Comedian Adam Conover Says the Art Market Is a Scam. Here’s What He Gets Right—and Wrong.

Is the art market no more than a playground for snobs and crooks? The comedian Adam Conover certainly thinks so. He makes the case in a five-minute video released yesterday as the latest in his web series “Adam Ruins Everything.” The segment, dripping with a Morley Safer-worthy level of contempt for the art world, has already exceeded one million views.

Conover’s thrust is that the art market is hopelessly corrupt, and manipulated by a tiny cabal of oily back-room wheeler-dealers who not only determine the price of art and rig the system to enrich themselves—they also define “what art is.”

Some of Conover’s claims—which echo many complaints lobbed at the art world in recent years—are better-researched than others. A principal problem with the video is that “the art market” is described as a monolith, but most in the art world recognize that “the art market” is in fact a constellation of mini-markets, and that the business of a mom-and-pop shop bears little resemblance to that of an international behemoth like Gagosian. (Likewise, the stock market isn’t only populated by corporate raiders, inside traders, and Apple but also hundreds of millions of striving businesses operating with public investment.) The climactic claim that the corrupt market determines “what art is” also discounts the many practices that aim to wriggle free of capital (see: social practice, performance art, etc.)

But he’s not always wrong. Below, we consider a handful of the creatively coiffed comedian’s claims.

1. Big Galleries Keep Prices Secret So They Can Change Them Depending on Who the Buyer Is.

Businesses in New York—including art galleries—are required by law to “conspicuously display” prices for their goods. In fact, hardly any Gotham galleries do so, though lawmakers have tried to crack down on this. That said, some galleries are open about money and will post, or at least disclose, prices when asked. (Still, many inflate the sticker price by 20 percent and then knock it down to make the buyer feel he or she is getting a deal.)

As for adjusting what they charge for different customers, galleries do offer varying discounts, and some buyers—a museum, say, or a collector like Eli Broad with a reputation for buying an artist’s work long-term and in-depth—are more desirable than others.

Truth quotient: Mostly true.

2. Galleries Discriminate Against Novice Collectors… Like Poor Little Harry Potter.

To make the case that dealers can be less than welcoming to potential buyers who aren’t part of a villainous secret society of art profiteers, Conover chooses the odd example of Daniel Radcliffe, who was once spurned when he sought to buy a work of art, Conover alleges, citing a report in the New York Observer. But Conover didn’t read the whole story. As Radcliffe told the Guardian (and as cited by the Observer), the artist in question, Jim Hodges, intervened and insisted the gallery sell to him. Also, a multimillionaire actor as the little guy? Again, strange choice.

Truth quotient: Mostly bogus.

3. Auction Bidding Is All a Lie, Because Major Auction Houses “Straight-Up Pay People to Bid” and Auctioneers Call Out Fake “Chandelier Bids.”

Yes, top-dollar auction sales have become complicated transactions, and a third party will sometimes privately make a bid on a work of art before the sale. If the work ends up selling above that price, the third party gets a percentage of the upside. (This arrangement is known as a “third-party guarantee.”) But even if it does open up the door to the kind of arcane yet lucrative financial machinations that wealthy financiers specialize in, it’s a bit drier and less “straight-up” than the cartoon nefariousness portrayed in the video.

That said, the practice of “chandelier bidding,” in which an auctioneer calls out fake bids during a live sale, is very much real. As an auctioneer inches closer to the minimum price for which a seller has agreed to part with a work (known as a “reserve”), he may point to invisible eager bidders in the back of the room. It’s all part of an effort to foster drama and conceal the true reserve price, which auction houses say helps the consignor get the best possible outcome.

Both practices have been covered extensively in the New York Times, and a New York State senator once introduced legislation to outlaw chandelier bidding.

Buyers at these high levels are generally familiar with what’s happening—and the fine print at the back of the sales catalogues does acknowledge both these practices. But to a neophyte, such hieroglyphics and theatrics would legitimately seem impenetrable, and maybe a little sketchy.

(Sotheby’s and Christie’s both declined to comment.)

Truth quotient: True at stratospheric price levels, otherwise mostly bogus.

4. Auction Houses Are a Great Place for Crooks to Defraud the Government and Launder Dirty Money.

True, despite auction houses’ best efforts (and they have phalanxes of lawyers trying to keep them out of trouble), some bad actors do buy art with dirty money. The US Department of Justice last year brought a case against Malaysian tycoon Jho Low, alleging that he bought $137 million worth of art at auction, including a Basquiat and a Monet, with funds embezzled from the Malaysian government.

Conover asserts that collectors who donate artworks to museums are bad actors, too—they get a tax write-off for charitable donations, and, crucially, he says they can claim whatever value they want for the artworks on their tax forms. But the IRS isn’t stupid, and has increasingly scrutinized these valuations. Private museums, which offer tax benefits to their owner-donors, have also come under scrutiny.

Truth quotient: Partially correct, partly seriously bogus.

5. You Can Buy Art on the Street That’s Just as Good as What You Could Buy in a Gallery. But Those Artists “Aren’t Allowed to Succeed.”

You can also find gold nuggets in a riverbed, but considering the time it takes to find the right riverbed and learn the techniques for locating the gold, years of your life could have passed by. Galleries are businesses run by specialists whose primary value proposition is that they know who good artists are, have relationships with them, and can cut through the chaff to get the cream of the cream.

Yes, the art world, like many businesses that serve the one percent, runs on nepotism and connections. But these art dealers (and curators) are also constantly on the lookout for undiscovered talent. The clubbiness of the art market is more often the result of laziness or lack of resources than a nefarious pyramid scheme; tastemakers often fall back on their existing networks rather than taking the considerably more difficult path of looking beyond them. That said, true talent is rare, and sometimes takes a long time to be properly recognized, either by museums or the art market. Jean-Michel Basquiat started out as a graffiti writer, and now his works can sell at auction for upward of $110 million. Why wouldn’t dealers create a million art stars from thin air, if they were such skilled manipulators?

Truth quotient: Bogus.

Conclusion

“So the fine art world is all a lie, and it’s all about money, and who gets into this stupid, snobby club,” says Conover’s foil in the video, a bright-eyed-until-disillusioned artist, at the video’s end. Intones Conover, “More or less.”

So, are Conover’s diagnoses on the money?

Sometimes more, sometimes less.