07/09/2017 Is an art mafia behind the auction and the boom?

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Is an art ma a behind the auction and

the boom?
By: Eric S. Caruncho - Staff Writer / @Inq_Lifestyle Inquirer Lifestyle / 06 10 AM August 07, 2016

THESE are boom times for the Philippine art market, and auctions are INQUIRER.net
where the action is. Like Page 3.4M likes

At a recent auction, a painting by Carlos Botong Francisco fetched more Be the first of your friends to like this

than P30 million, and a BenCab went up to P37 million. No eyebrows were
raised since both are National Artists with unassailable reputations, whose
works routinely fetch seven or eight figures whenever they change hands. Follow @inquirerdotnet

But in the same auction, a painting by Andres Barrioquintoan artist who

only recently turned 40was bought for more than P9 million.
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What does the auction do? It gives you the wrong idea of what good art is,
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07/09/2017 Is an art mafia behind the auction and the boom? | Inquirer lifestyle
What does the auction do? It gives you the wrong idea of what good art is,

says SECTIONS
Didi Dee, aThursday,
veteranSeptember 7, 2017
art dealer and gallery owner who has run Hiraya TODAY'S PAPER
Paradise calling

Gallery for the last 36 years.

Most people think that if an artwork fetches a high price, therefore, it must
Evite acidentes na
be good. I beg to disagree, because whats happening now in the auction estrada com estes
houses is that they are putting too much importance on the name, the culos de 3X 37 R$

signature. But when you look at the work, you wonder how the hell did this buydaysighthd.com

fetch so many millions? If you remove the signature, would you even pay Isaiah Thomas on
trade to Cavaliers: It
that much for that? Its only because the name rang a bell. still hurts

Flippers
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Too many people are buying art for
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the wrong reasons, say a lot of
knowledgeable people on the art
scene, as a lifestyle accessory and status symbol, or as a means of turning
money into more money. 2:05 2:22
News News
A lot of his patrons are so-called flippersspeculators who buy art to Paolo Duterte, Mans Trillanes alleges Paolo
Carpio wont sign ban Duterte has P104-M i
resell at a profitadmits art collector turned gallery owner Manny de secrecy waiver bank accounts
Castro.

De Castro opened Underground in Makati two years ago, one of the dozens
of start-up galleries mushrooming in the metropolis. Underground focuses
2:14 1:57
on younger, up-and-coming artists, although it also exhibits more News News
established names such as Nilo Ilarde, Johnny Alcazaren, Lara de los Reyes Paolo Duterte says No Charlie Tan to be
way to showing tattoo invited in next Senate
and Jigger Cruz. hearing on BOC

The first thing [clients] ask me is, auction star ba yan?, he says. Buyers
base their decisions on the auction results of the artist, instead of judging
the artwork based on its merits.
2:14 2:41
News News
Some buyers will even buy works by name artists sight unseen, he Kenneth Dong defends Trillanes: Dragon-like
laments, as long as its the right size, in the right media, and the right subject self: Having photos tattoo links Paolo
with public gures is Duterte to triad
matter. Powered by

Art has become like the designer brands, says art collector and curator
Tats Rejante-Manahan. The most covetedan Hermes bagis like a
[Ronald] Ventura. If you are dressed in Hermes, all of a sudden you are
fashionable and stylish. If you own a Ventura, youre a collector. Youre
buying the brand.

Poster/whipping boy

For better or worse, visual artist Ronald Ventura has become the poster
some say whippingboy for the current art boom. Arguably, the watershed
event was when one of his works set a record price of over a million US
dollars at Sothebys auction house in 2011. Since then, his works have
fetched significantly higher prices at foreign and local auction houses, and
other Filipino artists have followed in his wake.

Hindi na uso yung poor is pure, adds Manahan. Hindi na uso yung
starving artist ngayon. When Ventura was starting he was in torn jeans
and not the fashionably torn onesand rubber slippers. Now hes on the
cover of Town & Country. Im happy for him.

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07/09/2017 Is an art mafia behind the auction and the boom? | Inquirer lifestyle

But for every Ronald Ventura there are scores of unknown or

SECTIONS Thursday, September 7, 2017
underappreciated Filipino artists who continue to labor in obscurity.
TODAY'S PAPER

What the auctions did in the last few years is, they marginalized a lot of
promising artists who are doing good work, says Hirayas Dee.

But because there were no parties interested in buying their work and
bringing them to the auctions the way things are being done, then theyre
all in the periphery. Nobody hears anything about a whole lot of artists, only
those that are performing well in the auctions. And these are the same
names I hear from clients. Do you have a Ventura? Hes doing well in the
auctions.

All about the buzz

They say that attention, not information, is the new currency. This is true
for art as it is for brand advertising: Its all about the buzz, and the surest
way to generate buzz is to sell for huge amounts in the auctions. Then it
becomes a self-perpetuating cycle: The higher the price tag, the higher the
demand, and the more media buzz generated.

It gives you the wrong notion of what is good value, and the wrong notion
of what is good, says Dee.

On the whole, she adds, artists dont really benefit from the higher prices
because most of the works are in the secondary market, and while current
intellectual property laws allow for the possibility of creators getting a piece
of the profits from secondary sales, the implementing guidelines have yet to
be worked out. In the meantime, they get nada.

The auctions also result in inflated and unrealistic prices that will
eventually harm the artist, she says.

There are groups that are investing in art, meaning to say they buy the
works of an artist, then they drop them in an auction and among
themselves push the levels so at the end of the day their collection increases
in value, she adds. You find a lot of artists who, out of nowhere, suddenly
their prices jump to a higher level, but I call that manipulated.

The existence of the so-called art mafia, a secret cabal of collectors,

brokers and speculators who try to manipulate art prices the way insider
traders play the stock market, has long been talked about in the art world,
though no one has actually named names.

The relationship between auction houses, galleries and collectors is very

symbiotic, says Jaime Ponce de Leon, who runs Leon Gallery and auction
house. We are all players in the art world, and all of us make it go round.

Regarding groups who hoard the works of certain artists and try to control
their prices, he says: These things happen, and it happens everywhere, and
theres no law against it. Its like [Israeli art collector Jose] Mugrabi in New
York, he owns hundreds of Andy Warhols, so he cannot afford to let an
Andy Warhol sell for way lesshe has to protect his inventory. The same
way that if youre a collector of a certain artist, you would also want to
protect his prices because you want to protect your stock.

Most transparent venue

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07/09/2017 Is an art mafia behind the auction and the boom? | Inquirer lifestyle
Most transparent venue

SECTIONS Thursday, September 7, 2017

Actually, says Ponce de Leon, an art auction offers the most transparent
TODAY'S PAPER
means of buying and selling art because everything is public.

Auction houses are indispensable components of the art world, he says.

Every collector would always base his decision on acquiring art on auction
results. For an artist, what would really establish his price is consistent
showing in an auction. Hence, in an auction, galleries protect the prices of
their artists because they want to justify why a collector is paying so much.

For all its transparency, however, things can also get murky at auctions.

In some countries with advanced economies, there are laws governing

auctions, says Richie Lerma of Salcedo Auctions, a Makati-based auction
house.

Ideally, he says, the auction houses serve as a kind of exchange where

market forces determine the price of a certain artwork.

A lot of the pieces are coming out through the auction houses because if
youre the seller, you want to get the fair market price for it, rather than
through a one-on-one private sale.

Apart from supply and demand, other factors can weigh in, such as the
length of an artists career, his prominence in the media, his inclusion in art
books, and his previous performance in auctions.

Open to manipulation

But just like the stock market, the art market is open to price manipulation,
price fixing and insider trading.

In fact there are certain practices being done by certain galleries when it
comes to their auctions which would be considered illegal, says Lerma.
No. 1 is shill bidding.

Shill bidding is when someoneusually a stooge planted by the sellerbids

on an item on auction to artificially inflate its price.

As a hypothetical example, Lerma says an artist and collector may collude

to bloat that artists auction price, when in reality they may have already
agreed on a much lower price.

What happens next?, he adds. Buyer pays P1.5 million, the money is
remitted to the artist who refunds the balance. Buyer only effectively pays
P200,000. But in the publics mind, the artist sold for P1.5 million, and the
artwork is worth P1.5 million. The artist can now get commissions and sell
his works at a higher price. Thats whats going on.

The winning bid is also whats reported in the media. What isnt usually
reported is when works sold at auction reappear on the market at
significantly lower prices.

People have to be more circumspect when it comes to participating in the

art market because they can fall victim to these kinds of manipulations by
certain artists or collectors, says Lerma.

Auctions can also go the other way. If, by the vagaries of chance, a work by a
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07/09/2017 Is an art mafia behind the auction and the boom? | Inquirer lifestyle
Auctions can also go the other way. If, by the vagaries of chance, a work by a

SECTIONS
certain artist goes up for
Thursday, auction7,and
September 2017 the collectors who are interested in TODAY'S PAPER
him arent present, it might go for a lower price or not sell at all.

Right market value

I dont believe that auctions determine the right market value of an

artists work, says BenCab. They simply determine what collectors are
willing to pay for a particular artists work at that given time.

Consistent performance over time is what eventually sets an artists price

level, but the machinations of certain players can throw the proverbial
spanner in the works.

Were a venue, and if people want to keep on bidding up the prices of

certain artists, thats their problem, says Salcedo Auctions Lerma. But if
the results are not real, youre creating a bubble.

The art market is booming now, adds Karen Lerma, Richies wife and
partner at Salcedo Auctions. The worst thing that Filipinos can do is to let
[the art market] destroy itself, for all of these things happening to implode.

The Philippines isnt quite there yet, but it may only be a matter of time.

Collectors now are only looking to flip, laments Dee. Gone are the days
when people bought art first because they loved the work, second to
support the artist, and third for investment. Now its the other way around,
they want to flip it and make money quickly, never mind if it is benefiting
the artist directly, or if it is part of a process of developing art.

Money launderers

Dee suspects, as do many observers of the local art market, that some of the
auction action is being driven by money launderers.

Ive been in the business for almost four decades and Ive never seen the
prices of living artists go so high, she says. Somebodys creating the supply
and demand. Artist A is due to have an exhibit in gallery A. The day before,
everything is sold out and they make sure everyone knows it. When, in fact,
all the works were bought by one group. A few months later, youll see the
works of artist A at auction being pushed to levels that are just not real.
Now you understand why. Who profits at the end of the day, if not the ones
who cornered the market in the first place?

It is also not uncommon, she says, for losing bidders to receive calls
informing them that the artwork they bid on and lost is now available at
their price, fueling suspicions that the winning bid was made by a shill.

And what of the artists and their art?

The ultimate freedom that artists speak of is when they are able to do their
art without any pressure to do it in a certain manner for a market, adds
Dee. Its real freedom when an artist can say: This is my work, take it or
leave it.

But when somebody dictates to the artist, do it like this, this size, it kills
everything. The show is sold out, can you make another piece? You kill the
spirit. You prostitute the muse. It makes [the artist] follow some kind of
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07/09/2017 Is an art mafia behind the auction and the boom? | Inquirer lifestyle
spirit. You prostitute the muse. It makes [the artist] follow some kind of
formula, and eventually its the same thing being bought over and over
SECTIONS Thursday, September 7, 2017
again.
TODAY'S PAPER

Much simpler time

Although his works currently fetch some of the highest prices at auction,
National Artist BenCab once expressed frustration at the number of
collectors pestering him for artwork, some of them even specifying that
they want a Sabel or a Larawan piece, as if he could produce them on
demand.

Tingin nila sa akin, pera, he said.

Ironically, one of his paintings, a Sabel, sold for a record P46.7 million at
an auction shortly afterward.

I think all artists really aspire to paint for themselves but many times have
to compromise and allow galleries, dealers and even collectors to dictate
upon them, he says.

Some will do it out of necessity, although established artists should not

discredit themselves by catering to the market. Auction houses will always
attempt to commission an artist to paint for the next auction, even the
foreign auction houses have done it with local artists. Some consent to do it,
but I have never felt right about it.

Things were much simpler during the time I started my artistic career. One
just needed to be original, focused and consistent. Nowadays artists put too
much emphasis on shock value, perhaps because it is what sells. There is
also too much gimmickry to the point that one can no longer distinguish
what is art and what is not.

Unfortunately, this nostalgia for a simpler time when art was made for arts
sake may no longer be possible in the age of globalized hypercapitalism.

As the late art critic Robert Hughes concluded, The new job of art is to sit
on the wall and get more expensive.

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