$181,000,000 in Warhols.

May 19, 2011 7:39 AM

Andy Warhol always plays a prominent role in the twice-yearly contemporary sales in New York, but this season his work saw a phenomenal turnover of $181m, almost a third of the week's total proceeds at Christie's, Sotheby's and Phillips de Pury. The Economist on The wizards of the Warhol market. Watch for yourself: In the Saleroom: Andy Warhol's Self-Portrait, 1963-1964.
posted by R. Mutt (14 comments total)

That video is fascinating. Thanks.
posted by (Arsenio) Hall and (Warren) Oates at 7:44 AM on May 19, 2011

The four-panel masterpiece features Warhol for the first time a new guise, that of the enigmatic superstar replete with silver hair, wayfarer sunglasses and a blank expression. It epitomizes Warhol’s desire to be a "machine" and is the perfect portrait of mass media and consumerism. (emphasis mine)

Given the actual auction frenzy around the piece, that description is fantastic.
posted by filthy light thief at 7:56 AM on May 19, 2011 [1 favorite]

Question about art as investment purchase. This person purchased the painting for roughly $35M. Let's say in two years they decide to sell the painting for $40M. Do they have to pay taxes on $40M, or just the $5M in profit?
posted by (Arsenio) Hall and (Warren) Oates at 7:58 AM on May 19, 2011

On the other side of the tracks: gun auction.
posted by swift at 8:20 AM on May 19, 2011

Do they have to pay taxes on $40M, or just the $5M in profit?

Assuming you mean the US taxes, then yes, art is a capital asset. They'd pay tax on the capital gains of $5M.

The video made me feel a little bit queasy about the whole process. As the auction was proceeding in increments of the cost of a house it really hammered home how far the world of fine art investment is from the average joe. Every 10 seconds they were raising the bid by 10 nurses salaries or the cost of providing school for a year for 40 kids or a couple of hospital beds... Free market capitalism is funny like that. Rich people can spend there money on whatever the heck they like, and if they're smart, they'll find a richer person to buy it next year.

Assuming, of course, that it was a private buyer. Given the market driven pricing in play here, I wouldn't be surprised if most buyers at the moment are bank-owned investment funds or private investment consortiums.
posted by rh at 8:22 AM on May 19, 2011 [1 favorite]

Indeed, the money paid for enlarged photobooth pictures is amazing. It would seem that someone could even buy a sizable collection of pieces from up-and-coming artists with money like that, supporting living artists and speculating on a larger collection of pieces. But that would be a gamble, where Warhol is a known name.
posted by filthy light thief at 8:48 AM on May 19, 2011

It originally cost $1,600.

Art in America : The story of the evening's star Warhol began with a housewife from Detroit. In 1964, collector Florence Barron commissioned a self-portrait of the artist, paying the $1,600 fee in installments. The result was a striking four-panel painting of a 36-year-old Warhol wearing sunglasses and a trench coat, his necktie askew, looking deadpan and hammy in a sequence of shots captured in the grainy black and white of a grungy Times Square photo booth. Barron died in 1999, and her heirs were last night's sellers.

posted by R. Mutt at 9:06 AM on May 19, 2011 [3 favorites]

The video made me feel a little bit queasy about the whole process. As the auction was proceeding in increments of the cost of a house it really hammered home how far the world of fine art investment is from the average joe. Every 10 seconds they were raising the bid by 10 nurses salaries or the cost of providing school for a year for 40 kids or a couple of hospital beds... Free market capitalism is funny like that. Rich people can spend there money on whatever the heck they like, and if they're smart, they'll find a richer person to buy it next year.

Adjusting for inflation, the original price would have been $11,124 in today's money. That said the art itself was kind of dull. It seems more like collecting memorabilia then collecting art.
posted by delmoi at 10:40 AM on May 19, 2011 [1 favorite]

The video made me feel a little bit queasy about the whole process.

Yeah, the crowd gets touchy when the increments get down to the paltry sum of 100K. And they say that tax rates on the wealthy are as low as ever ...hmmm.

Here's the same thing with different shades of blue, in case you want your own copy. I wonder how many of these Warhol made.
posted by Locobot at 10:57 AM on May 19, 2011

I like that self-portrait. If I had a spare 35 mil I would totally pick that up to hang in my guest house.
posted by Ad hominem at 11:08 AM on May 19, 2011

Wow, to think of how much you could do with 35 million bucks to teach art or create an orchestra or fund any number of artistic endeavors. Amazing what rich people will throw their money away on.
posted by ReeMonster at 2:21 PM on May 19, 2011

What a terrible waste of money. I wonder if the buyer realizes with that sum he could have lit 350,000 cigars with hundred dollar bills.
posted by digsrus at 3:55 PM on May 19, 2011

I believe art is considered a "collectible" and gains are taxed at ordinary income rates, not capital gains rates.
posted by mrhappy at 8:08 PM on May 19, 2011

I believe art is considered a "collectible" and gains are taxed at ordinary income rates, not capital gains rates.

No, all short term (less than 1 year) capital gains are taxed at ordinary income rates not just collectibles. Long term taxes on collectibles is 28% while long term rates on non-collectible capital gains differs based on the income of the person doing to reporting. But it isn't ordinary income rates in any case.
posted by Justinian at 8:55 AM on May 20, 2011