The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art
Why would a smart New York investment banker pay $12 million for the decaying, stuffed carcass of a shark? By what alchemy does Jackson Pollock’s drip painting No. 5, 1948 sell for $140 million?
Intriguing and entertaining, The $12 Million Stuffed Shark is a Freakonomics approach to the economics and psychology of the contemporary art world. Why were record prices achieved at auction for works by 131 contemporary artists in 2006 alone, with astonishing new heights reached in 2007? Don Thompson explores the money, lust, and self-aggrandizement of the art world in an attempt to determine what makes a particular work valuable while others are ignored.
This book is the first to look at the economics and the marketing strategies that enable the modern art market to generate such astronomical prices. Drawing on interviews with both past and present executives of auction houses and art dealerships, artists, and the buyers who move the market, Thompson launches the reader on a journey of discovery through the peculiar world of modern art. Surprising, passionate, gossipy, revelatory, The $12 Million Stuffed Shark reveals a great deal that even experienced auction purchasers do not know.
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Editorial Reviews
Review
"Don Thompson has written, by far, the best book on the economics of the contemporary art market yet written."--Felix Salmon, Portfolio.com "Don Thompson provides the single best guide to both the anthropology and the economics of contemporary art markets. This book is fun and fascinating on just about every page.” --Tyler Cowen, New York Sun
"If you read no other book about art in your life, read the one that’s gripped me like a thriller for the past two days…it’s called the $12 Million Stuffed Shark.” --Richard Morrison, The Times (London)
"…it’s lucid, well researched and, while carefully balanced, manages to retain a sharp edge ." --Telegraph UK
"A new book by an economist named Don Thompson entitled $12 Million Stuffed Shark: The Curious Economics of Contemporary Art ought to be required reading for collectors intending to wade into well publicized contemporary art auctions…" --The Economist.com
"[An] informative an occasionally hilarious look at the surreal contemporary art market... A clear-headed approach to a frequently high-pitched issue." --Kirkus
About the Author
Don Thompson teaches marketing and economics in the MBA program at the Schulich School of Business at York University in Toronto. He has taught at the London School of Economics and at Harvard Business School. He lives in London and Toronto.
Excerpt. © Reprinted by permission. All rights reserved.
January 13, 2005, New York
One problem for the agent trying to sell the stuffed shark was the $12 million asking price for this work of contemporary art.* Another was that it weighed just over two tons, and was not going to be easy to carry home. The taxidermy fifteen-foot tiger shark “sculpture” was mounted in a giant glass vitrine and creatively named The Physical Impossibility of Death in the Mind of Someone Living. It is illustrated in the center portion of the book. The shark had been caught in 1991 in Australia, and prepared and mounted in England by technicians working under the direction of British artist Damien Hirst.
Another concern was that while the shark was certainly a novel artistic concept, many in the art world were uncertain whether it qualified as art. The question was important because $12 million represented more money than had ever been paid for a work by a living artist, other than Jasper Johns – more than for a Gerhard Richter, a Robert Rauschenberg, or a Lucian Freud.
Why would anyone even consider paying this much money for the shark? Part of the answer is that in the world of contemporary art, branding can substitute for critical judgment, and lots of branding was involved here. The seller was Charles Saatchi, an advertising magnate and famous art collector, who fourteen years earlier had commissioned Hirst to produce the work for £50,000. At the time that sum was considered so ridiculous that The Sun heralded the transaction with the headline “50,000 For Fish Without Chips.” Hirst intended the figure to be an “outrageous” price, set as much for the publicity it would attract as for the monetary return.
The agent selling the shark was New York-based Larry Gagosian, the world’s most famous art dealer. One buyer known to be actively pursuing the shark was Sir Nicholas Serota, director of London’s Tate Modern museum, who had a very constrained budget to work with. Four collectors with much greater financial means had shown moderate interest. The most promising was American Steve Cohen, a very rich Connecticut hedge fund executive. Hirst, Saatchi, Gagosian, Tate, Serota, and Cohen represented more art world branding than is almost ever found in one place. Saatchi’s ownership and display of the shark had become a symbol for newspaper writers of the shock art being produced by the group known as the Young British Artists, the yBas. Put the branding and the publicity together and the shark must be art, and the price must not be unreasonable.
There was another concern, serious enough that with any other purchase it might have deterred buyers. The shark had deteriorated dramatically since it was first unveiled at Saatchi’s private gallery in London in 1992. Because the techniques used to preserve it had been inadequate, the original had decomposed until its skin became heavily wrinkled and turned a pale green, a fin had fallen off, and the formaldehyde solution in the tank had turned murky. The intended illusion had been of a tiger shark swimming toward the viewer through the white space of the gallery, hunting for dinner. The illusion now was described as entering Norman Bates’ fruit cellar and finding Mother embalmed in her chair. Curators at the Saatchi Gallery tried adding bleach to the formaldehyde, but this only hastened the decay. In 1993 the curators gave up and had the shark skinned. The skin was then stretched over a weighted fiberglass mold. The shark was still greenish, still wrinkled.
Damien Hirst had not actually caught the now-decaying shark. Instead he made “Shark Wanted” telephone calls to post offices on the Australian coast, which put up posters giving his London number. He paid £6,000 for the shark: £4,000 to catch it and £2,000 to pack it in ice and ship it to London. There was the question of whether Hirst could replace this rotting shark simply by purchasing and stuffing a new one. Many art historians would argue that if refurbished or replaced, the shark became a different artwork. If you overpainted a Renoir, it would not be the same work. But if the shark was a conceptual piece, would catching an equally fierce shark and replacing the original using the same name be acceptable? Dealer Larry Gagosian drew a weak analogy to American installation artist Dan Flavin, who works with fluorescent light tubes. If a tube on a Flavin sculpture burns out, you replace it. Charles Saatchi, when asked if refurbishing the shark would rob it of its meaning as art, responded “Completely.” So what is more important–the original artwork or the artist’s intention?
Nicolas Serota offered Gagosian $2 million on behalf of Tate Modern, but it was turned down. Gagosian continued his sales calls. When alerted that Saatchi intended to sell soon, Cohen agreed to buy.
Hirst, Saatchi, and Gagosian are profiled later in the book. But who is Steve Cohen? Who pays $12 million for a decaying shark? Cohen is an example of the financial-sector buyer who drives the market in high-end contemporary art. He is the owner of SAC. Capital Advisors, LLC in Greenwich, Connecticut, and is considered a genius. He manages $11 billion in assets and is said to earn $500 million a year. He displays his trophy art in a 32,000 square foot mansion in Greenwich, a 6,000 square foot pied-à-terre in Manhattan, and a 19,000 square foot bungalow in Delray Beach, Florida. In 2007 he purchased a ten bedroom, two acre estate in East Hampton, New York.
To put the $12 million price tag in context it is necessary to understand how rich really rich is. Assume Mr Cohen has a net worth of $4 billion to go with an annual income of $500 million before tax. At a 10 percent rate of return – far less than he actually earns on the assets he manages – his total income is just over $16 million a week, or $90,000 an hour. The shark cost him five days’ income.
Some journalists later expressed doubt whether the selling price for Physical Impossibility actually was $12 million. Several New York media reported that the only other firm offer aside from that made by Tate Modern came from Cohen, and the actual selling price was $8 million. New York Magazine reported $13 million. But the $12 million figure was the most widely cited, it produced extensive publicity, and the parties agreed not to discuss the amount. At any of these numbers, the sale greatly increased the value of the other Hirst work in the Saatchi collection.
Cohen was not sure what to do with the shark; it remained stored in England. He said he might donate it to the Museum of Modern Art (MoMA) in New York – which might have led to his being offered a position on the MoMA board. The art world heralded the purchase as a victory for MoMA over London’s Tate Modern. London’s Guardian newspaper bemoaned the sale to an American, saying: “The acquisition will confirm MoMA’s dominance as the leading gallery of modern art in the world.”
* * *
I began the journey of discovery that became this book at the Royal Academy of Arts in London where on October 5, 2006, along with six hundred others, I attended a private preview of USA Today, an exhibition curated by the same Charles Saatchi. This was billed as an exhibition of art by thirty-seven talented young American artists. Many were not in fact American-born, though they were working in New York – an illustration of how hard it is to label an artist.
The Royal Academy is a major British public gallery. Founded in 1768, it promotes its exhibitions as comparable to those at the National Gallery, the two Tate galleries, and leading museums outside the United Kingdom. The USA Today show was not a commercial art fair, because nothing was listed as for sale. Nor was it a traditional museum show, because one man, Charles Saatchi, owned all the work. He chose what was shown. The work would appreciate in value from being shown in such a prestigious public space, and all profit from future sales would accrue to Saatchi.
Saatchi is neither a professional curator nor museum official. Over a four-decade career he has been both the most talked-about advertising executive of his generation, and later the most talked-about art collector. He is wildly successful in reselling art he has collected at a profit, Damien Hirst’s shark being but one example.
There was criticism of Saatchi both for using the Royal Academy to advance the value of his own art, and because some considered the work decadent or pornographic. The artists present at the opening had no illusions about the nature of the event. One called the Royal Academy the “temporary home of the Saatchi Gallery.” Another said it was good to see his art on the wall because it might not be displayed again until it was offered at auction.
Extensive promotion of the show produced huge press coverage. It was hyped pre-opening by every major newspaper in London, by the New York Times, the Wall Street Journal, and a dozen other major U.S. papers. Billed as an exhibition of shocking work, the show included a battle scene involving rats, and an image of a girl performing a sex act on a man.
The theme of USA Today was billed as disillusionment with contemporary America. Critics and curators at the private opening had diverging opinions of the theme and the work. Some questioned whether the artists could properly be described as disillusioned, or even talented. Norman Rosenthal, the Royal Academy’s exhibitions secretary, said the work “introduces a sense of political edge and anger mixed with nostalgia; this is an exhibition for our times.” Critic Brian Sewell said: “At least Sensation [Saatchi’s previous exhibition] made me feel nauseous. This made me feel nothing.” Ivor Abrahams, a sculptor who sits on the RA exhibitions committee, added: “It’s schoolboy smut and a cynical ploy to get Saatchi even mo...
Customer Reviews
The $12 Million Stuffed Shark
If you want to learn about the behind the scenes operations of the art market this is one of the better books to read. It was recommended to me by an art gallery director who knows first-hand about the business of buying and selling art. Entertaining and eye-opening.
Amazing read
If you're interested in the workings contemporary art market, this is the book to get. The economics behind the market is well explained yet simple and easy to read.
A very fascinating and intelligent engagement
Aesthetics as a set of principles and branch of philosophy, deals with questions concerning beauty and artistic experiences. As far as our general understanding of it is concerned it is a highly nebulous field, subjected to tremendous degree of misinterpretation; particularly in the field of abstract, modern or conceptual art. In any field of humanities where the field is less accurately known, and its principles have not been precisely formulated, the more authoritarian the field becomes, where its rules are easily manipulated by those who can. In the field of visual arts, with no exact fundamentals precisely developed, the techniques and approaches are wide open for the artists to imagine, explore in creating their art.
What I was trained to do as an artist when I was in art school myself and what I learned through experience and independent studies in polishing my skills and artistic expressions by which to communicate my aesthetic concepts in producing my art, were two entirely different fields. Art being the highest form of communication, its goal is to create effects along the spectrum of beauty and ugliness of life for the greater good, and in every instance, it communicates a message; a message emanating through the power of the artist's imagination appealing to our intellect and emotions.
As the true nature of an artist continually inspires him to operate in the future and seek changes and improvements in the current state of existence, his art is to soothe our mind and transcend us from our agonies into a culture where it gives Man a splendor of peace and joy to rise to. This is in total contradiction to the "Shock and Awe" concept demonstrated in some of the conceptual arts we observe in the world at the expense of good and effective visual communication.
Thus, treating art as a commodity, artificially branding it and manipulating its market with high level of speculation for nothing other than personal gains and social status - as Don Thompson presents in his "$12 Million Stuffed Shark" is a "kidnaping" of art from its true field into a manipulated commodity territory where its true purpose is badly corrupted at the expense of the aesthetics field and the culture, which it is intrinsically designed to improve by raising its consciousness.
"The $12 Million Dollar Stuffed Shark" is unlike any other book about the art market. It is in essence a well researched, unbiased and documented text book. I was attracted to read it mainly due to the credentials of the author, Don Thompson, believing that it will be a very refreshingly worthwhile book to read and I was not disappointed, but rather quite impressed by its boldness and the candor by which it reveals the "insiders" trading rules of the art market that are openly veiled from the "outsiders." It is quite revealing, insightful, entertaining and richly filled with fascinating true incidents that arms the reader, the artist, the art student or the art admirer to make any discussion about art an awe-inspiring and engaging event.
This is a book that should be read and understood by every artist - young and old - as a main curriculum, to richly complement his understanding of himself, his art and his career as an artist to discover some of the unknown and existing rules of the "Game" that he is playing and its effect upon himself without knowing it. The book should - when correctly understood and evaluated, bring about a realization of true self-worth and acknowledgment for the artist and renewal of faith and hope, that "good art" can still reign supreme - a postulate, a self-determined and self-created truth that one IS empowered, by the magic of his own awareness and imagination, create for himself and within his sphere of influence.
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