The Art Market is a Scam (And Rich People Run It)

Writing by Sam Denby
Research by Sam Denby and Tristan Purdy
Editing by Alexander Williard
Animation by Josh Sherrington
Sound by Graham Haerther
Thumbnail by Simon Buckmaster

Select footage courtesy Getty and AP; Select imagery courtesy Geolayers; Select music courtesy Epidemic sound

[Wheezr]

Imagine if we made art digital and sold them as tokens for exuberant prices despite being able to be downloaded as a JPEG. That would be nuts.

[Elendrian]

The art industry is full of brilliant accountants, not artists.

[Tsukaiyo]

Why do regular people want to be part of the rich-people art market? Just find an artist whose work you like and buy from them/commission something. That's how you support real, living artists

[oyuyuy]

A friend worked for a somewhat famous artist. He ended up drawing his art and got paid $10/h, while the artist just signed the paintings sold them. Some went for $100k+...
So yeah, it's a complete nonsense-industry.

[jay-tbl]

Thankfully with NFTs, us working class people can get scammed too!

[cameraman]

42% of art is correctly valued. I'm frankly surprised honesty is so high.

[bettermetal]

Imagine selling something for a few thousand dollars and thinking you got a good deal just to see it be sold for a few hundred million

[Evan.the.Butler]

For most artists, it's hard to even get minimum wage since it takes a lot of work and they're often asked to draw for free. And yet a stick figure could be sold for millions by manipulating the market. It's insulting to most artist's skill and effort, imo

[ShortHax]

I’m a simple man, I hear tax evasion, I keep listening

[TracksideViews]

Next: The logistics of transporting expensive art

[lancecahill]

Years ago, ABC's 20/20 had some children painted some pairings and presented them to arts appraisers without telling them who the "artists" were. The result was hilarious as the appraisers went on and on about how sophisticated and valuable the paintings were!

[mattakubodimasen]

As an art student at a traditional fine art academy, I can testify that rich people can make art themselves too. They certainly don't lack talent, but when put in comparison with others on the same or better overall abilities, they have a distinct advantage which is their connections. I know families who put all their children into this field because they have been successful and can propel their successors. I have seen paintings that would normally get a C or D sold at an astounding price for a freshman student with average skills while self made ones with works that I believe can already be in the industry struggle to find sales.

Fortunately I don't intend to follow into the traditional fine art industry, having no connection to insiders myself and knowing now how the stereotype "talented struggling artists" came to be. However, it still saddens me to see art being treated like this.

[tootsiebitter]

This is so much money laundering in the art market. Mexico in 2012 put limits on what could be spent on a piece of art and demanded auction houses and galleries require more information on who was actually doing the buying. In one year since that law was in place prices dropped 70%. Drug cartels no longer were interested I guess!

[ethannilsson]

I've been a Wendover fan for years but I gotta say... this episode is a masterpiece. Bids start at 3 million.

[jerrycargill]

On the other end of the spectrum, small galleries in NYC, Chicago, SanFran, etc. they've been shutting down in droves over the last 20 years. Sometimes it's that the owner(s) get bored, or go broke. As an artist, you put your work up in those galleries, the show opens, people come and drink wine and socialize, your art is babysat for a month, then the gallery gives you your art back and it goes back into your storage unit or your mom's wall. This is the reality for most artists. The best solution for artists is to gift, sell to or trade with people you know, who want your work for this simple reason: they like your work for how it looks and how it makes them feel when they look at it.

[asrtemps]

That is why I personally think why a lot of expensive modern art pieces are getting weirder and uglier. It seems what’s being boosted is the controversy factor, it’s just faster to promote. So they don’t care if technically the artwork is lazily made, as long as there’s a backstory of the artist, some wow factor like touching on controversial subjects, they can work easier to inflate the price. Honestly this sickens me, because I see so many talented artist who spends hours to master their medium and to give their labour of love through their art, get shadowed by a bunch of lazy well-connected artists, who couldn’t care less about mastery, because it wasn’t for labour of love in the core that they do it. It’s really just to be part of the cabal and make big money.

[msherd]

I actually work at Christie’s auction house and can affirm that Sam’s description of how auctions work is spot on so kudos for doing your research! My only two notes is that a) just because a rich person wants to donate an artwork to a museum at a certain value, doesn’t mean that museum will blindly take it. Art is expensive to store and take care of and even top museums are always strapped for cash, so it can be risky to rely on this method unless you are donating a top blue chip artist. They might not find it worth it to accept certain artists or works B) I’m sure Sam didn’t mean this but the video gives off the impression that the people involved in the art market are just rich people looking to cheat tax codes and move money around, etc and let me tell you the art market is far worse to do that than when compared to real estate, commodities, and other investments. Most people’s art does not appreciate in value especially considering the considerable costs to care for, transport, and store works of art. Most of the buyers I work with are just genuinely interested in art and buy paintings that they like artistically. There are those looking to speculate but most dealers dislike this kind of client and it’s considered almost to be a faux pas. Obviously I am coming at this with some bias but just my two cents!

[JPRD]

I always thought it was hilarious that auction houses had their own appraisers, even for less shifty markets.
"So, you are the recognized authority to determine how much it's worth?"
"Yes."
"And you work for the auction house that's auctioning it?"
"Yes."
"And the auction house makes a tidy profit if it sells high enough?"
"Yes."
"Seems like a pretty self-fueling cycle, isn't it?"
"Exactly!"

[chelSEY]

Very interesting, although one sin of omission--you didn't mention that one of the most negative consequences of this racket is that art galleries and museums can't afford to compete for these paintings now, which means the general public can't see them. They disappear on to the walls of billionaires as conversation pieces and status symbols, or into their bank vaults to be seen by no one.

[GeaForce]

I used to believe the art market was just a sorry excuse to launder money. Now I know it