial space $250 per square foot in Chelsea?
Taking a 1,500 square foot gallery space into account-- such as the size of the Mike Weiss space-- that works out to around $30,000 per month for a ground floor gallery.
I can understand that number for higher floors, or upstars that are in the 1,000 square feet or smaller range, but is that really the average?
I've heard of landlords charging around $19,000 on 24th street for a 500 square foot space.
Oly

6/27/2007 04:24:00 PM  
Blogger Edward_ said...

oly,

None of the galleries I surveyed are located on 24th street. Several are not in ground floor spaces either.

Averages for ground floor once you get beyond 24th street, from what folks are willing to tell me, is lower than $75/square foot.

As in all of real estate, location will cost you.

6/27/2007 04:29:00 PM  
Blogger Oly said...

Yeah, you can definitely say that again.

NYC is the only place on earth you would say that that price is considered low.

:)

6/27/2007 04:49:00 PM  
Anonymous Anonymous said...

Ed
Thanks for the amazing post. This should be taught in all art schools.

6/27/2007 05:05:00 PM  
Blogger Donna Dodson said...

I'd be curious to find out when the system changed over to a consignment system from a wholesale/retail system, for example, it seems as though once upon a time, dealers like leo castelli came to an artist's studio and bought some pieces and offered the artist a show- so the dealer could sell the work at a profit and maybe the artist kept some of thier own work but the remainder of the unsold pieces were then kept at the gallery- this would have been in the case of a primary gallery- and the dealer acted as a collector as well as the agent. My other question is dont galleries have financial backers who help keep the lights on? Or is that not a common practice? Are galleries set up to run off revenue from other sources or do most galleries run off sales alone? Thanks!

6/27/2007 05:35:00 PM  
Anonymous kalista said...

Ed, I show in galleries in several cities, including NY. I don't feel that any of them do all those things on your list of what they should do to earn their 50%. But it's not realistic to say, "oh well, then you should leave them and find another gallery". Since I am not famous or highly sought after (although I do have a good exhibition, sales and press record), I feel lucky to have representation, even if it doesn't work as well as I would like it to. The bottom line is that there is a real power imbalance. There are so many artists who want to get into the galleries that if an artist complains too much (even in a reasonable way, by bringing up areas where she feels the gallery could improve), the gallerist might become annoyed, or start thinking the artist is too high-maintenance and drop them. They know that there are many others waiting to take their place. So I often overlook what as I see as failings or sloppiness or laziness on the part of the galleries because I want to stay on their good side and not be a complainer. In every relationship you have to guage whether you have enough clout to complain, or to try to make things more equal, and in many cases, the dealer/artist relationship is not one of equal power.

I've had cases where the gallerist drops the ball on making a museum sale, a sale to a private collector, on getting my bio and other info included in international catalogues, etc. I could do some of the work myself, but the galleries don't like that; they feel I'm encroaching on their territory. So some of the work just doesn't get done and opportunities are lost. Do you have any thought on this?

Thanks.

6/27/2007 06:06:00 PM  
Anonymous Anonymous said...

In the city where I live (Toronto) it is common for commercial galleries working on a 50/50 split to require that their artists pay half the costs of printing invitations, postage and food and wine for the opening. I even know of one gallery that charges artists an hourly rate for their staff stuffing envelopes and hanging the show and this is a prominent gallery. Does this happen in other cities?

6/27/2007 06:59:00 PM  
Anonymous Anonymous said...

Yes, this happens in Atlanta in some galleries. The market is just pathetic in regard to contemporary art so they struggle making ends meet.
I currently pay 50% of print ads. This comes directly out of sales so atleast I don't have to front it. (and advertising folks, ain't cheap!)

6/27/2007 10:53:00 PM  
Anonymous Jennie Rosenbaum said...

I have worked hard to familiarize myself with the business of running a gallery, just as I have worked to learn about the business of being an artist - I think it makes sense, of course coming from a business background helps as well.

I have seen a new model out there recently, where a commercial gallery will split exhibition costs in return for a lower commission for the first exhibition - to see if the relationship will work out and there is suitable interest. There has been some uproar around it amongst some artists but I think it makes sense as a business model - what are your views on this?

6/28/2007 01:51:00 AM  
Blogger Edward_ said...

when the system changed over to a consignment system from a wholesale/retail system

I'm not sure when it changed over, but I know that it's been predominantly that way since I got involved in the 90's. The big advantage to the current model, to my mind, is that it has permitted many more galleries to open, and opened up more opportunities for more artists to have their work exhibited.

In Williamsburg, where we started, for example, the wholesale/retail model would have prevented almost all of the galleries there from starting (none of us had the initial cash that would have taken). All of us started with spaces that had relatively very low rent and built up our businesses through press and hard work.

My other question is dont galleries have financial backers who help keep the lights on? Or is that not a common practice? Are galleries set up to run off revenue from other sources or do most galleries run off sales alone?

Again, in Williamsburg, and most of the galleries I know now in Chelsea, there are not backers. It's a big risky venture for the dealers themselves. The idea that only trust-fund babies or ambitious types who can get them to invest open galleries died out decades ago. Now all you need is the guts and elbow grease to get a space.

commercial galleries working on a 50/50 split to require that their artists pay half the costs of printing invitations, postage and food and wine for the opening. I even know of one gallery that charges artists an hourly rate for their staff stuffing envelopes and hanging the show and this is a prominent gallery. Does this happen in other cities?

Things might be evolving differently elsewhere, but in New York, we call those "vanity galleries" and they don't carry much cache here.

a commercial gallery will split exhibition costs in return for a lower commission for the first exhibition - to see if the relationship will work out and there is suitable interest. There has been some uproar around it amongst some artists but I think it makes sense as a business model - what are your views on this?

It leaves a bad taste in my mouth (being too close to the vanity gallery model for me). I appreciate the spirit of it (anything that, again, opens up more opportunties for artists to have their work seen), but I'm old fashioned in that way, I guess. Who knows, perhaps this is a sign of things to come.

6/28/2007 07:54:00 AM  
Blogger Donna Dodson said...

Thank you. One final question, if you will, do galleries approach new or emerging artists to show at their gallery or do they wait for artists to come to them? Do you agree the balance of power is in favor of the dealer in the beginning? How much do dealers look at the work of new artists, go to shows at non-profit space or do studio visits and review portfolios of emerging artists?

6/28/2007 08:37:00 AM  
Blogger Edward_ said...

Donna, those questions are a bit off topic and would take a bit more time to answer than I have at the moment.

6/28/2007 08:58:00 AM  
Anonymous Anonymous said...

Ed rules!!
Thanks for the informative article!

We love Ed woo hoo

6/28/2007 09:26:00 AM  
Blogger Donna Dodson said...

thanks ed- By the way, here is the name of a book that I read about on your blogsite awhile ago on thie broader topic of- Art dealers : the powers behind the scene tell how the art world really works / Alan Jones and Laura de Coppet.

6/28/2007 11:33:00 AM  
Blogger Tracy said...

Hi Ed, Great post. When I was in college some 20 years ago (yikes), our instructors told us that soon there would be a 50/50 split with galleries. We thought they were insane and that it would never happen. Youthful optimism! After a few years of experience and after working in a small business and then owning one, I totally get the 50/50 split. And actually I am glad to hand all of the selling, promotion and overhead over to a gallery in exchange for 50%.

But now I am wondering what you think of some galleries (I know of one in Chelsea) that are doing a 60/40 split, in favor of the gallery? Too much or another evolution?

6/28/2007 12:40:00 PM  
Anonymous Suzy said...

"Do you split the commission with the other gallery, or not at all?"
Ed, does this commission split apply to multiples such as photographs or prints? For example if one gallery has a print in its possession and it's purchased by one of it's clients doesn't that gallery have the right to expect full commission even though the artist may have primary representation elsewhere? I thought I read in a previous EW post that many gallerists would refuse to work with an artist who had a contract that stipualted such a commission split. Is the gallery identified as the artist's primary representative specificaly in the contract? Thanks Ed.

6/28/2007 04:05:00 PM  
Blogger Susan Constanse said...

I think that the 50/50 split is entirely reasonable for a gallery. Gallery folks work really hard for that commission, as hard as the artist.

In non-buying cities like Pittsburgh, it's pretty much immaterial. 50% of $0 is the same as 30% of $0.

6/28/2007 08:41:00 PM  
Blogger zipthwung said...

artists are small business too.

This is how an artist should make work for a galley that charges a 50% consignment fee:

1) Make work as cheaply as possible.

Many artists use projectors and paint with inferior paint. This is a good idea, because ideas are more important than the object.

2) Make exagerated overhead claims.
If you use student grade oils, as many do, claim you thin them down with tolulol and wax (which you should do). Then varnish the product so no one can tell.

3) The best artsits immitate. Be sure to slyly (ironicly) point to your sources, but change it up a bit - no one likes a direct copy.

4) Paint on non traditional surfaces. Canvas and stretcher bars can be expensive. If you use these kinds of supports, charge extra.
Alternatives include such "arte pauvera" materials as cardboard, luan and sheetrock.

5) never let them see you sweat or bleed real blood. Its demeaning.

6/29/2007 01:53:00 AM  
Blogger Tightropewalker said...

"Never let them see you sweat or bleed real blood. It's demeaning."
-Zipthwung

To an emerging artist like myself it sounds like good advice.

"Many artists use projectors and paint with inferior paint. This is a good idea, because ideas are more important than the object."

However, this I greatly disagree with for two fundamental reasons.

1. Without context for the work, the idea is only revealed to the viewer by the actual object before him. If the object is mediocre it belies a mediocre idea. In this case the idea obviously wasn't important enough to put real effort into. Anything that hides behind irony for the lack of quality is cheap. In the case that this is the idea put forth in the piece, it may be successful once, but is ultimately short lived. A shallow statement has no further room for exploration than a one-liner. And a one-liner does not become funnier through repetition.

2. The media or process are inherently linked to the idea. For a painting to be successful it must present the idea convincingly on all fronts. If one is using an anachronistic process such as painting, the act of painting is part of the content and cannot be separated from it.

Respectfully,
Richard T Scott

7/02/2007 04:26:00 PM  
Blogger Dianna in Maui said...

I completely understand the reasons for the 50/50 split and don't complain. However, one gallery I work with wants 55% which leaves me feeling a bit edgy. Now, on one hand, my work is selling there; on the other hand, I feel like I'm being pinched a little. Would it be pushy of me to try to renegotiate? The two most recent pieces sold immediately - one before it was even hung and the second just one day after. Why do I feel unreasonable for wanting 50%? AM I being unreasonable?

7/03/2007 07:00:00 PM  
Blogger Edward_ said...

Diana, I don't think you're being unreasonable. Ask your gallery to make it even. I feel strongly that if a gallery can't make it on the 50/50 split, they should consider another business.

7/03/2007 09:11:00 PM  
Blogger aurix said...

ed, you mentioned establishing relationships with curators as part of a gallerist's job. how does this work? what's the relationship like since i feel like curators are supposed to keep a distance from the commercial gallery system.. at least in theory otherwise they risk losing their reputation.

also, how do you reconcile, on the one hand, your love for an emerging artist whose work is not well known and is probably not going to make lots of sales, and on the other hand, the need to exhibit works that sell to cover the costs? how do you strike a balance? i'm asking this because i think if i were in your shoes, i wouldn't be able to find a balance/make a decision.

does this system also create a sort of hierarchy among the artists you represent, ie those who bring in the dough and those who don't? how do the artists who sell feel about covering the costs of exhibiting artists whose shows the gallery takes a loss on?

7/05/2007 08:26:00 PM  
Blogger Edward_ said...

you mentioned establishing relationships with curators as part of a gallerist's job. how does this work? what's the relationship like since i feel like curators are supposed to keep a distance from the commercial gallery system.. at least in theory otherwise they risk losing their reputation.

Developing a relationship with a gallerist, as an expert on certain artists, in no way implies the curator isn't keeping a healthy distance from the gallery system. Just as galleries develop a dialog with writers who are expected to keep their objectivity squarely in place, developing a professional relationship with a curator is not a conflict, in my opinion. We're interested in the same artists, hopefully. There are lines that shouldn't be crossed, but there's nothing wrong with an above-board dialog, IMO.

also, how do you reconcile, on the one hand, your love for an emerging artist whose work is not well known and is probably not going to make lots of sales, and on the other hand, the need to exhibit works that sell to cover the costs? how do you strike a balance?

You believe in the first artist, understand that not all markets will open up at the same speed, and keep your eye on the long-term goals. It has a way of balancing out itself, with certain artists getting the press that brings in collectors who then buy other art as well.

7/06/2007 07:45:00 AM  
Anonymous Anonymous said...

I haven't read all the comments, so I may be repeating what others have said here.

I've been an exhibiting artist for 25 years. I have never been represented by a gallery. I've had amazing and wonderful experiences with non-profit exhibition spaces (including museums), curators, and other artists. In the past 5 years or so, I've also worked as an independent curator myself. I consistently sell my work, though I could never make a living on that alone, so I teach as well (and enjoy doing so).

Although I have not gone to a lot of trouble trying to find gallery representation, the few commercial galleries I have been involved in have been a complete disaster. I honestly have found most of them less than honest.

The ones with which I've had dealings have all been well-known and successful galleries (in business a long time w/excellent reputations), either regionally or locally.

I've had bad checks written to me-- long after I discovered (purely by accident) that my work had been sold. I've had half of my work that was on exhibit, sold at another commercial gallery and wasn't told about it, either, and received the check the following calendar year. I was in an invitational group show at a very large, well known and well respected regional gallery, where I was told that they would like to represent me, but wanted to see how I did in the show (if I sold anything). I did not ask for representation; this was said to be purely unsolicited. I sold 3/4 of the work, but they never said anything more about representation. When I asked later, they said they weren't interested-- no rhyme or reason. I've had extensive interviews (last 2+ hours) with prospective galleries-- again, successful and well-established galleries-- who loved my work, wanted to represent me, and then I'd hear nothing more. Two of those galleries subsequently went out of business-- seemingly, out of the blue-- about a year later.

I could go on and on, but I really have to believe that the very successful and reputable commercial galleries are the ones that really aren't taking new artists and who generally represent "household name" artists.

I find it very discouraging; on the other hand, I've been relatively successful with non-profits and working as an independent curator. I wouldn't mind the 50% commission, though I think the majority of commercial gallery owners do NOT do all the things that have been suggested above.

7/14/2007 11:32:00 AM  
Anonymous Alex said...

Ed, you have hit on an interesting topic here. I basically agree with you, but I have not been able to financially work out handling an artist as a primary dealer on the 10% basis that you suggested above when working with another gallery. I thought the industry standard was 40% for that gallery; 20% for the primary dealer, who is doing all the paperwork, etc.; and 40% for the artist under that circumstance. Frankly, even the higher amount hasn't even been worthwhile for us, because of the sheer amount of work that has to be done tracking all the editions and sales for the photographer when they are being made at several locations, plus shipping costs and setting up the deal in the first place.
I handle contemporary work because I love the work and want to support the artists, but we make our profit on our inventory of vintage photography.
It is sometimes frustrating though. For every story about a bad dealer, I and other dealers can share ten about artists. Fortunately most on both sides are decent people. You just have to sort out the one from the other.

7/18/2007 05:37:00 PM  
Blogger tantrumette said...

Winkleman

Many weeks later:
"Some artists don't have a primary gallery, per se, and therefore sales are not split between their galleries."

I have been showing with two galleries, one in New York, one in my home state, for 15 years. The New York gallery relationship just evolved over the years with no contract. At the same time, the in-state gallery became quite successful showing my work, and despite two shows in New York, sales there were minimal.

Recently the New York gallerist became aware that I have been sending new work to the instate gallery - I had pretty much lost confidence in the New York gallery, and was continuing the relationship largely for the glamour it added to my cv. Now New York is insisting that I should show all new work to them first, so they can have first choice. (The gallerist seems to think that they are my "primary" gallery, though the results would not bear that out.) I am unwilling to do this, I never agreed to anything of the sort, and it would not be fair to my other gallery. Yet I am reluctant to end the relationship; I assume if I found another gallery they would impose the same sort of conditions. I want to be fair to both galleries, but am in a quandary about how to deal with this. Any ideas?

9/14/2007 08:19:00 AM  
Anonymous Sara said...

Zipthwung, that's the sort of cynical and disingenuous behaviour that stops galleries from supporting new artists.
I know, because I am an artist, and a gallery curator.
The best artists don't imitate. They initiate. And they know that using inferior paint that will flake off in six months or fade is not going to do your reputation as an artist any good in the customers' eyes.
I *do* sell 50/50 on consignment pieces, and I work very hard for that. I value my artists' works, I value my own work, and I value the respect of our customers. I would not have any of us ripped off.
It's a little thing called 'integrity'.

11/30/2007 10:11:00 AM  
Anonymous Anonymous said...

the 50/50 split seems fair when the gallery is doing their job.
After all, they are also trying to succeed in their business. But what happens for instance when the gallery is into cutting corners wherever possible, and even makes the artists split the exhibition expenses (food, invite printing, etc)...? How fair is the 50/50 split then?

3/09/2009 04:57:00 AM  
Blogger packman said...

I really like what you have to say here. I have a better understanding of what the costs are for a gallery now. Although being an emerging artist without my first big show in NYC or LA it would be nice to get that chance to get them to look at my work. I will continue to read all the articles you have posted to find the answer to getting my work out there. I would love to work with a gallery that believed in me and my work, well already have but in a smaller city. Well anyway take a look at my work if you wish. I know you are not accepting submissions, but what do you think. www.myartspace.com/markpack/ thanks for your time and consideration.

10/31/2010 08:32:00 PM  
Blogger Mermaids Bite said...

Excellent article, Mr. Winkleman. We work with midcareer and emerging artists and have found the 50/50 split a business survival imperative. All of the expenses you mentioned apply in our gallery. Our location is expensive, and every artist on our walls sells. The artworks are unique, and we market special projects with some of them, including those you mention plus museum exhibitions, books, and social marketing campaigns. We consider our gallery's artists both business partners and friends. The artists we work with tell us they think the arrangement fair, and we will be able to stay in business because of our relationships with artists and clients. We are the artists' and their artworks' first investor.
~C Lopez

10/29/2012 08:30:00 PM  
Blogger Paisley Kang said...

Dear Edward,

I am an emerging young artist that is having her first solo show at a small Bushwick gallery. I have not exhibited that widely, as I just graduated from college a year ago. I am a bit concerned because I was on the phone with the gallery director today, and he said that we would be splitting the profits 60-40, me keeping 40%. 50-50 seems to be standard, from what I am reading here. Should I try to negotiate with him? Or is 60-40 a widely used split in certain galleries? I am afraid that since I am not very business-oriented in the art world yet... I should be very cautious. If I should try to negotiate with him, how should I go about it without damaging our rapport?

Thank you in advance.

4/16/2013 01:24:00 AM  
Blogger Edward_ said...

Dear Paisley,

I have not heard of a 60-40 split where the artist gets 40%, no. I would normally assume you misunderstood their meaning, especially in an artist-centric gallery community like Bushwick. But I honestly don't know which gallery you're talking about or what their business model is. In the end it comes down to whether you agree to the terms or not. A show is a show...but equality in invesent tends to lead to longerterm, mutually beneficial relationships, so...

Hope this helps you decide what's best for you.

4/16/2013 08:00:00 AM  
Anonymous Ericko said...

Hello Edward,

What a fascinating article. I have recently gotten gallery representation in London. I'm wondering if this seems like a common scenario to you these days... this is from the gallery director:
"My % is 50% although I do ask all my artists to share any discounts I may have to give to clinch sales. This used to be around 10% - these days its more like 15 - 20%. When you have a buyers market this is what happens. All my artists have no problem with this - even my most prominent. They know what's going on in the world and are very realistic. However depending on the price levels I sometimes try and build in the inevitable discount I will have to give."

Is this common? Or am I getting shafted here...?

Thanks a bunch!!

4/26/2013 11:14:00 AM  
Blogger Edward_ said...

Hi Ericko,

That is very, very common actually. Most collectors insist on some sort of discount. In boom years the galleries can normally keep it down to about 10% and still make the deal, but as we hear all the time in Chelsea "20 is the new 10" meaning you very often have to discount the work 20% before the collectors will accept. All our artists also know this is what's happening in the market at the moment. I don't think you're getting shafted, unless it's the overall economy doing it to you.

Hope this helps.

4/26/2013 11:23:00 AM  
Anonymous Ericko said...

Thank you very much Edward. It does indeed help... as I was stressing out about it a bit. I'm an emerging artist, so I don't have much experience yet in these matters.

4/26/2013 12:09:00 PM  
Anonymous Ericko said...

Hello again Edward,

Thanks again for your previous response.

I am continuing to deal with this gallery in London (first show sometime in the fall). However there is a new wrinkle that sort of bothers me, and I wonder, once again... how common this is.

The gallery takes 50% like I mentioned above, but I've also been told they there expect the artist to split the cost of catalogue production... ads that are put into newspapers and art magazines... and mailing invitations. This would be applied after the sales of any work I sell.

Now, I understand that it's expensive to run a gallery, especially in a city like London, however this seems a bit excessive to me. I feel like I am on the losing end of this arrangement. If I am expected to help with the gallery costs... then is it not logical that they should help with my studio costs as well? I'm already giving them 50% to do their job.

Is this also a common practice?

thank you for any light you can shed on this.

Ericko

6/08/2013 06:36:00 AM  
Anonymous Ericko said...

hello again,

I should add to the post above that the gallery in question is not a "vanity gallery" type of place.... ie. there's no request to help with the costs of mailing things or food and openings and such.

6/08/2013 11:43:00 AM  
Anonymous mandy said...

Hi Edward,
I was recently talking with another up and coming los angeles artist and we were both left wondering by this question-- how normal is it for a gallery to pay for shipping? If they offer you a solo show but refuse to pay shipping are you being treated unfairly or is that the norm for a gallery that doesn't represent you?
thanks for your insight

1/07/2014 11:42:00 AM  
Blogger Edward_ said...

Every aspect of an exhibition is negotiable to some degree Mandy. Galleries that can easily pay shipping back and forth, do so, so that they can work toward other goals. Those who can't afford it, however, must work something out to get the work into the space.

The point is, I wouldn't get hung up on whether this or that agreement point is "fair" or not, but whether it's worth it to you.

An offer of a solo show is not necessarily synonymous with official representation. Have you discussed that formally?

If you have not, that's a good way to broach the subject. What does representation mean? What does the gallery pay for, what do they expect the artist to pay for. When you have all the facts, then again, you need to decide whether or not it's worth it to you.

1/08/2014 04:31:00 PM  
Anonymous mandy said...

thanks for your response!.

1/09/2014 10:30:00 PM  

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