This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
BARRY RITHOLTZ, ANCHOR, BLOOMBERG: This week on the podcast I have a special guest. Her name is Brooke Lampley. She was the former head of impressionist and modern art at Christie’s. She is the incoming Chairperson of Fine Art Sotheby’s and this is a little off the beaten path of Hedge fund managers and economist and traders but it’s no less fascinating if you are at all interested in how artwork is determined to have a specific valuation, how we can tell the providence and whether or not something is real or not, what takes place at auctions and what the future of modern art looks like. I suspect you’ll find this to be a fascinating conversation.
I wish I’d have her for another hour because I have hundreds of more questions I just didn’t get to but with no further ado, my conversation with Sotheby’s, Brooke Lampley.
My special guest today is Brooke Lampley. She is the incoming Vice-Chairman of the Fine Art Department at Sotheby’s, a job she will begin in early 2018. Undergraduate at Harvard and her Masters at Yale, where, in Art History, she did curatorial work at the National Gallery of Art before joining Christie’s in 2004, where she quickly became a rising star in the art market, getting named to Crain’s 40 under 40 lists. Eventually she rose to the position of head of the impressionist and modern art department at Christie’s where she oversaw the sale of more than a billion dollars in Impressionist and Modern Art. Brooke Lampley, welcome to Bloomberg.
BROOKE LAMPLEY, INCOMING VICE CHAIRMAN, FINE ART DEPARTMENT, SOTHEBY’S: Thank you.
RITHOLTZ: So, now is as good time as any to talk about what’s going on in the art world but I have to back up a little bit and get a little bit of background about you. Undergraduate at Harvard, you’re studying Art History. Did you have any idea you wanted to pursue a career selling art?
LAMPLEY: Annoyingly, I did know for a long time that I was interested in art. I was quite a bookish, kind of nerdy kid and I came from an artistic family. My mother was a painter. My aunt is an architect. My other aunt works in fashion. I didn’t have any – more conventional career models. I didn’t have a lawyer, or a doctor, or a banker in my family.
So, when I discovered Art History, it was the perfect fusion of my kind of academic inclination with an artistic interest and I loved it. I loved it in high school and I went to college and I actually did a joint concentration or major in literature and history of art because I didn’t want to solely focus on History of Art because I highly suspected that that was something that I was going to focus on in my life.
So, I enjoyed taking a lot of Comparative Literature classes as well as History of Art classes and I was pretty certain at the end that I was going to apply to Art History graduate school.
RITHOLTZ: So, how do you go from Art History to the big auction houses? That’s an unusual transition.
LAMPLEY: It wasn’t intentional. I started out – I really believed that I wanted to be a curator. I was very academic in my interest. I was reading Artforum every week, reading like really theoretical and out-there stuff about art and that’s what I was really interested in. I was really interested in critical theory. I thought that I was going to spend my life writing quite esoteric observations on art that – a very narrow audience might read. But I went to graduate school really young and I discovered there that I was young and I didn’t have a lot of professional experience and form the career path that I was choosing and I started to get some cold feet about the fact that I was going to be there for a potentially five years accomplishing my PhD before – then having a real work experience.
So, I took a leave of absence to go work at the National Gallery in a Curatorial Department. I was working in the Department of Photographs. And I did that to confirm that I wanted to be a curator. And for better or for worst, it didn’t work out that way. It’s quite – it’s a wonderful institution and the department I was in was doing incredible work. At that time, (Sarah Greno) had just made it an independent department, moved it out of the administration of the Prints Department and they were having their – they had recently endowed independent galleries within the museum so they were having their first full schedule of exhibition programming, so, three temporary exhibitions in the year that I was there.
It was full on but it was also highly administrative and I also – it was the first time that I realized that museum work wasn’t as free of commercial interest.
RITHOLTZ: That’s very interesting.
LAMPLEY: I had been given to think. So, I felt that when I was in academia, there was a very ivory tower or sort of division between the academics and the museum world and the commercial art world, and I was reflexively…
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RITHOLTZ: Young and naïve?
LAMPLEY: …very disdainful of the commercial art world.
RITHOLTZ: And so, in order to get away from all that commerciality in the museums, you end up at Christie’s. How did that happen?
LAMPLEY: I decided to throw it open and just decided, you know, it was time to see what the commercial art world was all about and I was attracted to the auction houses particularly because it gives a more macro cosmic view of the market as opposed to going to a gallery where you might focus on a few artists in great depth and – but I looked at – I was just applying a job generally. At that point I wanted to move to New York and have a different job experience.
RITHOLTZ: So at Christie’s you discovered you have a talent for helping to identify and sell art. Tell us about that a little bit.
LAMPLEY: Well at Christie’s, I really discovered that I loved business as much as I loved art and I loved the fast pace, I loved the competitive nature, I loved the act of discovery and what you get at the auction houses that you don’t get anywhere else is old fashioned connoisseurship. You’re really seeing so much material by an artist. In my prior experience, you know my academic and museum experience, you were only looking at masterpieces and you never had any contacts for why something was a masterpiece because you weren’t seeing the drudgery, you weren’t seeing renoir sketches, you weren’t seeing his smaller paintings or vignettes that were then cut down.
You didn’t really have the full scope, suddenly at Christie’s I have the full scope. I got to see so much more and it was really invigorating. I felt like I trained my eye and that was something that I hadn’t truly done before. It was a much deeper experience with the art and it was thrilling to be working with people directly and talking to them about art all day long and in a variety of capacity is whether I’m talking to a seller or a potential buyer, or appraising someone’s collection. I just talk to people about art.
RITHOLTZ: You said something previously that I have to ask you about. You said you learned to train your eye when looking at and appraising art. Explain that a little bit.
LAMPLEY: By looking over years at many, many examples of artworks by particular artists. So I have a field that I focus on and that’s primarily European Art from the latter half of the 19th century and the first half of the 20th century.
RITHOLTZ: That’s my favorite grouping, so…
LAMPLEY: It’s hard not to be a favorite, it’s mine too. But by looking at so many examples by these artists over and over again, you really get an instinctual sense of authenticity. That’s what connoisseurship is. It’s what Malcolm Gladwell is talking about in Blink. It’s looking at something and having a gut feeling. And you only get that by looking at a great range and multitude of examples by a particular artist.
RITHOLTZ: Ten thousand hours and hundreds, and hundreds, and hundreds, and hundreds of paintings later. When you first see something, is it immediate – by the way, we’ll get to this in our appraisal discussion, the tools of what you use and it’s not just instinct but, after a certain period of time, is it instantly you could look at something and say, “That’s good. That’s not good. That’s authentic. That’s not.” How fast do you make that decision after a decade of practice?
LAMPLEY: Oh it’s 95 percent to 98 percent instant. There are of course exceptions or particularly excellent forgeries or things that are troubling or juvenilia by an artist that may not look exactly like what you expect from the artist but by and large…
RITHOLTZ: You know right away.
LAMPLEY: …it’s immediate. And then there are two wavelengths, it’s not just the authenticity wavelength then there’s also the commercial appeal instinct, that also becomes a reflexive reaction.
RITHOLTZ: So, explain that – every art is obviously subjective. I like this, I don’t like that, I love this artist, I cannot stand that artist – but what is the – is the commercial appeal subjective or obviously we get auction numbers so we know what the most recent price transaction was but how subjective is the evaluation of what’s the commercial appeal of this particular painting.
LAMPLEY: It’s highly subjective and as an expert, we learn to dissect and quantify that subjectivity to the degree possible. But it’s also why if we set the auction houses, we work in themes and try to utilize the diversity of opinion to come to a conclusion about something. But generally yes, I’m looking at something and I’m saying, “Wow, this is sensual and romantic and how is incredibly luscious surface and I’m looking at example B, which is a very similar picture but it’s not the same because the color is just not quite as rich and the surface is not quite as thickly painted and that makes an enormous difference in price.
RITHOLTZ: So I read a statistic the other day that really shocked me. A recent poll noted that about 60 percent of wealthy US art owners claim, they’ve never sold a piece from their collection and about 40 percent have never even had their holdings appraised. How consistent is that with your experiences?
LAMPLEY: That’s somewhat unsurprising to me in the sense that in my experience there are many people who are very comfortable with the appraisal process and there are some who are just skittish about it, who don’t like the idea that somebody is going to know what they have.
RITHOLTZ: Oh really.
LAMPLEY: And I understand that. I don’t think that we’re in a world where people are concerned about privacy and the privacy that…
RITHOLTZ: And security, I would imagine.
LAMPLEY: And their data, and I think that’s changing and people are becoming more accustomed to – needing to share information in order to receive insurance and services. But primarily people get appraisals for insurance provider and that’s the primary reason or if they are receiving a loan for example, and then in terms of selling, yes, many people collect art over their lifetime with no intention of selling it, either until they pass or their told and determined that that will be sold or until they gift it somewhere. So that can be quite common, that certainly used to be, I think much more common than it is today.
RITHOLTZ: So let’s talk about one of those collections that it appears where there hasn’t been a sale over a long, long time, the collection of Peggy and David Rockefeller, some people have guessed or estimated this as three quarters of a billion dollars or numbers close to that and have called the upcoming sale of this the sale of the century. What are your thoughts on this Rockefeller collection and what do they actually have?
LAMPLEY: They have some stunning works specifically from the period that I focus on. They are going to be wonderful Monets there’s a sensuous Matisse Odalisque painting from the 1920’s that perhaps we’ll reset the market for that artist.
RITHOLTZ: Really. When you say reset the market, Matisse is considered one of the grand masters of that era. I mean how much further can Matisse be reset upwards or am I under estimating that?
LAMPLEY: He is widely recognized as one of the most important artist of the 20th Century but the market is driven by the examples that come to market and that differs for every artist. So for example of Picasso, there had been great Picassos, truly great Picassos that have sold publicly at auction.
RITHOLTZ: In private hands.
LAMPLEY: Yes.
RITHOLTZ: As opposed to Matisse where a lot of work is in museums.
LAMPLEY: Or hasn’t been sold for whatever reason. So there haven’t been equally great examples by Matisse in my view that have come to market in the last 10 years. And every decade the market is changing. So you set a record for example, a Van Gogh that sold in the 80’s would sell for a completely different number today and that would in effect reset the artist market. So it’s not just about completely fresh works, it’s about the timing of those works arriving in the market.
RITHOLTZ: Thirty years is a long time, there’s been a lot of appreciation in the stock market, there’s been inflation. One would imagine that these are selling for more but when you say reset, I’m assuming, “Hey, this is more than just 8 percent a year, a little above inflation.” This is a whole order of magnitude change. Is that what you are suggesting about the Matisse for example?
LAMPLEY: Yes, absolutely. I think it could double the existing record of the artist.
RITHOLTZ: Wow, so we started talking about appraisals and you said earlier, you get a sense of a work of art in a millisecond and that’s just a function of many, many years looking at thousands of different paintings. But you don’t just rely on instinct. Tell us a little bit about the tools of the trade and I recall you saying, flashlight, camera, tape measure, and UV light. What can a UV light tell you outside of CSI? What can that tell you about a painting?
LAMPLEY: A UV light typically reveals later stage painting. So that could in some instances even be the artist’s own reworking of their painting later on, which is so important to recognize. But generally speaking, it is a restoration to the painting and people are of course very interested to understand to what degree the original artist work is preserved and the painting that they are looking at or another hand has helped restore the image to what we believe it should be.
RITHOLTZ: And that would affect not so much the authenticity of the painting but the final valuation, is that a fair statement?
LAMPLEY: There’s a range, but generally yes. It just refers to the condition of the work, so it is a factor on the value of the work but not generally the authenticity though. Of course, if a work has been broadly repainted and there is very little evidence of the original hand then one would argue that that’s an authenticity issue or question.
RITHOLTZ: So let’s talk about authenticity a little bit. You’ve discussed – and we’ll discuss provenance. You’ve referenced – attribution is essential. So for a lot of paintings, we could literally trace from the artist painting it, to the sale, and that chain of custody goes down right to today. What happens when you are confronted with what you think is an authentic original but that provenance is missing, that custody chain is missing, and there could be decades where it was privately held and nobody knows about it?
LAMPLEY: So I have a great example for this actually and it was one of the most fun things that I’ve worked on in my career. Given that I went to Harvard, I was contacted by a Cambridge local, a few years ago, I think this was 2007 and they had a painting that they invited me to come see. And it was a Léger still life from the 1920’s. It was 50 inches high. It was radiantly beautiful and it clearly to me was consistent with the work by the artist that I had seen from this period.
RITHOLTZ: This is Nature Morte,is that right?
LAMPLEY: Yes, this would be an unusual painting in some senses to copy not because forgeries of Le-gee are unusual because they are actually very common.
RITHOLTZ: Really.
LAMPLEY: But because of the scale of the work and how beautifully painted it is and how reductive the style is, it’s particularly difficult to forge minimalist paintings very well. So I looked at it and then I learned something even more important, that the person who I was speaking to was a family descendant or direct descendant of the previous Guggenheim Director and MoMA curator James Johnson Sweeney. So, they have no provenance, they had no bill of sale for the work and there is no authenticating body for the artist’s Le-gee so the only resources that we have in the market are the catalogue raisonne and provenance and this work was not in the catalogue raisonne and one had to believe that this work would have been given or sold directly by the artist to the curator, James Johnson Sweeney and that’s why it was not featured in the book and also – why it was – this had to be a proven and plausible history.
The one thing that was missing was Le-gee typically titled, numbered, and dated his works on the reverse of the canvass and there was a backing on this painting and that could not be seen. And my team and I basically came to the conclusion that as long as this had the inscriptions on the reverse that it would ring true. But if didn’t have the inscription on the reverse, it was implausible and we brought it to New York and we took the backing of the painting and they are beautifully, perfectly as we wanted to believe it would be was exactly the style of signature and inscription and titling on the reverse that we have come to expect from Le-gee in this period.
And we were able to sell the work. It was estimated at, I believe three to five million dollars and sold for eight million and it was a stunning success.
RITHOLTZ: I read about that. That’s fantastic. So, I’m a car guy and we call the occasional garage fines where there are some old Porsche, Ferrari, that’s gathered dust for 30 years. Literally the sun went off to Vietnam, didn’t come back, the parents couldn’t sell the car. It’s worth many times more than what was pain many years ago.
Not too long ago, I read about a garage find somewhere in the Midwest of a Jackson Pollock. Someone had called somebody in to authenticate like a $300.00 sports piece of memorabilia and in the pile on the garage at the bottom is this Jackson Pollock. At this point in the world with the internet and everything else, how realistic is that great works of ark are buried in people’s attics, or garages or what have you.
LAMPLEY: It’s still uncommon as much as we’d like to believe what will happen to us. But what needs to be understood is that we now live in the information age so we assume that there is a clear archive of historical data associated with every artwork that is available to us. And it’s just not true. Yes, if you’re buying a contemporary artwork that should be able to easily be traced back to the dealer and the artist and if you can’t do that, well – then, you should be out of luck because that should be so easy, that information change should be unbroken.
But, for as recently as the early 20th Century, the information chain is definitely broken for so many artists. There are so many artists for whom we have incomplete archives or the dealers didn’t preserve, their journals and their invoices well enough for us to have a complete picture of sales and so – for the dealers who did do that in the early 20th Century, it’s a huge boon to the market, or for example the fact that Picasso was quite logical and he codified a lot of his work, he numbered and dated almost everything. He also cooperated in the publication of a fairly thorough book, a catalogue raisonne of his very extensive production. These are huge market tools.
RITHOLTZ: I remember when 60 Minutes had Picasso on and in the back of his property is a barn, literally filled with hundreds of his work. I don’t remember which correspondent was interviewing him. It might have been Leslie Stall and she says, “Aren’t you concerned, you have thousands of this works – worth millions of dollars anyone could steal them, they are invaluable.” And his answer was, “Not until I sign them.” And I always was very much amused by that but how realistic is that? Someone steals a Picasso from his garage that’s unsigned, is there any value there?
LAMPLEY: There are unsigned works and for every artist actually, there are works that generally remained in the studio and were unsigned…
RITHOLTZ: Unfinished, unsigned, or unloved, or some combination.
LAMPLEY: Well, that’s also for a subjective. There is an opinion to that, whether unsigned and unfinished or the same and whether that is different for every artist, it’s unstable, it’s not a direct equation but there is value. There is definitely a value. It’s just like anything it’s a factor on the value and so, everything is an exponent on the artwork itself.
RITHOLTZ: Makes sense. Let’s talk a little bit about some of the auctions and things that are going on in the world of art today and we would be remised if we did not discuss that giant Da Vinci sale a few weeks ago. Tell us about that. Does $450 million make any sense for a Da Vinci work that – let’s be honest, not his best day in the studio.
LAMPLEY: Here is how it makes sense. The art market is definitively shaped right now by individuals who are aligned with institutions or creating institutions. The fusion of the institution and the individual is hugely powerful at the top end of the market. So the way I see it, there could be no greater attraction for the Louvreof Abu Dhabi. There is no greater single object that they could add to their collection to make that institution make sense, especially in its pendant relationship to the Louvreof in Paris than a painting by Da Vinci.
RITHOLTZ: There are what – 20 or less examples of…
LAMPLEY: There are fewer than 20 paintings that exist in the world, all of them in museums.
RITHOLTZ: And all of them just other masterpieces, is that a fair statement or am I overstating it?
LAMPLEY: I wouldn’t personally attest that they’re all are masterpieces because I haven’t seen every single one of them.
RITHOLTZ: What are you doing, you travel so much? Shouldn’t you do like a Da Vinci world tour, that I would think, that you could do in a year?
LAMPLEY: I could actually quit my job and do a “Da Vinci world tour” probably, that should be my full-time job.
RITHOLTZ: That’s the year between college and grad school, that’s in the hierarchy of works by Da Vinci from The Last Supper, and I’m not a Mona Lisa fan, so I don’t put that at the top of the heap, it’s kind of small and there’s a weird history of it being stolen which was made it so famous but, where does this current piece rank and is it $450 million because it’s a Da Vinci and any Da Vinci would have gone for that for this museum or is there an inherent value that I’m completely missing?
LAMPLEY: No, it’s a notional value based on it being a Da Vinci, it has almost nothing to do with the object itself. I really don’t believe that that people who are pursuing this object cared deeply about how it looked or the condition of the work. And that’s fine, that’s their right but the value of this object is founded almost entirely and the fact that there is no other Da Vinci painting that you can ever acquire and…
RITHOLTZ: None of these other 16 or 17 are coming up for sale, they are permanent collections, that’s it, they never…
LAMPLEY: You’re never going to be able to buy one, and they are such a premium in the market in the world for paintings over works on paper. If you could ever have something, it would be perhaps a pencil drawing…
RITHOLTZ: Right, and he did lots and lots of drawings.
LAMPLEY: And people want paintings so much more.
RITHOLTZ: That makes sense. So let’s talk about some of your favorite paintings. We mentioned the Léger that you sold. Let’s talk about Les Femmes d’Alger by Picasso, which is – I think a lovely work that went for lots and lots of money. Tell us about that.
LAMPLEY: That was a stunning painting. It is a work that had previously been in auction in the Gansale, in 1997. So it was interesting that it was not the first time that it was ever appearing on the market.
RITHOLTZ: And what did it sell for in 97 because I want to tee up the surprise ending?
LAMPLEY: It was $33 million.
RITHOLTZ: All right, so not an insubstantial amount of money but less than 20 years later it went for how much?
LAMPLEY: It was $180 million.
RITHOLTZ: That’s a lot of money and that’s a lot of appreciation, what changed in that – not even 20 years to make that rise six fold?
LAMPLEY: First of all, there’s just general inflation, because if you just do the math on the market over that time, it would have multiplied significantly but it’s also the power of the painting is staggering. This is unlike the painting we are previously talking about. This is a seminal painting; this is a fully realized complex, multi-figure rich abstraction. It is balancing – it is walking the fine line in Picasso’s work between abstraction and figuration perfectly. It’s incredibly colorful dense. It just really shows off both his painterly prowess and his tight draftsmanship because it is a very architecturally designed fractured painting. It’s just – it’s Picasso, it’s the epitome of Picasso and what you have in those intervening years is you no longer have a largely western driven market for great Western art. You have a global market for great Western art. You have people from every part of the world competing for the best Picasso.
RITHOLTZ: So that’s Asia, especially China, South America, and Brazil, and of course, the Middle East. Let’s talk about another Picasso. My French is not as good as it should be, but Painter and Model is another – its English translation, is another work that you – I believe help bring to auction. Am I correct in that recollection?
LAMPLEY: The only thing about that is The Painter and Model is a very popular series or a series that Picasso pursued for a period in the 60s so there are a number of them.
RITHOLTZ: How many of those did you help sell?
LAMPLEY: I’ve worked on – I probably sold 10 Painter and Model paintings.
RITHOLTZ: Really, there’s that many of them. Wow. All right, so we mentioned Picasso and Léger. Let’s talk about The Grainstack by Monet, which everybody has seen, they are fairly seminal, it’s the Notre Dame series and the Grainstack series. Tell us about that, what was that sale like?
LAMPLEY: That was a real highlight for me. I had seen that painting for many years.
RITHOLTZ: He’s done a few of those – a number of studies in various versions.
LAMPLEY: But there hadn’t been one on the market for 15 years and in that time, in that intervening 15 years, there had been a huge surge in prices for water lily paintings and that had essentially moved the market, the modern market or the contemporary market for Monet is all about the profundity and abstraction of the serial pictures, whereas the market for Monet 20 years ago was all about the classicism and clarity and beauty of the 1870s impressionist pictures. So the market for Monet has completely changed over 20 or 30 years and during this course of time we have a 15-year gap between the last haystack coming to market and this one.
So we knew that there was an opportunity here. We did not know exactly what the market tolerance or the benchmark price would be for a haystack.
RITHOLTZ: Tell us how that transaction worked out.
LAMPLEY: So, I believe the bidding opened at around $50 or $55 million, the work ultimately sold for $80 million.
RITHOLTZ: Not too shabby.
LAMPLEY: I was on the phone with the direct under bidder and it was a fight. It was a real duel until the end and they were very disappointed because it was a staggeringly beautiful picture that not only really bridges this important period of our impressionism but also can be situated perfectly in a contemporary or modern collection.
RITHOLTZ: So let’s talk about a few others that you’ve brought to market. Modigliani, Van Gogh, Jacquemin tell us about an example of each and PS, I don’t mean to downgrade these artists in any way. We could talk about any of the billions of dollars of artwork you help sell but for time’s sake, I just want to reference these three together.
LAMPLEY: Well, Modigliani remains one of the most fascinating artists to bring to market today because of the profound scarcity of his production. He died young and really at his – at the peak of his artistic power, so you’ll never know – his biography really fits in to the mythology that people, much like Van Gogh as well like to associate with great artists…
RITHOLTZ: The tortured soul who dies young, is that what we’re…
LAMPLEY: Yes, and you never perhaps got to see their fully realized greatness. We can only imagine how much – we got to see Picasso live a full life and see what he – how his art changed decade over decade and there is a great fascination in that but there is an equally great fascination in the curtailed genius and the genius that never came perhaps to complete fruition, where would his art have gone. And with Modigliani, you have beautiful portraits, stately portraits, we’ve sold a range, we’ve sold great male portraits and that exceeded our expectations because the market is so impoverished as Modigliani and that people are truly thrilled or excited by any examples that come up and really will chase them.
RITHOLTZ: It’s another scarcity issue. There’s only so many and if you want one, you’re going to pay up.
LAMPLEY: That and then, of course we sold, in my time at Christie’s they Markee Modigliani, the best Modigliani, you’re ever going to get, a reclining female nude.
RITHOLTZ: What did that go for?
LAMPLEY: It was $173 million.
RITHOLTZ: Not too shabby. We have been speaking with Brooke Lampley. She is the former head of Modern Art and Impressionist at Christie’s, soon to be the Vice Chair of fine arts at Sotheby’s. If you enjoy this conversation, be sure and stick around for the podcast extras while we keep the tape rolling and continue discussing all things art related. We love your comments, feedbacks, and suggestions. Write to us at MIBpodcast@bloomberg.net. You can check out my daily column on Bloomberg.com or follow on Twitter @ritholtz. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg radio.
Welcome to the Podcast, Brooke, thank you so much for doing this. I am fascinated by the topic and really want to delve into so many more questions and I don’t know where to pick up with Jacquemin, Van Gogh, and Brancusi or – let’s talk about the question I would imagine is on a lot of people’s minds is how investible is art. Because everything we’ve been talking about has been, forget Da Vinci, what do we say to him – 17 or 16 paintings.
LAMPLEY: Sixteen.
RITHOLTZ: And then, even if you go to as prolific as Picasso and to a lesser degree Monet have been, they’re still only a finite number of those works and when we look at the modern world, and I don’t mean modern painting. I mean, 2018 painting from artists that are working today and selling their works. How investible are those works? Is it the sort of thing that were going to a century from now, those are going to be the next $100 million paintings or has the golden age of art production kind of come to an end and everything going forward is something different?
LAMPLEY: It’s a funny thing, you know hindsight is always 20/20 so I think we look back at our view of the art market of eras past and the works that we’re still selling today is defined by a selection process that’s already happened. And today, we’re faced with how we make that selection process in real time. Surely, a great number of the artist working today will be valuable in the future but if I had a crystal ball to know exactly who those would be and who they wouldn’t be then, I would quit what I’m doing and just do that full time.
RITHOLTZ: Well you still need the capital to go out and spend. Even at five and $10,000.00 painting.
LAMPLEY: So, I’m doing that to some degree myself. I’m interested in that but I really believe, I can’t help but be wooed in the stories and the people I’ve met, by the people who collected with their hearts…
RITHOLTZ: Just for the love of it.
LAMPLEY: …with the passion and that passion stood the test of time. I think time and again, you hear and see that people who really cared about what they were looking at and collected with a view to that level of quality, that the market rewarded them because at the end of the day that’s what we all care about and that’s also what drives the market is – the quality to some degree.
RITHOLTZ: So how much of that is the luck of the era and let me rephrase that. So we mentioned earlier the Rockefeller collection from David Rockefeller that here’s a person who inherits his fortune in the mid-20th Century. So he’s got the previous 100 years of works that we now know are worth hundreds of millions of dollars, tens and millions of dollars. But he is buying what he and his wife like. He is buying what’s available. He’s buying what is actually up for sale and 100 years later, 50 years later it’s an enormous collection.
If we were to do the exact same thing today, somebody inherits a few billion dollars and they start buying what they like, over the next 50 years, what are the odds that what they pick up over the next few decades are going to appreciate the way the impressionists, the early modernists, because when we look at the arc of history of painting, we’re now in a totally different sort of zone than what’s developed over the past previous few centuries.
LAMPLEY: But I think we still need to recognize that even when the Rockefellers were acquiring – so it’s interesting, it was a mix of historical and contemporary art. I think those present Picasso and Matisse choices that people made when these people were still actively producing works were incredibly wise and wonderful selections but they were pretty much – they were already established artists. This is like buying a Richard Serra. This isn’t buying an artist down in Chelsea who is having their first gallery show. This is buying a very well-regarded Jeff Koons, someone who is – has already been shown in museums and already has a commercial following and established collecting base.
So I believe what the Rockefellers did and there are many other examples though not to the same degree. Yes, that would prove valuable time and again, if you were able to go out today and buy career – mid-career examples by already established artists and you sell that in 50 years. I do believe in that value. There’s no question in my mind. But I think the greater question is how you buy truly contemporary art and…
RITHOLTZ: So how do you?
LAMPLEY: …and for that, I think, the people who have been most successful are people who had some kind of governing philosophy or metric. So whether that be – I’m buying German photography from the 1980s, I’m buying women artist of earlier historical periods, I’m buying great Cuban art from the 1950s. Whatever it may be, the people who really dedicate themselves to some sort of theme and they – by the virtue of collecting in that theme are already – they are working in tandem with their collection, they’re enhancing the value because they are creating a story, a narrative. They are creating the category essentially for people to follow.
RITHOLTZ: So how does one determine – this is a tricky question. So, whether you’re looking at contemporary art that’s being painted today or finding a niche such as 1950s Cuban or 1920s German photography. How do you determine what is a realistic valuation when you’re making a purchase because there really isn’t a whole lot in the way of comparables. You’re kind of figuring out some number but it seems to be, I don’t want to say random but really subjective and in a tremendously broad potential range, if that makes any sense.
LAMPLEY: Oh, it’s incredibly difficult. And this is why people love auction. Auction in the secondary market provides the security of comparables of a market history and some parameters for pricing that are based on historical date. But when you go to a gallery, there is no data.
RITHOLTZ: It’s a number in that…
LAMPLEY: There are no contacts; it’s just what their pricing it at and you have to make an evaluation that is really subjective about whether you think something is worth that value. Now of course, you’re welcome to ask the dealer and you should – what the pricing history has been for the artist, what previous shows they’ve had, if they can give examples of other sales that can bolster the information that you have. But that market is essentially untested until someone tries to resell their work. So I challenge the auction house’s phase very often as people – artists use to contact me all the time wanting to sell their works directly through the auction house and I would say, “I’m sorry, this is a bit of a chicken in an egg,” but we don’t really sell anything that hasn’t already been sold. We need a track record.
RITHOLTZ: That’s the floor at the very least. So let’s talk a little bit about the auction process. I was surprised to read that a lot of these lots go off in a matter of seconds or barely minutes because when we see something like that Da Vinci – it was seven or eight minutes of bidding and it got frenetic and crazy. What is the typically auction process like? How do you determine how – what the starting price is and how long do the actual bidding process take?
LAMPLEY: It’s a great question because it’s hugely variable. So watching the Da Vinci sale, I think it was actually 15 minutes of bidding and that’s a really long time in the auction room and I’m not sure what the record is, but it may be up there for a single lot. Every lot is – the auctioneer has a tremendous amount of discretion, going into an auction, which is a live action – for the purpose of this conversation, live auctions.
The auctioneer will sit down and look at something called the auctioneer’s book before the auction and think about where they would like to start the bidding on each lot based not just on where the reserved prices because most lots offered at Christie’s or Sotheby’s say have reserves which is…
RITHOLTZ: Meaning if doesn’t hit that price it doesn’t get sold.
LAMPLEY: It’s the confidential minimum below which the work will not be sold. But in addition to the reserve, the other information that they may be considering is how many phone bidders have signed up to been on the lot, how many internet bidders are registered for that lot. If somebody’s left an absentee bid, so if you have a lot of competition on the lot, you would probably start higher and closer to the reserves than if you have nobody, you might start further away from the reserve and chandelier bid more or give yourself more room…
RITHOLTZ: What does that mean, chandelier bid?
LAMPLEY: So the auctioneer in New York State can legally bid on behalf of the auction house, so essentially fake bid up until the reserve, so that if someone comes in and bids $10,000.00 but the reserved is $18,000.00, the auctioneer will bid against them in an effort to entice them to bid up to $18,000.00
RITHOLTZ: Because if it doesn’t hit reserve it doesn’t get sold. So it’s a harmless process and it perhaps moves the sale.
LAMPLEY: And it also protects the confidentiality of the reserve, because what is less effective is to just say, “Okay, $17,000.00. Does anyone want to bid $18,000.00?” And everybody is just waiting and looking at each other to see if anyone will bid, that would discourage people from bidding.
RITHOLTZ: Right.
LAMPLEY: Because they would wait and let the work not sell and then try to make a cheaper offer after.
RITHOLTZ: Does that happen if something doesn’t go for reserve – so again, my frame of reference is automobiles. It’s the same thing, the auctioneer says, “Reserve is met,” or the auctioneer says, “Reserve is withdrawn, this is a car that’s going to sell,” and low and behold very often that runs the price up. What is the bidding process like in terms of increments? What is it like beyond the reserve once we know that a sale has taken place?
LAMPLEY: So the increments are fairly standardized, they go in fives or ones between one and two, twos between two and three, zero, two, five, eight, ten, between three and five and then fives, above that between five and ten in all iterations and hundreds and thousands and hundreds of thousands but the bidder can always request a smaller increment. They can always try to break the bid.
RITHOLTZ: Meaning, break the bid meaning – is that what we saw with the Da Vinci going up in three million dollar lots when they could have gone up in one or two million dollar lots?
LAMPLEY: Well, with the Da Vinci, it was particularly unusual and very interesting. But yes, essentially the bidder can determine their own bid at the auctioneers discretion and then the auctioneer might try to control. The bid increment is their greatest control over the momentum of the auction. So the only reason they don’t want to bid increment to break down is because they want – there’s no reason if you have multiple bidders to working very small increments.
RITHOLTZ: Right.
LAMPLEY: But with the Da Vinci, it was fascinating because the direct under bidder was always bidding $2 million dollars and the next bidder – the eventual buyer bid $8 million dollars each time and then eventually made like a $30 million dollar bid.
RITHOLTZ: So they were kind of saying, “Dude, give it up. I’m taking this home and you can’t keep up with me.”
LAMPLEY: They were communicating through their bidders…
(CROSSTALK)
RITHOLTZ: And yet the under bidder continued to come along, thinking – so is that a little bit of poker, they are – “Hey, this guy is bluffing it, $8 million a pop. I’m going to stay in.”
LAMPLEY: I thought it was their own demonstration of determination. I thought it was really interesting. I thought the direct under bidder was even more interesting than the buyer because of their resilience and saying, “You won’t move me.” I was a little…
RITHOLTZ: That’s intriguing.
LAMPLEY: …dissuaded that they didn’t win that battle at the end because…
RITHOLTZ: And we don’t know who the under bidder was. No one stepped forward and said, “Yes, that was me.”
LAMPLEY: No, nobody has identified themselves.
RITHOLTZ: So, I guess at this time I can reveal. So that’s kind of fascinating. It sounds like, there is this very specific set of rules and a very specific dynamic to the bidding process. How does somebody who is – you know, there’s a lot of – I hate the word Nouveau riche but there’s a lot of new money. Let’s say, you’re a bit coin millionaire and you want to go buy some art because bit coin can be lost but the art, at least you can insure it. How does someone learn on some of these $10 and $20 million dollar or more paintings? How do you learn how to engage and behave at an auction?
LAMPLEY: You talk to me. That’s what I’m here for.
RITHOLTZ: So, if you’re working of the auction house, who you know, obviously is incentivize to maximize the price on behalf of the seller, how do you assist the buyer, with a house, the real estate agent is usually the seller’s agent unless you go out and get a buyer’s agent, you’re fighting or negotiating with someone who isn’t working on your behalf. If you’re the auction house and I say, “Hey, I really have a thing for Brancusi and I want Brooke to help me find one.” How does that work with you and the auction house if the auction house is representing the seller?
LAMPLEY: It is tricky that we work on both sides. My response to that would be that the market is repetitive and cyclical. Relationships are long. I’m not interested in a short-term relationship with a client. I’m not interested in over selling him on one object and to the detriment of what our long-term relationship would be because I have so much art to sell, more than four times a year. I have so much art to sell all the time. We have so much on offer. The market is so voluminous and so transaction heavy right now that it’s really in my interest to help someone find the right thing and have them be happy. Also because in my line of work, I work as you mentioned with both buyers and sellers. So every perspective buyer is a future seller.
RITHOLTZ: Right.
LAMPLEY: So, I want them to be happy with their purchase because if they are going to sell it someday, I want them to come back and talk to me. But the other answer would be that there are lots of independent advisers in the art world who are full time and who are consultants who would love to make themselves available to people to advise them on transactions and you know, how to work with an auction house. The only thing is, as with any industry, they take a commission and I take no commission.
RITHOLTZ: So you’re working for the house and the house is taking their pound of flesh, but your job is to just make everybody happy and look for repeat business. Related to the auction, I have a couple of other questions I don’t want to forget. So, if something doesn’t get sold and it doesn’t meet the reserve or whatever and it isn’t sold then and there, you’re suggesting, “Hey, this auction house has eventually become giant galleries with warehouses full of stuff to be sold.” Even if it’s not being sold at auction, it may be sold at some other non-auction date, do I have that right?
LAMPLEY: So everything that happens after the auction is variable and at the seller’s discretion. The first thing that happens is we will generally accept offers after sale offers for things that didn’t sell.
RITHOLTZ: Not like the day after – you’re talking weeks or even months later?
LAMPLEY: No, immediately after.
RITHOLTZ: Okay.
LAMPLEY: Maybe in the hours after.
RITHOLTZ: Oh really.
LAMPLEY: Usually for three days to five days maybe after the auction.
RITHOLTZ: So, but once a week goes by, that’s it, it’s done?
LAMPLEY: It’s probably to wait. We stop…
RITHOLTZ: So I missed, purchasing something at the last auction but you know, it’s been on my mind for a few months and I call up Brooke and say, “Hey, remember that Monet that didn’t sell? I’m interested in pursuing that?” What can we do, can you reach out to the seller. Do things like that…
LAMPLEY: It happens all the time.
RITHOLTZ: Really.
LAMPLEY: And there is no limitation. I definitely can and I will when it’s appropriate. Generally…
RITHOLTZ: And then the auction house gets paid their normal pound of flesh anyway if they facilitate the transaction.
LAMPLEY: It would be then classified as a private sale. We do non-auction transactions as well.
RITHOLTZ: What’s their balance typically? How much is auction and how much is non-auction. I’m kind of curious about that.
LAMPLEY: Well, it’s changing all the time. I think the last statistics for Christie’s in 2016 – 25 percent of the business.
RITHOLTZ: We’re non-auction.
LAMPLEY: But I could, I’m not sure if I’m utterly correct about that.
RITHOLTZ: That sounds about ballpark, right?
LAMPLEY: But it’s a growing sector of the business and there’s – because really what everybody is realizing is that while we all know the gross auction revenues of the auction houses year-on-year and their fluctuate say – between Christie’s and Sotheby’s together in the last 10 years, it’s been anywhere from $10 to $15 billion a year.
RITHOLTZ: That’s amazing.
LAMPLEY: But then there’s a whole another potentially $45 billion worth of art being sold every year that is outside of that. There’s a lot more market to capture.
RITHOLTZ: Are you familiar with Artsy?
LAMPLEY: Yes.
RITHOLTZ: So Rich Barton is the person behind Expedia, Zillow, and Glassdoor. And this new site he’s developed, he’s co-founded is below everything we see at auction is huge market of art that doesn’t really have a way to be tracked and transacted. Is that potentially the next larger wave of arts sales?
LAMPLEY: I think digital is going to transform the art world.
RITHOLTZ: Transform, that’s a big word.
LAMPLEY: I don’t think it’s necessarily out sited the auction houses. I think it’s already happening, they are increasingly digital auctions taking place or sales online at both Christie’s and Sotheby’s as well as other auction houses as well as other online platforms. And yes, what I’ve seen is that there is a remarkable appetite to buy things online at much greater price points than I think people would fathom and we should know because I buy everything else in my life online. So clearly, we’re all getting much more comfortable with buying online and that is now extending significantly into the luxury space.
RITHOLTZ: That makes sense. Amazon is now 20 years old. So when we talked earlier about provenance and fraud, I read a crazy statistics somewhere it said that art theft and fraud, and they didn’t break it out is $6 billion a year. Is that number remotely plausible? That seems like an insane…
LAMPLEY: Wow, that is significant, that’s shocking to me. I wouldn’t know. I am fortunate that we’re not really directly involved. We do see people bring us forgeries but we don’t…
RITHOLTZ: Right.
LAMPLEY: Because we try to avoid them and refuse them and not price them. We’re not really quantifying that space.
RITHOLTZ: So, as unthinkable as it is hypothetically, a non-original slips through and gets auctioned off and then subsequently as we’ve discovered recently with a handful of not auction houses but galleries, people have sold hundreds of millions of dollars worth of stuff – that’s forgeries. Does the auction house stand behind the provenance of what they sell or is it simply they’re facilitating a transaction and not making any sort of guarantee?
LAMPLEY: No, there’s a warranty. There’s a five-year warranty and I believe that’s standard in the industry and…
RITHOLTZ: Which says that this is – if this is sold as a Picasso, it’s a Picasso.
LAMPLEY: The warranty is specifically on the attribution of the work. It’s pretty much not about anything else. It’s not about the condition, it’s not about other specifics. I mean, surely if we said the work was 51 x 30 inches and it turned out to be you know, 2 x 3 inches, that would be included, but…
RITHOLTZ: But I mean, if it’s all happening and nobody cares…
LAMPLEY: … it’s really about attribution.
RITHOLTZ: … it is by the artist as claimed.
LAMPLEY: It’s either by the artist or not, that’s the issue and it’s a five-year warranty, but beyond that, there are significant reputational hazard. You know, it would be a serious issue for either auction house in that case.
RITHOLTZ: Has any of these come up in the past 20 years where something was sold, discovered to be not who it was supposed to be by and the auction house made good?
LAMPLEY: Absolutely. It happens and generally, and hopefully not usually at the – you know, Da Vinci…
RITHOLTZ: Upper end?
LAMPLEY: … and Picasso, Falguière level, but it happens when there are changes in scholarship or what we call in the industry expertise and there are authenticating bodies for a lot of these artists particularly in my field in impressionist and modern art and in France, the Droit moral and it is a legal right authentication on behalf of one of these artists is a legally appointed or given right in France.
So when these changes hands, when different scholars take over and perhaps change the view that was given 10 years ago, that can be an issue that is brought back to an auction house.
RITHOLTZ: And I keep coming back to Jackson Pollack, I recall an issue with I don’t remember if it was a girlfriend or a mistress, there was a painting that was supposedly gifted to her or then it was by her and is this is a $50,000.00 painting or a $50 million painting, how do these sorts of things get resolved or do they remain unresolved and, “Hey, you want to take a chance for $50,000.00?” Maybe you’re getting nothing, maybe you’re getting a $10 million Pollack, is it that open ended?
LAMPLEY: So all roads lead back to Da Vinci. The Da Vinci is a great example. The Da Vinci is a painting that in 2005, I believe was purchased at a very small regional auction house and after extensive research was re-attributed to Da Vinci. It was not attributed to Da Vinci at that time when it was purchased for I think, $10,000.00.
So what is most incredible in the story of this Da Vinci is that a work of this importance by such a famous artist would have been so recently rediscovered and reattributed to the artist and the way that that happened was that there was an important exhibition at the National Gallery of Art in London in I want to say 2010, but in addition to scholarship that was done by the purchaser and just generally in the field through this exhibition, a consensus was able to be established among leading scholars in the field and communicated to the world at large through this exhibition that this was now known as a Da Vinci.
That’s essential. That’s where the commercial and the academic worlds really converge. We do not rely on ourselves as a sole arbiter because clearly, we have a commercial incentive to sell, so we look to academics and we look to a scholarly community to make these attributions.
RITHOLTZ: How often does – do we see a major change in attribution like that where something literally goes for $10,000.00 to half a million – I mean that’s a – forget the price, how often do we discover a Da Vinci that we previously didn’t think was a Da Vinci? And I don’t mean just with that artist, I mean, any major artist from Picasso to Monet to Rothko to whatever?
LAMPLEY: Hardly ever. What is much more common rather than adding works into the cannon is that there are works that are excluded from the cannon that could potentially be real. So you have any number of people who own Modigliani’s today, coming around clamoring saying, “I have all of these information. This is a real Modigliani.” And you have a bunch of experts in the art world or commercial experts saying, “I am really sorry, I can’t help you,” because there is no universally recognized expert in the field for Modigliani right now. There are some people competing for that kind of status and position and hopefully, perhaps one day we will have someone who we all recognize.
But right now, there are a lot of people who own Modigliani’s who can’t be helped.
RITHOLTZ: Those could be good value purchases because they’re not – or it could be a waste of money unless you really like it. Let me get to some of my favorite questions. Tell us the most important thing people don’t know about your background.
LAMPLEY: I think it’s the thought that I grew up in London from the time I was 12 until I went to college.
RITHOLTZ: No accent whatsoever. I would never have guessed that.
LAMPLEY: I have no accent so nobody…
RITHOLTZ: And Madonna was there for a weekend and she ended up with a British accent.
LAMPLEY: Bingo. This is always what I say, so the reason I don’t have an accent is because people would show up from like Austin and two days later have an accent and we’d say, “Who are you? Madonna?”
RITHOLTZ: That’s funny. Tell us about some of your early mentors?
LAMPLEY: I was really fortunate as I mentioned before to not have a family where I was expected to follow a conventional career path. I would say that my father was an early influence. He is a sportscaster. He’s had the privilege in his life to do something that he loves and he really made me feel that it was possible to do something that I love as a career.
RITHOLTZ: That’s a really interesting history. Tell us about who influenced your approach to working in the world of art? And the commercial side of it?
LAMPLEY: A lot of people. I have worked with so many great people and I really enjoyed working with Steven Murphy, the previous or recently previous CEO of Christie’s and he was someone who was a really inspirational leader and created great opportunities for me at an important moment in my career.
RITHOLTZ: What are some of your favorite books? Be they fiction, non-fiction, about art or anything else and by the way, this is everybody’s favorite question. The listeners want to learn about new books or books they may not be familiar with.
LAMPLEY: I fear my answer won’t be surprising enough then. I am a great lover of fiction of great novels and I am you know, the corrections, great like midi right now? What am I reading? I am reading “The Nix.”
RITHOLTZ: Who wrote that?
LAMPLEY: If I could only remember. It’s like a first time novelist, I think.
RITHOLTZ: Any favorite art books? There are many to choose from.
LAMPLEY: “The Life of Picasso” is pretty good. John Richardson, you can’t beat the life of Picasso for being not only informative, but saucy and gossipy and scintillating. Picasso’s life is richly entertaining.
RITHOLTZ: And give us one more fiction that you’re reading?
LAMPLEY: Oh I have – if I could only – oh I read, “A Little Life,” who didn’t love that book? It was devastating.
RITHOLTZ: “A Little Life.” All right, let’s talk about changes in the art market, what is different today than 20 years ago and is this a good thing?
LAMPLEY: So many things. It’s so much more global as a marketplace and that’s definitely a good thing. And it puts – it changes the way that we appreciate art and we’re now seeing or exposing and publicizing great regional works, almost to the same degree that we are great examples of the cannon sort of overall.
I think that there was a much more Western perspective in the past.
RITHOLTZ: Tell us about a time you failed and what you learned from that?
LAMPLEY: I was challenged by working at a museum in my early career and it was a surprise to me at the time because it wasn’t that the work was hard, in fact, it was that I wanted to work harder, but there wasn’t a place for it there at that moment and it was – I was really limited by the fact that I hadn’t completed my PhD in terms of what type of work I was engaged to work on and that was part of what motivated me to work in a more commercial business minded environment because it felt more meritocratic.
I wanted to work hard and I wanted to work somewhere where that was innately valued.
RITHOLTZ: You have a fun job. Tell us what you do for fun outside of the office.
LAMPLEY: I have two kids, so that’s pretty fulltime in my non-working time. Two kids under the age of five, two boys, so I get a lot of exercise just hanging out with them. I also like to spin.
RITHOLTZ: What sort of advice would you give somebody who is a millennial or a recent college grad if they came to you and said, “Hey, I am interested in a career in the world of art?”
LAMPLEY: So I have that conversation a lot and I always look forward to it because I try to be more candid than I feel either people were with me or actually, I think I just didn’t ask enough and it’s usually, you know this isn’t any easier than any other field, you have to really love it. There is a scarcity of opportunity here. It’s an oversubscribed career path. There are so many people coming out of school with Art History degrees and if you do love it, then take any job that you can get and keep going and it will inform your next step.
RITHOLTZ: And our final question, what is it that you know about the world of art today that you wish you knew back in 2004 when you first getting started?
LAMPLEY: That’s such an interesting one. I speak Mandarin.
RITHOLTZ: Oh really?
LAMPLEY: I wanted to learn Japanese as a kid and because I thought it was an interesting culture, not because I was so business minded, but there are incredible opportunities in the art world right now in regional markets.
RITHOLTZ: Especially Asia.
LAMPLEY: Particularly China.
RITHOLTZ: You were in London, did you want to spend more time in Asia? What would you have done different if you had a perfect – other than collecting certain works? What would you have changed in your career path had you known how the future would unfold?
LAMPLEY: You know, I think I could do what I do, but also connect – it’s very difficult to connect authentically with collectors without speaking their language and that makes perfect sense. And I respect that, but if I want to really help collectors in any other part of the world, I need to speak their language.
RITHOLTZ: That’s quite interesting. We have been speaking with Brooke Lampley. She is the incoming Chair of Fine Arts at Sotheby’s. Thanks, Brooke. Thank you so much for doing this.
If you enjoyed this conversation, be sure and look it up an inch or down an inch on Apple iTunes, Sound Cloud, Overcast or Bloomberg.com wherever finer podcasts are sold and you could see any of these other 170 or so such conversations that we’ve had. We love your comments, feedback and suggestions. Write to us at MIBpodcast@bloomberg.net. I would be remiss if I did not thank my crack staff who helps us put together this conversation, Taylor Riggs is my booker, producer. Medina Parwana is our audio engineer. Michael Batnick is our head of research.
I am Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.
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