Tuesday, July 29, 2014

"Anyone who thought that the Corcoran’s dissolution was a foregone conclusion would think again after yesterday’s court proceedings."

A report on day one of the Corcoran cy pres hearing.

I guess it wasn't grand enough

An interesting scoop from Nathan Bomey and Mark Stryker in the Detroit Free Press this morning:  "[C]ity officials quietly formulated a proposal in late 2011 to sell the city-owned Detroit Institute of Arts to nonprofit foundations for $550 million to create cash flow for the city, fund museum operations and transfer ownership so the art could never be sold to pay city debt.  The plan — according to records obtained by the Free Press and never publicly revealed — bears a striking resemblance to this year’s grand bargain designed to protect the DI."

Here's my question.  The collection is worth somewhere between $2.7 and $8.5 billion.  What makes $816 million the "right" number rather than $550 million?  Why not $943 million?  Or $286 million?  Or $1.35 billion (half the low end estimate)?  Where did the "grand bargain" number (816) come from?

The problem with the public trust ...

... is the public.  Why do they have to be so damn interested in seeing the works?

Michael Rushton tweets:  "If only there existed some sort of mechanism for allocating scarce goods with excess demand."

Sunday, July 27, 2014

$8.5 billion (UPDATED)

That's the value of the Detroit Institute's collection according to an appraisal commissioned by one of the City's largest creditors.

UPDATE:   More from Randy Kennedy in the NYT.   Look, at this point the work could be worth $85 billion and it wouldn't make a difference to those opposed to any sale.

Wednesday, July 23, 2014

Interesting Sales Tax Decision (UPDATED)

(How often do you get to say that?)  It involves the dealer Richard Feigen.  He sold a painting in 2004 for $2.5 million and paid sales taxes of $215,000 to the NY authorities in 2005.  In 2011, it emerged that the painting was one of the Beltracchi forgeries.  Feigen refunded the purchase price to the buyer and applied for a refund of the sales tax.  The ruling of the New York Division of Tax Appeals:  too late.  The statute of limitations for sales tax refunds is three years from filing or two years from payment, and in either case it had long expired.  The decision is here.  The NYLJ has a story here.  Feigen vows to appeal.

UPDATE:  The NYT's Patricia Cohen tweets:  "These sorts of shortsighted rulings are unfair on their face and discourage dealers and sellers from doing the right thing."

Tuesday, July 22, 2014

Fair Use Update: It's still a mess

Sergio Muñoz Sarmiento flags a good student note in the Harvard Law Review on the Prince-Cariou decision. The bottom line:  "Because outcomes based on value judgments are difficult to predict, artists will struggle to conform their actions to the law ex ante, and the ultimate outcome may be a chilling effect on the creation of cultural products."  I agree.

Corcoran Update: Nine members of Save the Corcoran get standing (UPDATED 2X)

The Washington Post confirms.  The amusing thing about this one is that the Hall Monitors don't know how to feel about it.  On the one hand, they're against the proposed plan because they're against everything they care deeply about the principle of donor intent.  On the other hand, Save the Corcoran's plan to save the Corcoran involves selling a bunch of art to keep it afloat, which is the most appalling, repulsive, horrible thing anyone has ever suggested.  So they're in a quandary.

UPDATE:  A thorough analysis of what comes next from Kriston Capps.

UPDATE 2:  Capps is gunning to become the first journalist to join my Deaccessioning Hall of Fame.  (Peter Schjeldahl almost made it, but recanted his heresy before we could get the acceptance papers out to him.)  In a Twitter exchange with Christopher Knight, Capps says "There is good reason for Corcoran students to fear being absorbed by GW. Why not balance their future with non-essential works?" and then adds "Plainly, tactical [deaccessioning] can work fine."

Detroit Update: Pensioners vote in favor of Grand Bargain

Detroit Free Press story here.  This was as expected.  The real question is whether Judge Rhodes will force the other creditors to accept the deal:  "Unless the city reaches a settlement with the financial creditors — which would currently get anywhere from 0 to 10 cents on the dollar for their debt — Rhodes will have to decide whether to force them to accept cuts. The financial creditors argue that the grand bargain is illegally constructed to benefit pensioners and diminish the value of the DIA art. They want the city to consider a sale of the city-owned DIA or some of its artwork."

Monday, July 21, 2014

Who's left standing?

There appears to be some uncertainty about the results of today's hearing in the Corcoran matter.  Lee Rosenbaum reports that the AG told her standing was denied to "Save the Corcoran as an organization."  But Save the Corcoran as an organization tweets excitedly:  "Ladies & Gentlemen: We have standing. 9 of our plaintiffs were granted standing today. Trial starts Monday."

Saturday, July 19, 2014

"What makes a real Matisse better than a fake? What makes any original work or art more valuable and special than a copy?"

The Guardian's Jonathan Jones:  "maybe we are at last about to enter the revolutionary age Benjamin predicted, when reproductions become so good that originals no longer have any value."

Resale Royalty Update (UPDATED)

There was a flurry of coverage of the proposed resale royalty bill this week, centered around a hearing of the House IP Subcommittee on Tuesday.  The Art Newspaper's Julia Halperin says the bill is "gaining momentum in Congress."  More here from Artnet's Eileen Kinsella and here from AFC's Henry Kaye.  Nicholas O'Donnell has his usual helpful commentary here.  Despite all the noise, however, GovTrack still gives the bill just a 3% chance of being enacted.

I've been intending to write something more substantial about this issue (maybe if the chances of enactment rise to 5%, I will), but for now there's one point I'd like to make about the current version of the bill.  Though the "smart view" of the issue is that resale royalties are a terrible idea (for roughly the reasons expressed here), I think there are strong fairness-related reasons in support of the idea.  Christopher Rauschenberg had a Huffington Post piece this week where he talked about a work his father had sold to a collector for $900 which the collector later sold for $85,000.  Now imagine a similar example where the later sale was for $8 million.  That's the art world we find ourselves in today.  I think, in a case like that, most of us would have an intuition that that is deeply unfair to the artist and, all else being equal, if there were some way for her to share in that increase in value, that would be a good and just thing.  Now, that's not the end of the analysis -- all else might not be equal and there might be disadvantages to a resale royalty scheme that outweigh those fairness considerations, but I think it's at least worth acknowledging they exist.

But here's the problem with the current bill:  it caps the royalty at $35,000.  So in our example, where the collector sells the $900 work for $8 million or $18 million or God knows what, the artist gets ... $35,000.  I suppose you could say that's better than nothing, but I'm not sure it does very much to diminish the sense of deep unfairness that attaches to the transaction.  And, without that, the bill becomes a lot harder to defend against its critics.

UPDATE:  Sergio agrees:  "If the issue is 'fairness' and just desserts, then why set a ceiling?"

"Japanese Artist Megumi Igarashi Arrested Over Vagina Kayak"

"A Japanese artist who made a kayak modeled on her vagina said ... she was 'outraged' by her arrest and vowed a court fight against obscenity charges.  Megumi Igarashi, 42, says she was challenging a culture of 'discrimination' against discussion of the vagina in Japanese society."

"The current value of the trust’s art collection, Shniberg says, is around $125 million."

Bloomberg's James Tarmy has a lengthy, interesting piece on the Artist Pension Trust, which is getting ready to start selling some work.  I guess the proof will be in the pudding, but I've long been a little skeptical for the reasons Tyler Cowen articulated here.  Cowen's bottom line:

" ... decompose the transaction.  Half of your income stream remains tied up in your own art and thus risky, minus the [28%] of course.  With the other half of your pension you decide to invest in not-yet-totally-famous artists.  Would anyone recommend such purchases on their own merits?  Is that your idea of insurance?"

"Psihoyos's arguments are entirely without merit."

Interesting copyright decision from Judge Kaplan in the Southern District regarding rights in photographs of sculpture.  Let's just say he was not amused by the photographer's arguments.

Ain't it Grand!

The WSJ:  Detroit's Water Cutoffs Spark Protests.