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|  | MAY 11, 2004
By Thane Peterson The Art Market by Numbers One Picasso is worth $104 million, but others go for thousands. Why? For would-be collectors with a modest budget, a few answers Who on earth would pay a record $104 million for a painting? We're unlikely to find out anytime soon because Boy with a Pipe (The Young Apprentice), a 1905 work painted by Pablo Picasso when he was just 24, was purchased by an anonymous buyer on May 5. The actual bidding was done by Warren P. Weitman Jr., chairman of Sotheby's North America, who was on the auction-house floor taking instructions from the collector via cell phone. As usual, the auction house won't say who was on the other end. The rumor mill began churning anyway. Names bandied about as the possible buyer included Microsoft (MSFT ) co-founder Paul Allen, New York financier Henry Kravis, and Las Vegas casino owner Steve Wynn. For me, the sale raised a number of issues more intriguing than who bought the painting. Here are some of them and their answers: Why was this painting worth so much? The valuation of art is mysterious. Rarity is a factor: Boy with a Pipe is considered one of the three most important works from Picasso's Rose period, and the other two are in museums. Provenance is also key: The painting came from the collection of John Hay and Betsey Whitney, who were among the greatest collectors of the last century. However, since trophy paintings usually end up hanging in the living rooms of a wealthy collectors, a lot has to do with the way they look on the wall. Boy with a Pipe has what's known as "wall power," says Kelly Devine Thomas, a writer with ARTnews magazine. The subject matter is "poetic and lyrical," she notes, and the colors are striking.
Many scholars consider Picasso's difficult but groundbreaking Cubist paintings to be more important, but they're harder for people with little knowledge of art -- such as dinner-party guests -- to appreciate. As Miami hotelier Donald Rubell, a major collector of contemporary art, notes dryly: "Rich people tend to like pretty paintings." Could the buyer have been a museum? It's unlikely. Donations to museums are usually earmarked for specific purposes, and the annual unrestricted-acquisitions budget of most museums would cover only a tiny fraction of the price. Perhaps the only museum with the cash to easily swallow such a purchase on its own is The Getty in Los Angeles. Nevertheless, Boy with a Pipe will probably end up being donated to a museum one day. Will more paintings sell for $100 million-plus? Almost certainly. There is tremendous wealth concentrated in the hands of the richest Americans (who are the heaviest buyers right now), and few iconic works of impressionist and modern art remain in private hands. "We're probably going to see a lot more of these sales over the next few years," predicts New York gallery owner Ronald Feldman. "It's a matter of supply and demand. These works are disappearing [from the market], and everybody knows it." Among the painters whose work is likely to top the $100 million mark: van Gogh and Picasso. Whatever happened to The Portrait of Dr. Gachet? Until May 5, the record price for a painting sold at auction was $82.5 million, for Vincent van Gogh's The Portrait of Dr. Gachet. Van Gogh did the painting shortly before he committed suicide. It was purchased in 1990 by a Japanese financier who immediately locked it away in a bank vault. It's rumored to have gone up for sale in the mid-1990s, but no one I talked with knows who (if anyone) bought it. "I don't believe it's in Japan anymore," says Michael Findlay, a director at New York's Acquavella Galleries and a former Christie's honcho. Can anyone buy a Picasso? Pretty much. You probably can't afford a painting, sculpture, or drawing unless you're wealthy. But the 2004 edition of Artprice Annual, a hefty tome with information on most of the significant artwork sold worldwide last year at auction, lists hundreds of Picasso lithographs and etchings that sold in the $1,000 to $10,000 range. The work won't be unique -- usually it will be one in a series of 50 -- and probably won't rise a lot in value. It won't even be signed unless you pay at the high end of that range. However, just about anyone with a credit card can afford a minor-league Picasso. Just start tracking sales at the big auction houses via their Web sites -- www.sothebys.com and www.christies.com. Or check out a smaller house such as Swann Galleries Auctioneers, which specializes in works on paper. Who is today's Picasso? No living artist combines the genius, fame, productivity, and (so far, at least) longevity of Picasso, who died in 1973, at the age of 92. "If Andy Warhol had lived a little longer, he would be the one," says Joanne Heyler, director and chief curator at the Los Angeles-based Broad Art Foundation, which buys contemporary art and lends it to museums. Warhol was only 58 when he died in 1987. Who are the top current pretenders? Kelly Devine Thomas has just published an article titled "The 10 Most Expensive Living Artists" in the May issue of ARTnews magazine. Unless you're really interested in art, chances are you've never heard of half of them, though works by each of them have sold for $5 million or more. All are men, and all but two are American. Here they are in alphabetical order: Britain's Lucian Freud, 81, Jasper Johns, 73, Jeff Koons, 48, Brice Marden, 65, Bruce Nauman, 62, Robert Rauschenberg, 78, Germany's Gerhard Richter, 72, Richard Serra, 63, Frank Stella, who turns 68 on May 12, and Cy Twombly, 76. According to Rubell, the "sleeper" in this list right now is Robert Rauschenberg. Paintings by him from the 1970s and '80s are underpriced, Rubell says, sometimes selling for $20,000 or so. "You won't get a great Rauschenberg for that price, but you can get a good one," Rubell advises. Is there a Picasso of the future? Picasso was not only hugely important in artistic terms but he was also widely known to the general public, lived a flamboyant life, and remained controversial into his old age, all of which added to the value of his work. Among mid-career artists today, here are the ones collectors and curators tend to mention with some of the same qualities: Koons, who was married to an Italian porn star and is famous for his giant outdoor floral puppy dogs and the delicate ceramic sculpture he did of Michael Jackson cuddling his chimp, Bubbles. Damien Hirst, 38, the British artist who first made a splash by pickling sharks and sheep in formaldehyde. And Matthew Barney, 37, an American whose significant other is the rock singer Bjork and who makes films and elaborate installations. The Broad Foundation is a major collector of both Hirst and Koons. However, most of us can't afford their work, which ranges from tens of thousands of dollars on up. And these days, wealthy collectors often glom onto promising young American and European artists right out of art school, driving up their prices. What kind of art should someone with a modest budget buy? For his personal collection, Findlay of Aquavella Galleries collects the work of politically radical expatriated Asian artists. He thinks the emergence of China as an economic power and the inevitable cultural confrontation between East and West means these artist will be at the cutting edge for years to come. "Buy what you like, and don't worry about what it's worth," he says. That's what major collectors usually do. It's just that there are a lot more zeros on the checks they write.  Peterson is a contributing editor at BusinessWeek Online. Follow his weekly Moveable Feast column, only on BusinessWeek Online Edited by Patricia O'Connell
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