11/10/2018. Sotheby’s display “Love is in the Bin” the artwork created when Banksy’s “Girl with Balloon” shredded itself after being bought at auction.
That's torn it: the part-shredded Banksy original "Girl With Balloon" © Charlie Bibby/FT

If 2017 was the year of an eye-popping Leonardo, then 2018 will go down as the year of the jaw-dropping Banksy. Both works held a mirror to the market that sold them.

The Leonardo, bought for an unprecedented $450.3m (with fees) in November 2017, encapsulated the market’s extremes that year, and — in retrospect — marked its peak. That this work has been mysteriously off the scene since, despite being promised for exhibition at the Louvre Abu Dhabi this year, also sums up the opaque workings of the multi-billion-dollar art world.

Banksy, possibly trying to turn it all on its head, managed to engineer the live shredding of his sold painting at a Sotheby’s auction in October, adding to the value of the semi-ripped work, which had already sold for a steep £1m with fees. Whether revolutionary or a smart stunt, the act has proved a fitting précis of this year of distracting spectacle. Certainly the market has been no less noisy in 2018 and initiatives that tend towards heavily marketed gimmicks have stolen the scene.

These have included a painting generated by an algorithm that sold for $350,000 ($432,500 with fees, est $7,000-$10,000) at Christie’s in October and a lottery for 100 editioned works by the graffiti-artist Kaws, priced at $65,000 each, that all sold within 10 minutes at Pace Prints in Art Basel Miami Beach, according to The Art Newspaper.

Meanwhile, the fintech jargon has been unrelenting: galleries have offered art for cryptocurrencies, artists have made blockchain-based collectibles, and, in the summer, an Andy Warhol painting was divided up for sale into crypto-based tokens, the latest well-hyped (but disappointing) stab at “democratising access to fine art”.

Some of the technological initiatives have genuine potential. In November, Christie’s became the first major auction house to apply blockchain technology to its consignments when it sold a collection of 20th-century works with encrypted provenance records via the Artory Registry. Machine learning, which tracks preferences online, is also proving fruitful. This year Invaluable, which hosts thousands of auction houses online, says it made personalised recommendations for more than 2.5m users and that its data show a 27 per cent higher lot value for works bought this way. For smaller players, the hybrid model — which combines online sales with a programme of pop-up exhibitions — seems the most viable right now.

But no one has broken the mould. Small and medium-sized galleries are still struggling to keep pace while the blue-chips are increasingly in a super-league of their own. Meanwhile, the owners of major art fairs look fragile. Frieze’s majority investor, the Hollywood agency Endeavor, says that, since the murder of the journalist Jamal Khashoggi, it has been in the process of unwinding a $400m investment made by Saudi Arabia’s sovereign wealth fund. Art Basel’s owner, MCH Group, has announced a cost-cutting exercise that includes an exit from its smaller, regional fairs.

David Hockney's "Portrait of an Artist (Pool with Two Figures)," Thursday, Sept. 13, 2018, in New York. One of the British artist's famous "pool paintings" will be auctioned at Christie's in November, and is considered one of his premier works. Christie's has estimated the work at about $80 million, but says it expects it to sell for more.
David Hockney’s ‘Portrait of an Artist (Pool with Two Figures)’ (1972) © Christie's

At auction, full-year sales have nudged up on 2017 (11 per cent at Sotheby’s, 6 per cent at Christie’s), but it has been a year of not quite hitting the highest notes. There was talk of the three-day and online Rockefeller auctions becoming the first $1bn single-owner art sale at Christie’s in May, whereas these only mildly exceeded expectations when they made $832.6m (with fees). Also at Christie’s, a David Hockney painting, “Portrait of an Artist (Pool with Two Figures)” (1972), was offered without a reserve or guarantee, to encourage excitement beyond its $80m price tag, and in October sold for exactly $80m ($90.3m with fees).

Earlier in the year, Modigliani’s 1917 “Nu couché (sur le côté gauche)” came to market at Sotheby’s with the highest public estimate for a work at $150m but didn’t quite make it, selling for $139m ( $157.2m with fees) to one bid, from its unnamed guarantor.

Sotheby’s New York Impressionist & Modern Art Evening Sale Auction 14 May 2018 Public Exhibition in Hong Kong on 25 & 26 April Public Exhibition in New York opens 4 May Lot 18 Amedeo Modigliani Nu couché (sur le côté gauche) Signed Modigliani (lower left) Oil on canvas 35¼ by 57¾ in.; 89.5 by 146.7 cm Painted in 1917 Estimate in excess of $150 million
Amedeo Modigliani’s ‘Nu couché (sur le côté gauche)’ (1917) © Sotheby’s

These are still milestones — Rockefeller’s estate is the highest single collection sale by some degree, the Hockney is a record for a living artist, and the Modigliani made the highest public price of the year — but prices began to come down from their lofty heights this year. Greedy estimates at the top end, exacerbated by guarantees that push the idea of value to its limits, have proved too much. Sotheby’s had two high-profile guaranteed works leave a hole in its finances because they didn’t quite make their already-high estimates: the Modigliani and Picasso’s 1932 “Buste de Femme de Profil (Femme écrivant)”, which sold in London in June for £24m (£27.3m with fees, estimated at about £33m).

Emerging from it all has been an encouraging emphasis on art by women, non-westerners and people of minority ethnicity in 2018. An auction record was made for an African-American artist when Kerry James Marshall’s “Past Times” (1997) sold for $18.5m ($21.1m with fees) at Sotheby’s in May. The artist also had a well-received exhibition at David Zwirner gallery, which closed in London in November. Jenny Saville became the highest-priced female artist when her monumental “Propped” (1992) sold ahead of expectations, for £8.3m (£9.5m with fees) at Sotheby’s in October. It’s not a patch on the price of a Hockney, but these are baby steps in the right direction.

Kerry James Marshall, Past Times (est. $8,000,000 - 12,000,000USD), LOT SOLD. $21,114,500 USD
Kerry James Marshall’s ‘Past Times’ (1997)
Jenny Saville’s “Propped” (1992) which sold at Sotheby’s for £8.3m (£9.5m with fees), making Saville the priciest living female artist at auction. Credit - Sotheby's
Jenny Saville’s ‘Propped’ (1992) © Sotheby's

Looking ahead, revisionism, introspection and a gentle social awareness seem to characterise the mindset going into a quieter year, certainly on the public art market. Buyers will also take cues from the dramas of Brexit and political risk and uncertainty elsewhere as they play out. Guarantees aren’t going away, but I would expect these to be attached to more conservative works into 2019 — witness their judicious application to Old Master works in the latest London season. “There’s great caution amongst our clients. Art is still attractive, but it’s all about currency and liquidity, security and safety, and peace of mind,” says Heather Maizels, senior adviser to the international private wealth lawyers Charles Russell Speechlys. “Right now, nobody can afford to lose money.”

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