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Is an ‘art mafia’ behind the auction and the boom?

lifestyle / Sunday Lifestyle
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Is an ‘art mafia’ behind the auction and the boom?

By: - Staff Writer / @Inq_Lifestyle
/ 06:10 AM August 07, 2016

THESE are boom times for the Philippine art market, and auctions are where the action is.

At a recent auction, a painting by Carlos “Botong” Francisco fetched more 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.

But in the same auction, a painting by Andres Barrioquinto—an artist who only recently turned 40—was bought for more than P9 million.

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Works by artists of roughly the same generation such as Ronald Ventura, Geraldine Javier and Rodel Tapaya, also fetched seven figures.

Good for them, one might think. Filipino contemporary artists are finally getting their due.

Wrong idea

But a specter is haunting the local art scene, and its name is “commodification.”

There’s a vague sense of unease underlying the apparently vibrant and thriving market, the nagging sense that the Philippine art scene is being driven by the buyers and sellers of art, not its makers. And that with the current obsession with local art’s price tag, something vital—call it the “soul” of Philippine art—is in danger of being lost.

“What does the auction do? It gives you the wrong idea of what good art is,” says Didi Dee, a veteran art dealer and gallery owner who has run Hiraya Gallery for the last 36 years.

“Most people think that if an artwork fetches a high price, therefore, it must be good. I beg to disagree, because what’s happening now in the auction houses is that they are putting too much importance on the name, the signature. But when you look at the work, you wonder ‘how the hell did this fetch so many millions?’ If you remove the signature, would you even pay that much for that? It’s only because the name rang a bell.”

‘Flippers’

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Too many people are buying art for 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.

A lot of his patrons are so-called “flippers”—speculators who buy art to resell at a profit—admits art collector turned gallery owner Manny de Castro.

De Castro opened Underground in Makati two years ago, one of the dozens of start-up galleries mushrooming in the metropolis. Underground focuses on younger, up-and-coming artists, although it also exhibits more established names such as Nilo Ilarde, Johnny Alcazaren, Lara de los Reyes and Jigger Cruz.

“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.”

Some buyers will even buy works by “name” artists sight unseen, he laments, as long as it’s the right size, in the right media, and the right subject matter.

“Art has become like the designer brands,” says art collector and curator Tats Rejante-Manahan. “The most coveted—an Hermes bag—is like a [Ronald] Ventura. If you are dressed in Hermes, all of a sudden you are fashionable and stylish. If you own a Ventura, you’re a collector. You’re buying the brand.”

Poster/whipping boy

For better or worse, visual artist Ronald Ventura has become the poster—some say whipping—boy 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 Sotheby’s 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 ones—and rubber slippers. Now he’s on the cover of Town & Country. I’m happy for him.”

But for every Ronald Ventura there are scores of unknown or underappreciated Filipino artists who continue to labor in obscurity.

“What the auctions did in the last few years is, they marginalized a lot of promising artists who are doing good work,” says Hiraya’s 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 they’re 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? He’s 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: It’s 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 don’t 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 there’s no law against it. It’s 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 less—he has to protect his inventory. The same way that if you’re a collector of a certain artist, you would also want to protect his prices because you want to protect your stock.”

Most transparent venue

Actually, says Ponce de Leon, an art auction offers the most transparent 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 you’re 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 artist’s 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 someone—usually a stooge planted by the seller—bids 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 artist’s 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 public’s 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. That’s what’s going on.”

The winning bid is also what’s reported in the media. What isn’t 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 certain artist goes up for auction and the collectors who are interested in him aren’t present, it might go for a lower price or not sell at all.

‘Right market value’

“I don’t believe that auctions determine the ‘right market value’ of an artist’s work,” says BenCab. “They simply determine what collectors are willing to pay for a particular artist’s work at that given time.”

Consistent performance over time is what eventually sets an artist’s price level, but the machinations of certain players can throw the proverbial spanner in the works.

“We’re a venue, and if people want to keep on bidding up the prices of certain artists, that’s their problem,” says Salcedo Auction’s Lerma. “But if the results are not real, you’re creating a bubble.”

“The art market is booming now,” adds Karen Lerma, Richie’s 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 isn’t 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 it’s 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.

“I’ve been in the business for almost four decades and I’ve never seen the prices of living artists go so high,” she says. “Somebody’s 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, you’ll 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. “It’s 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 formula, and eventually it’s the same thing being bought over and over again.”

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 art’s 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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TAGS: art dealer, Art Mafia, Auction, Carlos “Botong” Francisco, Didi Dee, gallery owner, Geraldine Javier, Hiraya Gallery, Rodel Tapaya, Ronald Ventura, Sunday Lifestyle
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