David Zwirner Proposes an Art-Fair ‘Tax’ on Top Galleries—But Art Basel’s Marc Spiegler Has Other Ideas

The debate spilled out from the New York Times Art Leaders Network conference in Berlin, generating discussion among dealers worldwide.

The 2018 New York Times Art Leaders Network in Berlin. Courtesy The New York Times.

Art fairs—the sheer number of them, their centrality to the market, and their onerously high costs—were a hot-button issue in Berlin this week at the New York Times‘s Art Leaders Network conference, where some of the industry’s most prominent figures came together from the auction, museum, fair, and gallery worlds.

On the first day of the conference this past Wednesday, the mega-gallerist David Zwirner ended his section with a radical statement: he suggested that top galleries like his should pay higher prices to subsidize smaller galleries’ booths at art fairs. From his seat on the stage, Zwirner pitched the idea to Marc Glimcher, president and CEO of Pace Gallery, who was sitting in the audience and shot back, “Let’s do it!”

“That makes two!” said Zwirner. The audience broke out in applause.

Zwirner admitted that he did not know or care what an art fair booth costs these days, which served to underline the wide gulf between the largest players and smaller galleries at major art fairs.

Thaddaeus Ropac, who was also a speaker at the event, told artnet News that he agrees with Zwirner. The blue-chip Paris-based dealer said he would also be willing to pay more to help subsidize spaces at fairs for smaller galleries. He adds that that is important to take a holistic view of the art market. 

Others agreed that action is needed, but precisely what form it should take was still open for debate. Marc Payot, a partner and vice president of Hauser & Wirth, is also in favor of Zwirner’s proposal. “We support any system that allows the widest range of galleries, from the smaller and younger to the largest and most established, to participate in the fairs,” he told artnet News over email. “The continued health and vibrancy of our art world relies upon visibility and opportunity for as many as possible.”

The New York gallerist José Freire, meanwhile, voiced skepticism about the measures proposed by Zwirner, which in the past he has said would paint smaller galleries as “charity cases,” to ill effect. “it’s terribly sweet, terribly late, terribly misguided, and proof-positive that the art fair model is as badly riddled with failings as the gallery model,” said Freire, who has sworn off doing art fairs entirely.

The 2018 New York Times Art Leaders Network’s program director and culture reporter Robin Pogrebin. Courtesy New York Times.

Crunching the Numbers

Zwirner’s claim hung in the air throughout the following day of discussions between the various leaders, including Marc Spiegler, the global director of the Art Basel fairs.

During a panel the following day, the gallerist Almine Rech-Picasso voiced her support for larger galleries assisting smaller ones, though she pointed out that support already exists in some form of reduced prices in different sections of fairs.

The topic came up again in what was perhaps the most captivating panel of the two-day roster, a conversation about the “art-fair-industrial complex” between Spiegler, Independent Collectors founder Christian Kaspar Schwarm, and the New York-based gallerist Elizabeth Dee, who is also the co-founder of the galleries-run Independent art fairs.

Dee said she had already begun crunching her numbers to see if subsidizing fair costs for the lower tier of galleries at Independent was even sustainable.

When Spiegler was asked if he would seriously consider Zwirner’s idea, he seemed dubious about how practical it actually was.

“We have no issue with the idea of trying to work more closely in terms of helping the younger galleries at the fair,” he said at the conference, “but the way to do that, the algorithm for figuring out how to do this, is difficult to reach.”

Dee then shared some “very simple calculations” on how this idea could pan out. If 10 percent of the five or six top galleries at Independent were each asked to pay an extra $10,000 for their stand, she reasoned, then this would in effect allow for a 12.5 to 14 percent discount for about 40 percent of the stands. For these galleries, it’s “a drop in the bucket,” said Dee.

Independent New York, showing the booth of Perrotin, Paris/New York. Photo: Henri Neuendorf.

Independent New York, showing the booth of Perrotin, Paris/New York. Photo: Henri Neuendorf.

The Truth Is That Life’s Complicated

Speaking to artnet News after the conference, Spiegler explained that, from his perspective, the problem is more complicated than the cost of booths or “which galleries are making the most at a fair,” and requires alternative strategies to help smaller galleries beyond working out a form of taxation.

“It’s not sufficient to have a little bit more of an increase [in booth prices], which is what David said,” Spiegler maintained. “That’s not going to have an impact across the whole fair. When we talk about how we can make things better for galleries, it’s not just in the context of the fair but in general. And it’s not just about the square meters.”

Spiegler suggests other ways to help sustain the gallery ecosystem that are standard practice in other industries, like the transfer fees that exist between soccer teams when a player moves onto another league. Often, when an artist switches from a smaller gallery to a larger one, the smaller gallery that “groomed” them receives no benefit. “There are very rarely contractual arrangements between galleries and their artists that would govern this kind of thing,” he noted.

A Lending Hand 

Spiegler told us that since the Berlin conference he and the Berlin and London-based gallerist Johann König had been discussing the possibilities of micro-financing loans for smaller galleries.

“The real issue for galleries now is cashflow because galleries that have a lot of successful artists often have the problem that they are funding a lot of museum and biennial shows, and production,” Spiegler said. “And yet clients often pay very slowly, and banks are often unwilling to give small business loans the way they would in more traditional business like real estate or gastronomy. It would be great if the more successful galleries would be willing to co-sign loans for the younger galleries.”

Art Basel director Marc Spiegler. Photo courtesy of Art Basel.

Former Art Basel head of communications Maike Cruise, who is now the director of Art Berlin Fair and Berlin’s Gallery Weekend  (which begins today), revealed that a similar conversation has been going on for some years now between her and the big galleries she works with. They have been batting around the idea of creating a centralized “fund” to support younger galleries.

“We welcome the fact that David Zwirner initiated this discussion,” she told artnet News. “It would be equally interesting if the cities and auction houses that benefit from the work of young galleries would be involved in such discussions. The only difficulty we haven’t solved yet is the algorithm of how to give this back to the galleries.”

Spiegler also cited the importance of auction houses contributing to systemic assistance, considering how they benefit greatly from the work small galleries do to support artists’ careers, and are dependent upon a heathy gallery ecosystem.

Support Fund 

Speaking to artnet News, König said that Zwirner’s idea sounds great but thinks that generating support is not as simple as taxing bigger galleries to help smaller ones. “It’s not practical—where do you make the cutoff?” he asked.

“There are some younger galleries that are still premature in their profit-making abilities, and there are other galleries that are older but, because they work differently, are also not in a profit zone. So what is a young gallery and what is a profitable one?” says König. “Top-end galleries understand the system and they have a feeling for what’s possible marketwise, so it could be good to start a small support fund where bigger galleries pool cash for younger galleries, or in the form of co-signing loans that younger galleries could apply for.”

Spiegler adds that determining which galleries are thriving and which ones are struggling is not a matter of what happens in the short period of a fair, but that one must also factor in what happens in the entire year around the fairs. It’s about local issues, economic issues, changes in collector bases, he says.

The Art Basel team has been studying different ideas, Spiegler said. “To do this in the right way would entail an exercise that has the complexity of putting together a new tax code,” he said. “It’s not enough to look at which galleries making the most at the fairs.”

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