Frieze New York, 2013. Photo Naho Kubota.
Photo: Courtesy Naho Kubota and Frieze.

The art world can’t live with art fairs. The art world can’t live without art fairs.

That was the resounding takeaway of experts at a 90-minute panel at Sotheby’s Institute on Tuesday night entitled “Art Fairs: An Irresistible Force in the Art World?” Dealers Ed Winkleman and Elizabeth Dee, who each founded their own fairs, along with art law specialists Richard Lehun and Nicholas O’ Donnell, parsed both the explosive growth and pervasiveness of fairs, as well as the complex ethical and business issues they raise for dealers, artists, and collectors alike. Judith Prowda, an author, attorney and Sotheby’s Institute faculty member mediated the talk.

Gallerist Elizabeth Dee, who founded the well-received Independent art fair, presented a very telling number. She said her annual budget for participating in art fairs now hovers around $250,000 compared with a range of $25,000–$35,000 a decade ago.

Winkleman traced the rise of the art fair from three main events in 1970 (in Cologne, Basel, and Brussels) to a recent report showing that in 2005, there were 68 fairs, and by 2011 there were 189. By his own count however, Winkleman says he has tallied up about 220 current contemporary art fairs around the world.

He described the 2002 introduction of the NADA art fair in Miami as a turning point for smaller galleries. Back when satellite fairs were nascent and far less expensive, he said, galleries sold their booths out once, twice, or three times over, and made more at a fair than in six months selling out of their gallery. “Notions about what an art fair could be and who was qualified to organize one,” shifted rapidly and “demand just exploded,” in terms of galleries applying to satellite fairs.

“Where are the big collectors? You have to bring them here.”

During the financial crisis and recession of 2008, Winkleman said, one would have expected the number of art fairs to start dwindling but the polar opposite happened, as more and more galleries looked to these as a haven of sorts amid the sluggish business environment. This coincided with “a shift in perception about who was responsible for getting people to the fairs.” Galleries asked fair organizers: “Where are the big collectors? You have to bring them here.” In response, fairs broadened their VIP programs and of course in the process, obtained the lists of their participating galleries’ VIPs. “That shifted a huge amount of power to the fairs,” Winkleman noted. He described the dominance of fairs as systematically starting to train collectors: “This is where I purchase art. Why am I spending time in the various galleries, when the newest and the very best is at the art fair?” This in turn put pressure on dealers and artists to show only new work at each fair, for fear that showing something at consecutive fairs, or work previously on view in a gallery, might be less-than-fresh or desirable.

Dee said it was “critical to talk about the dynamic of fairs vis à vis those that were founded and run by galleries and those that have become more institutional private enterprises.” Dee said that with a more corporate culture of art fair management, galleries have lost certain benefits they once enjoyed. Further noting the rising costs of fairs, Dee said there is less room for dealers to take risks with new artists and projects and says content has suffered as a result. While acknowledging that fair organizers “clearly have to make a profit as a sound business,” she asks, “to what degree?”

Attorney Richard Lehun talked about the fact that fairs tend to further complicate relationships that have always been fraught with idiosyncrasies. While praising the ease and efficiency of a fair, especially as it lets collectors “comparison shop,” he says they also have the power to erode relationships. They replace quiet discussions in the gallery while encouraging a herd mentality and the kind of impulse buying that can undercut more solid, long-term relationships between dealers and collectors. “The art fair piggybacks on the relationship while needing to undermine it, in fact,” he said.

Lehun also discussed how fairs can affect the fiduciary relationship between dealers and their artists. “Loyalty pre-art fair could mean a vast spectrum of different responsibilities,” he said. “Post-fair could mean little more than more art fairs.”

Attorney Nicholas O’Donnell explored real and hypothetical buying scenarios at various fairs that illustrated the wide range of issues to consider–such as the location of the fair and what laws govern transactions (i.e., New York law at Frieze New York, Dutch law at Maastricht, German law in Cologne) as well as explicit and implied terms of a contract, and the exchange of information between a dealer and a client. He mimicked: “Did you say ‘signed Picasso’ ‘signed by Picasso’ or ‘by Picasso’?”