The Einstein Collection
A tour of the Fredrick R. Weisman Collection is available by appointment only.

Too valuable to share

As art becomes too expensive for museums to buy, private investors are capitalizing on the inflated art market and thereby limiting accessibility to today’s great contemporary works

Under the shadow of the iconic J. Paul Getty Museum in Los Angeles lies a non-descript suburban-esque house. Inside is one of the great contemporary art collections in the nation. A collection that the public may never be able to see in its entirety.

Clifford and Mandy Einstein's collection might rival some of the work displayed across town at the Los Angeles County Museum of Art, but across the nation museums are having difficulty accessing major contemporary works. This is primarily due to a hyper-inflated art market that attracts buyers able to purchase objects valued beyond most museums’ annual acquisition budgets.

While philanthropic art patrons are sometimes willing to loan seminal works to museums, rising insurance costs and liability add an additional financial burden to the host institutions. This is especially true for small and mid-size museums. The result is that fewer groundbreaking contemporary works are making their way into the public view.

Los Angeles pop artists such as Ed Ruscha, celebrated on both the national and international art scenes, can sell their works in the multi-millions. Christened one of artnet’s “Top 10 Most Expensive Living American Artists at Auction 2015”, Ruscha’s text piece SMASH (1963) recently sold at Christie’s 2014 fall auction for $30 million - a price far too high for most museums to afford. Such instances are becoming more and more common in today’s hyper art market.

The United States’ contemporary art market has exploded since the early 2000s. According to a 2015 artnet report, total annual auction sales for living American artists jumped from $200 million in 2005 to nearly $1 billion in 2014.

The average auction price of individual contemporary pieces has also risen to unprecedented levels. In 2014, the average piece cost over $60,000, up from a decade low of approximately $20,000 in 2009. Critically acclaimed or trend pieces may sell in the millions. These costs are pricing out museums, particularly smaller institutions.

The rising prices are causing large and small museums to rely on creative ways to secure major contemporary art works for their collections. Sydney Picasso, daughter-in-law of the famous artist, and established curator and modern art critic, has also noticed the changing trends. “What’s happened with the art market is that the work gets pushed up and it becomes almost impossible without a gesture from either the dealer or the seller to make sure the work is going to museums,” she says.

In 2014, artnet noted that American museums bought more than 12,000 pieces but received about 75,000 pieces through donation or bequest. The high prices mean that most institutions cannot afford to purchase the artwork outright, and must rely instead on philanthropy to add to their collections.

One such philanthropist, Clifford Einstein, considers art vitally important to the social, political and cultural fabric of society. Einstein has lent pieces in his collection to museums around the country. “If you can share music, if you can share art, if you share an appreciation of architecture or things that are universally interesting to people, you open up all kinds of doors and you can then get to other political discussions,” he says.

Robert Vargas, a Los Angeles muralist who has shown his work both in museums and on the streets, uses his art to engage the public in his creative process. Vargas feels that Los Angeles mural art is in the midst of a golden age. “We’re New York in the ‘80s, we’re Paris at the turn of the century,” he says. Contrary to the majority of artists who can be found on best-seller lists, Vargas makes the street his studio by using passersby as models. He believes that engaging with the public is not about the money. “If they can’t afford the piece, that’s fine. This isn’t commerce based, that’s not what this is about. It’s about being present, about being here right now and sharing in this creative energy.”

Einstein sees street art as a natural avenue to the galleries. “Street art simply expresses the old ‘high-low’ cycle,” he says. “There’s sort of a cyclical movement where [the] leading-edge people who have that fashion gene, that cool gene, that hip gene, they look in places where people who are comfortable don’t look. They look in untraditional places and that’s almost always in the ‘low world’, the street. You go and look at what unfettered, pure, high-energy people do. And that then permeates up and becomes that,” he describes, pointing to a contemporary piece hanging in his entryway. “Basquiat being the example.”

Street art may be a gateway to gallery showings and museum pieces, but Los Angeles murals are far more accessible than their more critically-heralded counterparts. When an arts patron loans seminal works, institutions, especially the smaller and mid-sized ones, are able to show art beyond the limitations of their own collections. However, the borrowing of premium works leads to rising insurance costs and liability and often becomes cost-prohibitive. The result is that fewer groundbreaking works are making their way into the public view.

Billie Milam Weisman, director and curator of the Los Angeles-based Frederick R. Weisman Foundation, allows two-thirds of the Foundation’s collection to be lent out. The Foundation requires the borrowers to be responsible for the insurance costs of the work. To that end, high insurance prices are beginning to limit smaller institutions’ ability to show major pieces.

Currently, a major piece of contemporary art can cost thousands of dollars to insure, far beyond the carefully-planned budgets of smaller museums. As a result, loan requests often need to be modified regardless of the willingness of the owner to show their pieces publicly. “We have been asked to remove a few pieces from exhibits because they are too pricy for their insurance,” Weisman says. “This has happened a lot.”

Curators have to make tough decisions on what they will display. Weisman described the dilemma, saying, “I have to weigh out what’s more important to see. Is it more important to see [a] Ruscha, so show a smaller example, or take that one out and show the Irwin? But it’s a tough decision. It’s hard curating shows because of all of these limitations.”

According to Victoria France, an insurance broker from Robertson Taylor Entertainment Insurance, “Pricing insurance for major works of art is very complex. One must take into account numerous factors. For example, the fragility and uniqueness of the item; length of exhibition; the distance an object will travel and type of transport; and the specific requirements of the donor. Insuring the Dead Sea Scrolls is very different from insuring a Picasso. Terrorism and earthquake insurance are often added to the premium as well.”

The Einstein Collection
Clifford and Mandy Einstein own an impressive collection of work in their home.

Because contemporary art is appreciating so quickly, many museums that schedule shows two to three years in advance must adjust their exhibits when it comes time to receive the works. Susan Bellah, director of the Carnegie Art Museum in Oxnard, works closely with the Weisman Foundation to mount major exhibitions featuring many of the Los Angeles elite artists. “There have been times where I had to adjust my exhibition selections based on the increased cost of insurance,” Bellah laments. “We are a small museum and our budgets are very tight.”

The rising value of art is causing investors to think twice about their purchases. Edward Cella, a Culver City gallerist, says these trends are affecting the way that people buy art. “There are those who are using a sort of momentum strategy to look at art from an investment perspective with the idea of acquiring and perhaps selling art at a certain point for a financial benefit. We all would like that on some level. We all would like to think that the objects we buy retain their value over long periods of time.”

But Cella warns, "It’s kind of a troubling thing when you think only of money in relationship to objects. I feel very strongly that an artist’s work is like a poet. We don’t measure poetry by how much revenue an artist creates or what the royalty check is going to be or how much their book of poems is awarded in advance by their publisher….It always troubles me to think only on the financial side.”

The impact of the inflated art market on philanthropy is staggering. With the largest transference of wealth taking place concurrently, heirs face the decision between donating their art for the public benefit or selling their works in the hope for a financial windfall.

Nancy Escher, a noted fine art appraiser, deals with the rising value of art every day. “The market has changed considerably over the last few years because there are so many new people coming into the market with varying degrees of information and knowledge,” she says. “Generationally, among my clients, I have found recently especially, the people who inherit collections are not very interested in the work. They are seeking advice about what is the best way to liquidate the asset."

The concept of looking at art as an investment rather than a pleasure in and of itself is not new. According to Einstein, “Most people who enter the world of art today can’t help but be interested in, ‘well I heard that you bought that and one or two years later you sold it for five times more, how can I do that?’ So they’re not saying what should I buy based on what I want to look at, they’re saying what should I buy based on will it be valuable because they’ve been told that’s what you should do. Once you taste that, you can’t take it away from them.”

His words reflect a trend. The hyper art market has pushed some artists’ values through the roof, while leaving art enthusiasts to wonder whether some buyers actually like what they purchase, or are simply waiting to see if they can turn a profit.

Escher, however, sympathizes with those who want to sell their art to make money. “When you’re looking at something that could be worth millions, or even hundreds of millions of dollars, it’s pretty difficult to think this is not a bad time to liquidate that asset. Because think of what you could do with that money. I mean, you could save the world with that money… from just one painting.”

A museum's worth of art at home

Clifford Einstein takes you on a tour of the art in his private home

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