The statistical fact is that the largest part of the worlds artistic production has and will continue to end up in the trash. It was far less in the past, but considering the onslaught of “artists” it is mathematically clear that most of what is being made now will end up in the trash in the same way that most of the drawings your children have produced have returned to the world as carriers of ink in the form of recycled paper.

My diagram in not complete, but it shows a basic flow from the artist to one of 3 final locations for artworks. Museums, Collectors and Trash. This is a harsh truth, but it is a truth and needs to be known so we can understand how the parts actually work together.

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After my recent post about the fun factor in the art market I want to put a few numbers to the actual cost of a gallery. First I will just outline and define some of the players involved.

Assumptions:

A Gallery has at least 1 person who needs to live off the money made in the gallery. I’ll call this person the gallery owner (go). I will also assume that go has a life cost of ~ €2000 assuming no children, and no student debt. If go has 1 artist who he represents, then we can assume that that artist also has a living cost of ~€2000 + materials. If artist is exclusively represented by go then we can safely assume that go needs to make €4000 + materials to cover the living costs of all parties. If we take a material cost of 10% of sales then we could assume a total of  €4400 for the gallery to break even if no other money is spent.

Of course go cannot show artist work without a space. This could be a joint space, a project space, or a gallery that is rented somewhere. Let me assume that a minimum for such a space will be €500 + utilities. That would be about €700. So for space,go and artist we now need to have €5100 in sales to break even. If this is in Germany then that summ end up being €5100+19%VAT = €6069.

No we can assume that artist will not only show with go, and that go cannot just show 1 artist. If the gallery has 4 shows per year and each show has a different artist, and each of those artists show with 3 galleries we have 1/3 artist x 4 = 1 1/3 artists for the gallery to support. If we stay with the €4400 for 1 artist then we end up with a sum of ~€3200 per month + rent and go living expenses. This also assumes that all the galleries who represent the artist are selling enough to help cover their share of the artists living costs.

The gallery does have to do advertising, networking, framing, openings and dinners etc.. If this cannot be done by go alone then the gallery needs to hire some people. Each full staff member will add at least €2000 to the monthly expenses. Lets say the gallery needs 1 administrative person and 1 sales assistant, where as all 3 also share shipping work, cleanup, setup, hanging, gallery painting etc.. So with our adjusted artists cost we now assume

€700 + €3200 + €2000 + €2000 + €2000 = €9900 + all the stuff mentioned above.

If we put a simple number on those points (because they can vary greatly) of €1500 we end up with a monthly expense of €11400. We also have to assume that we have to charge VAT, so that number become €13566 including 19%. That scales up to €162792 per year where as there are active and less active sales months in the art calendar. From my experience the hot months are Feb-Apr, June, Sep-Nov. Thats 7/12 of the year. So if we take the sales we need to cover the expenses of the year and place them in the 7 months we get €23256 for each of those 7 months.

Now let’s do a reality check.

€23.256 @€500 / Artwork = 46 pictures per month. If the gallery is open 5 days a week = ~20 days a month then the gallery would need to sell 2.3 pictures a day on average. €23.256 @€1000 / Artwork = 23 pictures per month. If the gallery is open 5 days a week = ~20 days a month then the gallery would need to sell 1.2 pictures a day on average. You get the idea. Please remember that this is a break even calculation where there are no reserves built.

So I have done all this theoretical spitball math to point to a problem. If the engagement of the client base, the collectors, is not there then the galleries cannot function. I do not know of a single gallery that is not a mega gallery where the kind of visitor flow is so large that this kind of calculation could ever become a reality. The simple fact is that people will never buy what they do not know exists. If the collectors view the art world through a filter like the internet and do not engage with the art world where they are then only the work that is propagated by the large galleries will ever be seen, or seen enough. If the small galleries that are the breeding ground of young talent are ever going to survive it will only be because the people who buy art are aware of them and seek them out.

The art world ecosystem need all of the players. The mega galleries play an important role as do mid tier and small galleries. We could of course just say that all of this will regulate itself, as it always has. That is probably true. I cannot think of a sensible way to subvention the small galleries because they need to grow like all plants in the wild.

Nonetheless, it is important that the collectors and visitors to the galleries understand that we are effectively the backbone of the art world. We take the risks to show work we believe in. We invest large sums of money and time to help our artists grow. Many of us spend the money we have earned in other places to do this, and a great many of us will never make that money back.

I am not asking for pity. It is neither needed nor desired. Being a gallerist is a choice, and those of us who know what it means and have made it beyond the begining are proud of what we have achieved for the most part. But the artworld needs to understand that this is a labour of love with significant risks.

If you visit a gallery regularly to enjoy the artwork, enjoy the company and drink the wine then you should buy art.

If you can’t afford what’s on the wall then speak to the gallerist about other work they have, or a payment plan. Bottom line is, if you like what the galleries are doing then support them. Buy art.

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The art world is no fun at all!! We all have passions, hobbies, things we do that enrich our lives. These pastimes are part  reward that we give ourselves, part things that expand our ever hungry desire for new experiences,  part socially driven events and part whatever else motivates us to get off of our ass and do something.

When I was younger and in the gallery scene in SOHO of the 1980’s it was a fun vibe. Galleries all had openings on the same night. There was cheap wine, sometimes cheese and crackers, and most importantly lots of people. Those people did not come to a single dedicated exhibition, but would wander around the neighborhood and see many shows, much new art and run into people they saw at any of the other galleries. Out of this discussions would develop. From those discussion grew an engagement with the work, or not. Point is that the situation allowed for it.

All the galleries were sort of in the same boat. All of them were trying to get by. If you look at the Art Forum ads from that time you will see that all the artists showed with all the galleries, and some galleries got lucky. It was the wild west of you will. People were in it for the fun, for the excitement. They could buy 1-2 artworks per month on their salary and really had something to enjoy and to show their friends. Most of those artworks ended up not really rising in value on the market, but that was not so important because the collectors were engaged in a happening.

the collectors were engaged in a happening

In ~1991 that all changed, but it is safe to assume it changed earlier when some players in the market made their experience no longer about the artwork or the support of the artists, but about making money off of selling the work they bought. The simple idea is the same as with compound interest. Since it seemed to work everyone ran with it, until the ground they were running on broke away… crash.

I am writing this because the young generation of collectors that are in the market now did not experience that. Hell, I barely experienced it, and I am not a young man. The young generation, the digital natives, did not experience the culture that was there before. The language of the art world is now so filled with things related to money that it is hard to get away from it. And as our understanding of value is very closely chained to it’s price we cannot get away from it either.

But there is a point where the development becomes self consuming, and it seems we have reached that point. The cost for a gallery (my gallery) to do a fair is always a five digit number. I am a small gallery. The larger galleries have 6-7 digit costs for a single fair. If we do some simple math it becomes clear that this can only be paid for if the artworks are expensive enough to make the income based on the galleries share of the artwork enough to justify the experience.

As a simple example: I spend ~€45,000 to do Paris Photo. This is a very important fair for my gallery, so I don’t really have a choice. From the artwork I sell there I have between a 15-50% share of the raw sales that my gallery gets to keep after paying the artists or owners. For the sake of this example if I take an average and say that my share is ~32.5% then I need to sell €138,462 in Art to make the fair break even. I have wall space for ~30 works of art if I work with smaller prints, etc. So by that measure my average price needs to be €4,615.

my average price needs to be €4,615

The fair has a visitor count that is 5 digits. The real selling time is in the morning during the VIP time when the collectors and museums have more space to actually look at the artworks. That time window is 2 hours per day. Assuming I have to make 80% of my sales in that time I need to sell 24 artworks in 8 hours standing in a room with ~200 other galleries who all need to do the same.

The result of this is that most of the galleries are now showing work that they assume has the best chance to sell. That chance has a lot to do with how often an artist or artwork has been seen. There are other factor of course. The issue of a galleries reputation and the trust built between a gallery and a collector are major factors. But those factors only help the galleries that are established. Everyone else will need to  play it safe in the hopes (delusion) that their chances of selling something will be better if it appeals more to the masses. And we can then sit by and watch the level of quality and newness drop to the lowest common denominator. That is just plain shitty.

Making the fairs cheaper won’t work because they need to make money. Making the art more expensive is not working because it becomes prohibitive to buy based on a regular person’s budget. If collectors are not buying regularly then they are not really engaged. It looks like this is broken from all sides, and that a simple magic fix does not exist.

Why can’t we go back to the engagement, the social experience of SOHO in the 1980’s?

Because we are not in SOHO in the 1980’s.

right… We are in the art market of 2018 and it’s a bit broken.  It’s time to think hard about how we can bring the fun back. Ideas?

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