Collector or Dealer?

An interesting entry recently posted on the Art Law Blog

http://theartlawblog.blogspot.com/2008/10/ogunsanya-was-unsophisticated.html

notes that, “A motion to dismiss was denied last week in the case of the memorabilia collector who claims he was duped into selling a bunch of previously unknown Diane Arbus photographs for $3,500.” So it looks like Bob Langmuir and Bayo Ogunsanya will be going to court afterall.

The blog entry states, “Langmuir admitted to a Philadelphia Inquirer reporter that he knew the photographs were rare Diane Arbus prints before the second transaction with Ogunsanya. Langmuir told the reporter that at the time of the second transaction, he tried to ‘stay calm,’ but he was ‘burning up.’”

Sounds like bad news for Bob, except for one thing.

This blog entry, and nearly every other article on the affair, characterizes Bayo Ogunsanya as an innocent “collector.” In fact, as Bayo admitted to me himself, he was a dealer who for years had been buying items at storage unit auctions and selling them at flea markets, ephemera shows and on eBay. I met him as a dealer at an African American ephemera show, and when I went to his house he had a room full of material that he told me he was putting on eBay.

As anyone in the business knows, this makes all the difference. A dealer has a certain moral obligation not to take advantage of the uninformed civilians from whom he purchases his goods. But when a dealer buys from another dealer, it’s each man for himself. Every dealer has equal access to the secrets of his trade. Energy and intellectual curiosity separate those who bother to do their work from those who do not.

Bayo Ogunsanya had every chance in the world to do the research that Bob did. He’d owned the Hubert’s Archive for more than a year, and he lived within a subway ride of the some of the greatest galleries, museums and libraries in America. If he wanted to research the Hubert’s Archive, he could have. Bob Langmuir, after his first buy from Bayo, got curious and did the work. And even after his second buy, when he supposedly “knew” he was purchasing Arbus photographs, he faced still another year of painstaking research before the first few photos were authenticated by the Arbus estate.

The fact is, Bayo Ogunsanya should have done his homework. He did not, and he paid a price for his lack of curiosity. It will be interesting to see if the court, unlike the media, can grasp the elemental distinction between “collector” and “dealer.”

Unique Platform

This from Artfino, an internet site that tracks happenings in the art world…

“Mercury Group, Russia’s largest luxury retail company, will assume control of boutique auction house Phillips de Pury & Company, according to an agreement announced today. Under the terms of the deal, Simon de Pury will remain chairman and an important stakeholder in the company.”

According to the Wall Street Journal, “Mercury owns the TSUM department store in downtown Moscow, and the Barvikha Luxury Village in a Moscow suburb. Its shops sell brands such as Gucci, Prada, Giorgio Armani and Rolex. It also has showrooms for Ferrari, Maserati and Bentley cars. In October 2007, the Luxury Village hosted the first contemporary-art exhibition in Russia by Gagosian Gallery, the art world’s global leader in exhibition space.”

In a press release announcing the acquisition, de Pury said, “we have seen tremendous growth in the company over the last four years and this partnership with a major player in the luxury sector will allow us to provide a unique platform to new and fast growing markets.”

The implications are huge for the Hubert’s Archive, currently stranded at Phillips after they cancelled their auction last spring. Once Bob Langmuir, owner of the archive, irons out his difficulties with Bayo Ogunsanya (Ogunsanya, first purchaser of the archive, is suing Langmuir in hopes of securing a chunk of the so-far non-existent profits), Bob has got to come to some new arrangement with Phillips regarding the fate of the archive and their contractual obligations to him. Will he be negotiating with Simone de Pury or some Russian bean counter who’s never heard of Diane Arbus?

It’s possible the Mercury Group’s acquisition might work in Bob’s favor. A fresh cash infusion and new ownership could be a strong incentive for Phillips to clear up old business. The archive could be put up for auction once again, or simply wind up back in Bob’s lap. And there is another possibility - one which pleases me as much as the thought of the Hubert’s Archive being placed in the Metropolitan Museum.

Perhaps Phillips was telling the truth all along, and there really was a White Knight buyer for the Hubert’s Archive. Perhaps Mercury Group was the buyer, and Charlie and Diane will wind up at the Gagosian Gallery in Luxury Village just outside of Moscow, cheek by jowl with Gucci, Prada, Giorgio Armani and Rolex. Charlie and Woogie would probably dig it, though Diane would be appalled.

Talk about a “unique platform…”

Déjà vu All Over Again

Phillips de Pury & Co. has worked hard to cultivate its image as a younger, hipper version of Sotheby’s or Christie’s. They’re pushing the envelope, breaking new ground. Like any pioneering course of action, this one entails certain risks.

All summer they’ve been hyping their October 1st auction of hip-hop jewelry. Every week would bring a new press release telling us how cool it was that Tupak Shakur’s historic bling was coming up for sale. A part of the proceeds was even going to charity! It was as cheeky and innovative a move as attempting to auction little-known Diane Arbus sideshow photos. And as risky.

This week Phillips de Pury & Co. announced it was canceling the hip-hop jewelry auction. The reasons they gave sounded as fishy as the story of the White Knight buyer who was supposed to be buying the Arbus/Hubert’s archive.

In a September 19th article, the Village Voice sneered, “Ha ha ha ha! The long-awaited Phillips de Pury bling – ahem; ‘Hip Hop’s crown jewels’ – auction, originally scheduled for October 1, has been postponed to March of next year in order to ‘Accommodate Strong Market Interest in Works,’ which surely translates into something like ‘to accommodate strong rapper interest in keeping all the world’s gold to themselves,’ or ‘to accommodate the sudden extreme poverty of the dudes who would otherwise be ironically bidding on Diddy’s vintage Bad Boy chain.’ Presumably there aren’t a lot of hedge fund dudes looking for that ‘CRUNK AIN’T DEAD’ trophy piece for the condo they can no longer afford.”

A pattern seems to be establishing itself. Phillips tries something creative and risky. If it works they reap the publicity (as well as the profits). If it looks like it’s not going to fly they yank the sale and leave the ensuing mess to their lawyers and PR people to sort out.

Perhaps such behavior is simply an unfortunate byproduct of the auction gallery’s culture of youthful exuberance. The seemingly arbitrary cancellations make for exciting news, and Phillips has thus far managed to escape without much public relations damage. But Bob Langmuir has already felt the painful consequences of Phillips’ capricious conduct in a way that people like Biz Markie, Notorious B.I.G., or P. Diddy probably never will.

Jeff Rosenheim

There is a fascinating article in the "New York Sun" about curator Jeff Rosenheim of the Metropolitan Museum of Art, and his handling of the Walker Evans archive.

http://www.nysun.com/arts/putting-the-walker-evans-archive-in-order/83817/

It gives some indication of his working methods, and the challenges he faced bringing order to a chaotic, but vitally important, piece of photographic history. The "Sun" reports, “It took six years, from the time the Met acquired it in 1994 until 2000, for the Evans Archive database to become accessible, and it was not until late last year that it was accessible online.”

As has been mentioned in this blog, the Arbus Estate donated Arbus’s holdings to the Met last December. Rosenheim, presumably, will be charged with organizing and cataloging the Arbus material, much as he did with Walker Evans. It may take years, but at some point – after decades of strict and restrictive control by the Estate – the Arbus archive will be available for scholarly use and occasional public exhibition. Perhaps there will be similar online access to the Arbus database at the Met.

We can only hope that by then Phillips de Pury & Company will have resolved their issues with Robert Langmuir, and that the Hubert’s archive will have found its way back to the rest of the Arbus materials. Then Jeff Rosenheim will be able to assemble that Hubert’s-Arbus exhibition he told Bob about.

I, for one, can hardly wait.

Dinosaur Legs

It’s hard to believe a month has passed since my last entry. Fortunately no one does anything in New York in the summertime, so there’s not much to report. No movement on the lawsuit with Bayo, and no further announcement from Phillips de Pury & Company about the mysterious white knight who was supposed to purchase the Hubert’s archive and the recently discovered Diane Arbus photos en bloc. He’s probably at the beach.

A very cogent summary of the Phillips situation, written by Stephen Perloff, appears on Alex Novak’s "e photo newsletter."

http://www.iphotocentral.com/news/issue_view.php/156/147

On the movie front, Philip Seymour Hoffman has said he’s too busy with other projects to play the part of Bob Langmuir. To which Bob responded, “How can we expect Phil to want to play me when I don’t even want to?” I’m thinking Paul Giamatti, but will welcome suggestions – Anyone?? Maybe we’ll just get Bob a gig on Comedy Central.

Unlike my New York brethren I've been very busy this summer working my day job - chasing around the country looking for rare nautical books and manuscripts. And this brings me back to the subject of my last blog entry. After I published it on the hubertsfreaks.com website someone asked me, “If what you say is true, and the big auction houses have attracted all the best books and customers - how do the rest of you survive?”

The answer in my case, and for someone like Bob Langmuir as well, evokes imagery of small mammals running between the legs of lumbering dinosaurs. We’re buying and selling stuff the big auction houses can’t “see.” Obviously we can’t compete with the megafauna for Fitzgerald first editions or Cook voyages. But Fitzgerald’s Negro barber might have saved some photos of him trimming his famous client's hair, or some sailor for Captain Cook might have written his girlfriend when he landed back in England. This is the kind of material that Sotheby’s might miss, or consider not worth handling. Bob and I have made careers of discovering, evaluating and selling such minutia.

The valuable books - the items rich guys compete for at Sotheby’s and Christies – are all known. Just like the iconic photos of Diane Arbus, they all have sales records and, with the Internet, everyone has access to price information about them. For the most part, people like Bob and me search out manuscript material and ephemera – unique items, things that require a little imagination to understand and evaluate.

In fact, the best manuscript I ever dealt with had sold at Sotheby’s 20 years before for a few thousand dollars. The cataloger hadn’t read it closely and didn’t understand that it contained a hitherto unknown report of an important Pacific voyage. We bought it from a descendant of the purchaser, and read it carefully the second time. It sold for six figures.

Similarly, the man who first bought the Hubert’s archive didn’t know what he had. Bob Langmuir, to his eternal credit, figured it out. Thanks to him the archive has been identified and its cultural importance established. For his efforts he’s being sued by an opportunistic mammal and is in danger of being stepped on by one of the lesser dinosaurs. He says he’s been spending a lot of time in Mexico. Who can blame him?

Bigger and Badder

In my last blog entry, I wrote about the “rich getting richer,” and the concomitant escalation of high-end material that has taken over every area of the high art world, including rare books. The best material becomes ever more desirable (and costly), while everything else stands still or falls back. It’s as true for old books as it is for old masters.

Part of this mirrors an economy in which the divide between the haves and have-nots grows greater every year. But a great deal of it is caused by a radical change in the circumstances under which high art objects are bought and sold. There have always been dealers and connoisseurs who evaluate material and move it into the hands of collectors. What’s really changed over the past 20 years is that auction houses have become increasingly dominant, in many instances displacing private dealers, galleries, and other specialists.

This has happened on macro and micro levels. Little dealers, like Bob Langmuir, used to get house calls. Now that material gets put on eBay or goes to local auctions. At the other end of the scale auction houses like Christies and Sotheby’s have become international giants.

These big auction houses have been brilliant at marketing themselves as honest brokers. When a dealer or middleman is involved, any amount of manipulation is possible. An auction situation, ideally, is transparent. Consumers compete in a public venue for the goods. The idea has enormous rational appeal – at least in theory - and the major auction houses, as well as eBay, have promoted it to the hilt

In practice, however, auctions are subject to all sorts of manipulation. For one thing, connoisseurship has been replaced by salesmanship. Those luscious auction catalog entries are designed to make you want to pay as much as possible, not to inform you honestly about the goods. At the end of the day, nothing is guaranteed. It is always “buyer beware.”

Secondly, the success of these giants has skewed what used to be called “Fair Market Value.” The example cited in my last blog entry is classic. Something a dealer might sell for $20,000 sells for $80,000 or more, simply because of WHERE it was sold. An item is likely to bring a higher price at Christies than at Swann’s, hence Christies will attract better goods. The few big auction companies that have established dominance now can be sure to attract only the best material, which will bring ever-greater prices. This has always gone on, but now more than ever before, venue influences value.

This dominance has had another side-effect. Over the past decade, auctioneers have begun raising their “buyer’s premium” - the amount they charge the buyer on top of the selling, or “hammer” price. From 10% it went to 15%, to 20%, and then, shockingly, to 25%. See “Sotheby's profit up 46 pct on auction commissions” at http://www.reuters.com/article/companyNews/idUSWNAS247120080226

The implicit message is that these companies and their stockholders are no longer interested in working with the common round of dealers, collectors and institutions. They are interested only in the very top of the market – those people to whom money is not an issue. It’s a tough, and if you’re not enormously wealthy, a rather nasty business.

And perhaps these were the market forces that persuaded Phillips to cancel the auction of the Diane Arbus photos that Bob Langmuir had discovered. I’m sure Phillips de Pury seemed big enough and bad enough when they pulled the rug out from under Bob last April 8th. But it could be that they were, in reality, caught between two bigger and badder entities – Christies and Sotheby’s.

What’s It REALLY Worth?

I was out on the road for a week and returned to find a very nice article in the Boston Globe about HUBERT’S FREAKS.

http://www.boston.com/ae/books/articles/2008/06/21/a_master
_of_oddball_characters/

The article was brought to my attention by a colleague, who also told me that a copy of Benjamin Franklin’s “Maritime Observations” was coming up for auction at Christies. This is an important item in the history of science and, because of its maritime component, he wanted to let me know about the sale. Essentially Franklin’s treatise documents his discovery, in 1785, of what we now know as the Gulf Stream. The pamphlet was estimated to sell at $15,000-25,000. I guessed it would sell at around $35,000. In fact, it went for $80,500 with the auctioneer’s 20% premium.

Tracking the blatant “rich getting richer” course of the Bush economy, the escalation of high-end material has taken over every area of the high art world, including rare books. The rarest of the rare sells for increasingly grand sums. Everything else founders or sinks. Perhaps the strongest example of this at the Christies sale was tragic genius Alan Turing’s 1936 paper “On Computable Numbers.” This early and important item had a well-established value of about $20,000. However, the copy at this Christies sale brought $182,500, including the premium.

This highlights another aspect of today’s weird market. More than ever before, the sales venue has a significant impact on the selling price of an item. Turing’s paper might sell for $20,000 at Bloomsbury or Swann, and $180,000 at Christies. So what is it really “worth?” Has value become a function of venue?

Inevitably all this takes me back to the cancelled Phillips sale last April 8th. It’s getting on three months and the mystery buyer announced by Phillips has yet to emerge. I can’t help but wonder if the people at Phillips misjudged the current market, only to realize their mistake at the last moment. Auction results over the past decade have demonstrated that, for all of Arbus’s work, it is only the icons that bring strong sales numbers. Results over the past few years make it clear that Christies and Sothebys are where the real money gets made. Did Phillips think they could buck this trend with Bob Langmuir’s collection of funky, fascinating, but off-brand Arbus material?

In HUBERT’S FREAKS Steve Turner counsels Bob Langmuir not to over-pitch his goods, to let the buyer “sell it to himself.” At this remove it looks more and more as if Steve Turner took his own advice when he was trying to find a taker for the Hubert’s archive. Charlie Scheips and Joseph Kraeutler, the photography experts at Phillips, sold it to themselves.