How to Buy Art in a Recession: Part I

It's a buyer's market right now, there is no doubt. Even Damien Hirst is admitting it [from artinfo.com]:

Brit art superstar Damien Hirst has accepted the fate of the art market, admitting that it had been too expensive and saying that he will gladly sell his work for less.

In an interview with the Independent, Hirst admitted that his Beautiful Artemis Thor Neptune Odin Delusional Sapphic Inspirational Hypnosis Painting, which failed to sell at Phillips's contemporary auction last week with a $3–4 million estimate, "was overpriced," saying: "It was bought from me less than a year ago at half the price. In a way it's good. We are looking at more realistic prices."

And while seasoned collectors like Eli Broad knew how to wait and save on the artwork they wanted [from Bloomberg]...

Eli Broad and fashion designer Valentino were among the collectors who converged on Sotheby's in New York last night to pick through big-name contemporary art at discount prices.

"It's a half-price sale," said Broad, a 75-year-old billionaire who predicted for years that prices would fall. "Things are a little more reasonable."

...there's no reason only he should enjoy having the upper hand. In the article quoted above, Damien Hirst noted, "As an artist, you don't stop making art because people are not buying it." True enough, but as Broad and the Rubells (see here) are demonstrating, as a Collector, you don't stop buying art because other people are not buying it. Now is the time to add those important key pieces to your collection...believe me.

Of course, if you're not a fellow billionaire like Mr. Broad, you may still need to reconsider how you're going about that. So this thread is dedicated to things I've learned, by both buying and selling art over the years, about how to buy art in a recession.

It's Not All About the Discounts
You can expect a much meeker response from dealers to your inquiries about discounts these days, I'll be on that. But focusing on discounts alone may not be your best means of securing that piece you want. Discussing discounts in conjunction with a long-term interest in the gallery program is your best avenue here. If you're only interested in one artist or one piece at the gallery, you might try asking for a significant discount, but personally I've turned down such offers recently and I will continue to do so (I value my artists' work too much to essentially "give it away" to folks who aren't in it for the long run). A one-time huge discount may make sense to a dealer and artist if your collection is world-famous, but few world-famous collectors buy so shallowly.

The purchasing advantage to this combination approach here should be clear. By showing interest in the longevity of the artist's career and the gallery (what many gallerists are most focused on at the moment), your offer becomes one the dealer will consider from a long-term perspective. You can always fib about your interest, obviously, but dealers are generally pretty good reads of sincerity (spare me the "how ironic" cracks please).

Payment Plans
Many younger collectors may not know that most galleries are happy to work out some sort of payment plan. I suspect this willingness is hitting a decade high about now as well. When I first started buying art I asked for payment plans, and got them, all the time. Most dealers will not offer both a discount and a payment plan, so you may want to consider what makes most sense for you. Also, keep in mind that a dealer will not deliver the piece to you until it has been paid for in full. If you want to install it by a certain date, you will want to consider that as well.

One easy way to handle a payment plan (and one that may just encourage a dealer to also offer a discount) is to give the gallery a series of dated checks totaling the full amount that they can deposit over the course of the payment schedule. Having the checks in hand helps them not have to send out reminders (which is why they may be more willing to consider a discount combination).

Advanced Investments
Say an artist you want to buy a work by is having a solo show in a few months. But even in this economic environment, you know the likelihood of you getting first pick of the new work is low. One way to perhaps work your way up the pecking order is to offer the gallery an advance payment toward a piece. (In case you didn't know, collectors make financial arrangements with dealers they like all the time, investing in the gallery and its artists for access to work down the road.)

Many dealers may not volunteer that they are willing to accept such an offer (because it sends the wrong signals), but it's easy enough to ask them about business in general, suggest you're willing to help out in this difficult time, and then define the terms of the arrangement to suit your goals. You would definitely want to get something in writing and perhaps even have your attorney review it (think what happened with The Project a few years back), but usually such arrangements go off without a hitch and are truly mutually beneficial.

There are other options you can discuss with dealers (some of which I'll discuss later this week...pressed for time today), but the main message of this post is that if you wait until the market rebounds, you'll miss out on the opportunities available now. Take a page from Mr. Broad's book...now is the time to get that art you want.

Image above: Jennifer Dalton, Are Times of Recession Good For Art?, 2008, Mixed media (two gumball machines filled with plastic capsules with custom foil-wrapped chocolate coins inside), 72” x 24” x 24” (on pedestal), Edition of 3.