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The Art Industry and U.S. Policies that Undermine Sanctions/Section 2D

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​D. Art Dealers, Art Galleries, and Art Fairs

Auction houses are not the exclusive means by which collectors purchase high-value works of art. Buyers also rely on art dealers to build their collections ​through private sales.[1] In 2019, aggregate dealer sales accounted for 58 percent of the art market by value, in contrast with auction sales, which claimed only 42 percent.[2] In private sales, art dealers serve as a liaison between artists or current owners and potential purchasers.[3] In this role, and in exchange for a percentage of each artwork sold, dealers often "manage an artist's sales, network with collectors and curators, and seek to ensure the longevity of an artist's career by mounting exhibitions" on behalf of their artists.[4]

Traditionally, art dealers conduct private sales through art galleries.[5] In 2019 for example, 50 percent of dealer sales were made in galleries; the remaining 50 percent were divided between art fairs (45 percent) and online purchases (5 percent).[6] Galleries represent artists through promotional activities, hosting exhibitions, and ultimately selling their work.[7] Primary market dealers sell works by living artists while secondary-market dealers re-sell works "on behalf of collectors, institutions, and estates."[8] Because auction houses tend to focus on the secondary market, galleries execute many first-time sales and as a result play an influential role in determining the value of individual pieces.[9]

Nevertheless, the historical dominance of art galleries has declined with the increasing popularity of art fairs. Unlike the traditional gallery, which operates from a fixed location, art fairs allow for collaboration between dealers and gallery owners who come together for a limited time to show a wide range of pieces at different price points.[10] Art fairs provide valuable networking opportunities, increased exposure for artists, and a bolstered image for host cities, which benefit ​from increased tourism.[11] Fairs also expose current collectors to many different galleries and artists in one location, therefore avoiding the inconvenience of traveling between different locations.[12] The 2019 Art Basel Miami Beach art fair, for example, hosted 269 galleries from 33 countries in the Miami Beach Convention Center.[13]

  1. ↑ Art Basel & UBS, The Art Market 2018 30 (2018), https://www.artbasel.com/about/initiatives/the-art-market.
  2. ↑ Art Basel & UBS, The Art Market 2020 32 (2020), https://d2u3kfwd92fzu7.cloudfront.net/The_Art_Market_2020-1.pdf.
  3. ↑ Amy Zipkin, A Lifetime of Making Art, but New to Selling It Online, N. Y. Times (Feb. 9, 2018), https://www.nytimes.com/2018/02/09/business/lifetime-making-art-new-to-selling-online.html.
  4. ↑ Zoe Goetzmann, These Artists Jump-Started Their Careers by Selling Directly to Collectors on Instagram, Artsy (Nov. 26, 2018), https://www.artsy.net/article/artsy-editorial-artists-jump-started-careers-selling-directly-collectors-instagram.
  5. ↑ Art Basel & UBS The Art Market 2018 178 (2018), https://www.artbasel.com/about/initiatives/the-art-market.
  6. ↑ Art Basel & UBS The Art Market 2020 193 (2020), https://d2u3kfwd92fzu7.cloudfront.net/The_Art_Market_2020-1.pdf.
  7. ↑ Anna Louie Sussman, How Galleries Support Their Artists, Artsy (Apr. 18, 2017), https://www.artsy.net/article/artsy-editorial-galleries-support-artists.
  8. ↑ Art Dealers Association of America, Collector's Guide 15 (45th ed. 2007), https://web.archive.org/web/20131008045449/http://www.artdealers.org/dnloads/adaa_guide.pdf.
  9. ↑ Allison Schrager, High-end art is one of the most manipulated markets in the world, Quartz (Jul. 11, 2013), https://qz.com/103091/high-end-art-is-one-of-the-most-manipulated-markets-in-the-world/.
  10. ↑ Art Basel & UBS The Art Market 2018 190-191 (2018), https://www.artbasel.com/about/initiatives/the-art-market.
  11. ↑ Y-Jean Mun-Delsalle, The Art Fair Boom Is Forever Changing the Way the Art Market Does Business, Forbes (Apr. 7, 2016), https://www.forbes.com/sites/yjeanmundelsalle/2016/04/07/the-art-fair-boom-is-forever-changing-the-way-the-art-market-does-business/#3589bb5d6c64.
  12. ↑ James Tarmy, Art Fairs Are Popping Up Everywhere. Do They Make Any Money?, Bloomberg (Mar. 6, 2018), https://www.bloomberg.com/news/articles/2018-03-06/art-fairs-are-popping-up-everywhere-who-profits.
  13. ↑ Annie Armstrong, Art Basel Miami Beach Will Feature 269 Exhibitors in December, Art News (Sept. 11, 2019), https://www.artnews.com/art-news/news/art-basel-miami-exhibitor-list-13211/.
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