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Sotheby’s Institute of Art

MA Art Business- Semester One

ART BUSINESS, FINANCE & MANAGEMENT: Organization, Management and Marketing

2,800 words

This must be the first page for your Assignment

Title of Assignment: ART BASEL

___________________________________________ Student Number 00000129127 Word Count 2792 Date for final Submission- 15 February 2016 Remember, do not put your name on this cover sheet or anywhere on your assignment

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ART BASEL

It is hard to give a definition of the concept of art fair, we can define it as the fusion between a

commercial and cultural event, a moment in the calendar of the art sector professionals and amateurs,

which defines a proper lifestyle.

In the art market we can find three main kinds of art fairs: the mega-art fairs, Art Basel, TEFAF, Frieze

and Fiac, that are the most important commercial venue in the global art system, they offer museum

quality artwork and the top VIPs of the art world. Than we will find the middle range art fairs such as

Art Cologne, these are more locally representative and smaller. The Last category are the satellite art

fairs, small art fair which take advantage of the enormous flow of people coming to a city during the

bigger fairs.1

The goal of this essay is the analysis of Art Basel, one of the leading international art fairs, owned and

operated by the company MCH Swiss Exhibition (Basel) Ltd2 and currently directed by the journalist

Marc Spiegler. This fair was founded in 1970 by the art gallerists Ernst Beyeler, Trudi Bruckner and

Balz Hilt of Basel and in just a few year has expanded its business in Miami (in 2002) and in Hong Kong

(in 2013) becoming a proper big brand event. The mission of the fair is to connect the international

galleries and their patrons, as well as being an international appointment for all the actors and

spectators of the art world. The three fair happen in three different moments of the year: March in

Hong Kong, June in Basel and December in Miami. This way the company makes sure to be present

almost permanently in the art calendar and to take advantage of the milder weather. The different

locations of the fair also gives the exhibitors and the visitor the possibility to choose the most practical

venue or the place that attires them more, for business or pleasure. The good geographical position

of an art fair is essential for its success. Art Basel Miami for example has a strategic position for this

market for it is placed at the south border of the USA and permits to attract wealthy New Yorkers, as

1 https://www.artbasel.com/ 2 http://www.mch-group.com/en-US/exhibitions-events.aspx

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well as rich Latino Americans. Besides that, the locations chosen by the fair are a way to have a vigilant

eye on the emerging art markets, the Chinese art for Hong Kong and the Latin American art for Miami.

In addition, we must say that, Art Basel, Art Basel Miami and Art Basel Hong Kong are famous to be

the most international art fairs and for have proportionally to the area where they stand the smallest

concentration of local galleries.

According to an independent survey from Citi Bank (Citi GPS: Global Perspectives & Solutions,

November 2015), VIPs account for 88% of sales. These people are in general gallery owners, high net

worth individuals (HNWI), private collectors, art advisors, museum directors or curators and other art

market professionals.3

The art fair’s most important client is the art gallery. Indeed, the major income source for companies

like the art fairs is the turnover generated by the sales of the booths to the galleries. As the journalist

Georgina Adams (2014, p 112) states in 2013 Art Basel reported over 1.000 applications from galleries

willing to participate for the 2013 edition for only 304 slots available. Every year more than 200

galleries take part to the three art Basel fairs. A committee constituted by members who are dealers

themselves short list and select the suitable applicants. This fact can sometimes have very bad

consequences on the relationship between the dealers. If two dealers represent the same artist and

one is in the committee there is a very high possibility that the one who is a judge will exclude the

other from the fair. A very famous case in which this happened was the case of the gallery Eigen+Art,

a regular exhibitor of the fair since 2000. This gallery was rejected from the show in the 2011 edition

of Art Basel. In this situation, the dealer Gerd Harry Lybke vocally accused of bias the berlin gallerist

part of the selection committee, for rejecting him not for artistic reasons, and made sure that the

artists he represented would not be on view at Basel either. As a result, the following year the gallery

was once more granted access to the show4.

3https://ir.citi.com/mzpR40r75JCZvM1NgwYWtxQOf7RGbCbjkJ8mRO3NvckSaE0leRpv%2BHVYzLw67FfaRizqJnYSlO4%3D p. 35 4 http://www.artinamericamagazine.com/news-features/news/berlin-battle-over-art-basel/

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Another indispensable player of the art fair is the artist. As stated by the two economists Olav Velthus

and Stefano Baia Curioni (2015, p 74) the typical artist present at art Basel is successful, male, alive

and aged around fifty. One-fifth of the artists whom works are on show are usually present during the

fair.

The visitor is also one of the essential ingredients to make a fair. There are three main kinds of visitor

in a fair: the high-end collectors, who are very wealthy collectors, wealthy individuals, who are buyers

of art but not necessarily collectors and the general public, people who love going to art fairs but will

probably not buy any other artwork than works on paper.

Auction houses are not allowed to take part to art fairs, it would not be advantageous for the dealers.

The first days of the fair are the most important days to conclude deals with collectors. Usually

collectors go to fairs during these days to catch the best artworks, while during the weekend most of

the visitors are not buyers. To have a piece of the pie, Auction houses send their specialists with clients

just in this period, to make contact and promote the artworks they are selling. They also usually

organize gala dinners and parties to make sure that they will get in touch and captivate the most

relevant collectors of the moment. This is why in 2013 the global director of Art Basel fair, Marc

Spieger sent an email to the main auction houses to prevent them to do such activities.5 Lately some

auction houses have been starting in some ways their own art fair, Christie’s for instance is sponsoring

the African Art fair 1:54 in London.

To guarantee its success Art Basel has a number of different of partners, this is essential for the

support of cultural events. As we can spot from the website, the global leading sponsor of the Art

Basel is the Swiss bank UBS, then will find 21 other associate partners, like Davidoff, or lounge host

partners, like Ruinart, as well as official partners, like BMW, media partners like the Financial Times

and cultural partners like the Hong Kong Art Centre. All these companies have intelligently understood

the unique opportunity to offer something special to their high net worth individuals clients as well as

5 http://observer.com/2013/12/marc-spiegler-to-auction-houses-hands-off-miami/

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enhancing their cultural and social credentials. UBS, for example takes advantage of the five days of

the fair to recruit new clients and to give a special treatment to its privileged clients. For instance, the

bank usually organizes private parties and fancy dinners and gives the possibility to its cherished

clients to access VIP lounges and other exclusive areas. In this way, the client will be able to rest from

the visit with a drink and start again later his tour of the various booths of the fair. It is possible from

the website to send an application to become partner of the fair and benefit from all these

opportunities.

The purpose of the fair is to provide visitors and exhibitors with a pleasant experience. To explain this

concept Derrick Chong (2010, p. 194), senior lecturer in management at Royal Holloway, quotes Pine

and Gilmore, pioneers of the concept of “Economy of the Experience”. This new economy does not

offer only commodities and goods, but engages the visitor into an emotional, physical and intellectual

way, involving all his senses from the moment they walk into the venue until the end of the event. The

Marketing and Communication Office of Art Basel takes care of the creation of this experience. As

Georgina Adams (2014, p.109) reports, in order to make this experience possible, it is necessary for

the art fair to tune with the profile of the visitors, in particular the VIPs, who are wealthy collectors,

dealers, artists, and all the relevant actors of the art world.

The collector purchasing during a contemporary art fair usually comes from a new money background.

This kind of person is usually an entrepreneur, who made his vast fortune in the last century with

finance, commodities, luxury goods, real estate etc. He does not necessarily have a vast knowledge in

the art field. This kind of people are business people lacking time. For this very reason, the art fair

gives them the unique possibility to have, in only five days, an overall view of the artistic situation of

the moment. They will be able to appreciate different kind of the trendiest art of the moment,

compare various artists, get in touch with the gallerists, go to events and have a taste of the art world

fauna.

Regarding dealers, in general their interest is to create network, promote their business and promote

their art selection and obviously to sell artworks. In order to do so, it is indispensable for them to get

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in touch with high worth collectors, journalists, artists, advisors, curators an all the art professionals.

This is only possible if the fair does an efficient communication. Regarding Art Basel, as well as for the

other art fairs, the press office takes care of this responsibility, by sending press releases, to have a

maximum of articles and create interest, and using tools like the website and social networks to

promote the event online. The VIP and Visitors Services Office has the role of sending via mail to the

VIPs, the paper invitation, the VIP card and VIP program booklet, a list of the possible accommodations

and just to some of them, the catalogue of the fair, they will also have the possibility to access this

information online using a private username and password. Art Basel has a Global VIP representative

and VIP representatives based in Africa, America, Asia, Europe and Middle East. Only internationally

known collectors, directors of renowned museums and their chief curators receive a VIP pass, and the

participating galleries receive a limited number of passes to give them to their clients. The general

information are available to the public in the website or downloading the Art Basel App. The goal of

the fair is to make sure that this people will know they will have a pleasant and easy experience and

buy from the dealers or at least get in touch with them, only in this way the dealer will be satisfied of

their experience and will want to attend to the following edition of the fair.

The relations with the dealers are managed by the Gallery Relations Office, from the moment of their

application until the end of the fair and over. To participate and exhibit at the fair the galleries can

apply online, they can upload the application documents directly on the website and download from

the website the exhibition regulations. The art fair normally sends recruiters to other fairs to invite

personally some of the best galleries to apply for the first time, and sends invitations via email or give

phone calls to the galleries who attended in the past editions.

A crucial way that attracts people to the art fair are the many activities organized during the days of

the event, in particular a VIP and a VVIP program. Through a VIP pass the VIP have access to a number

of exclusive tours and events, including parties, the main opening, the VIP lounges, possibility to join

tours with AXA Art experts admission to most museums.6 VIP cards can be of many different kinds,

6 https://news.artnet.com/market/how-to-get-a-coveted-vip-card-for-art-basel-37163

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and the distinction of them is based on the status and purchasing power of the person. Art Basel Miami

Beach is well known for its VIP program and especially for its parties, a cocktail of tropical climate,

Latin American lustiness, luxury hotels and sometimes drugs.

The art fair is not the only institution taking advantage of this moment of high concentration of people

in the city for this event automatically creates an atmosphere. During these few days galleries organize

openings, auctions houses organize auctions or events and museums put the major exhibitions to

coincide with fair. Luxury brands take advantage of the situation to promote their products. Luxury

goods industry is aware of the fact that to bring a customer into the shop it is necessary to offer them

an ‘’experience’’ which goes beyond just walking in a shop and buy the product.

Another actor that takes advantage from the art fair advantage are the satellite art fair. This smaller

fair give the possibility to smaller galleries to get in touch with the thousands of people who attend

Art Basel. To enhance the visitor’s attendance these fairs usually organize free shuttle services

between the events.7

The impact of the fair on the art world can be different in relation of the single cases. First of all, we

should consider the consequences that they have on the city in which they are organised. An art fair

brings business and a raised profile to the city, for sure the hotels, restaurants, airports and most of

the commercial companies benefits from it. For example, satellite events helped Miami to rebrand as

a cultural center and boost its tourism industry. In 2013, the Pérez Art Museum Miami (PAMM)

opened in Miami putting the city into the word’s cultural map. As Georgina Adams (2014, 110-111)

points out, art fairs are very expensive, to keep their contacts, to create new links with collectors and

art marker actors and to sell, art dealer have to attend to a certain number of art fair per year. Many

of the dealers make a three-quarter of their annual turnover at the fairs. The main art fairs prices for

a booth are usually very high. To give an example, at the Art Basel the price can go over 122.000 $,

depending on the size of the booth. In addition to the price of the booth the dealers have to consider

the travel expenses, accommodation, the shipping costs, the price for entertaining their clients at the

7 http://art-collecting.com/miami_art_fairs.htm

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fair, as well as hidden costs generated by his absence from his gallery. The high price of the art fair is

not a problem for the blue chip galleries such as the White Cube or the Gagosian, but it is most

certainly a problem for the smaller and medium sized galleries. It can be very useful for the emerging

galleries, which have to create themselves a reputation and a network, but at the same time the high

prices could cut their wings.

As well as the gallerists, the artist will also have some advantages taking part to an art fair like Art

Basel: they will gain visibility, prestige and will sell their artworks to the major collectors. On the other

hand the risk is the overproduction of artworks. Georgina Adams (2014, p 114) says that to supply to

fairs and Biennals around the world, artist have responded on two ways: eider producing more, or

introducing the use of multiples: prints, photographs, videos and editions. With the introduction of a

special section dedicated to emerging artists in 1979, Art Basel created the possibility to promote and

build a new generation of successful artists and galleries.

In 2015 new trends have been registered regarding the attendance of galleries and visitor to the art

fairs. Most reported either a decrease, a flat attendance or a modest increase.8 As shown in the table

below the number of attendance of the galleries seems to be related to the number of visitors of the

fair. In particular Art Basel Hong Kong has registered a decrease on both the attendance of the galleries

and visitors. Despite this, it still remains one of the most visited art fairs in the world.9

8 http://www.skatepress.com/art-market-reports/skates-art-fairs-report-summer-2015/

9 http://www.skatepress.com/infographics/how-are-art-fairs-doing-this-year/

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This decrease on the attendance might be caused by the emergence of art online selling platforms.

Indeed, dealers find much easier and of course cheaper to sell online, as well as buyers, who can save

a lot of time and money buying online. It is true that to buy an artwork, especially if the price is very

high, it is necessary to see it, but more and more customers are currently ignoring this detail, deciding

to not take part to art fairs. Despite this, art fairs, especially the main ones still remain the major

appointment of the art calendar, because as explained above they do not only represent the sale of

artworks but give a much deeper experience.

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BIBLIOGRAPHY

Adam G.; Big Bucks: The Explosion of the Art Market in the 21st Century (2014), Fahrnam, Lund Humphries, pp. 101-116 Chong D., Arts Management (2010), Abington, Routledge, p. 194 Velthuis O. and Baia Curioni S., COSMOPOLITAN CANVASES: the globalization of markets for

contemporary art (2015), Oxford, Oxford University Press, p. 60

SITOGRAPHY

artbasel;com (2015) Art Basel Official Website [Online].Available at: https://www.artbasel.com/ (Accessed 14 Feb. 2016) artcollecting.com (2015) Art Collecting Official Website [Online]. Available at: http://art-collecting.com/miami_art_fairs.htm (Accessed 10 Feb. 2016) Citi GPS: Global Perspectives & Solutions (2015) The Globql Art Mrket: Perspecties on current drivers and future trends [Pdf] City GPS, p. 35. Available at: https://ir.citi.com/mzpR40r75JCZvM1NgwYWtxQOf7RGbCbjkJ8mRO3NvckSaE0leRpv%2BHVYzLw67FfaRizqJnYSlO4%3D (Accessed 10 Feb. 2016) Kinsella E. (2014) How to get a Coveted VIP Card for Art Basel [Online] ART NET News; Available at: https://news.artnet.com/market/how-to-get-a-coveted-vip-card-for-art-basel-37163 (Accessed 10 Feb. 2016) SkatesPress.com (2015) Skates Press Offcial Website, Art Fair Report 2015, [Online]. Available at: http://www.skatepress.com/art-market-reports/skates-art-fairs-report-summer-2015/ (Accessed 10 Feb. 2016) The Editors of Art News (2015), How Are Art Fairs Doing This Year? [Online]. Available at : http://www.skatepress.com/infographics/how-are-art-fairs-doing-this-year/ (Accessed 10 Feb. 2016) Zeitz L. (2011) Berlin Battle Over Art Basel. [Online] Art In America. Available at: http://www.artinamericamagazine.com/news-features/news/berlin-battle-over-art-basel/ (Accessed 10 Feb. 2016)