Joyce Owens: Do Collectors Owe Profits to Artists?

Before you get started with this, let me clarify that I am talking about artists who are still selling work at moderate prices through art galleries. The artists whose work can be resold without them even knowing. And not the Kerry James Marshall type artists. He recently sold a painting through his gallery, Jack Shainman, at the Miami Basel art fair for $350,000.00.  I am not speaking of him or the other art giants that we read about.

I am speaking to most artists who sell their work in the hundreds, maybe up to 10 or 20  thousands of dollars. The auction house artists, such as Mr. Marshall,  are another story. I hope we all get there!

jkm.jpg

 So, you think your work is in a great collection and you even have the name of the collector on your bio. This person donates art works to the Art Institute and has a great reputation for collecting the masters!

But a year or two later the collector is incapacitated because of a stroke and his wife has a sale of his collection at a local gallery. You have NOT been notified. You find out because you run into someone who tells you how thrilled they are to have acquired your work from the prominent collection!

Really?

So here is another way that living artists get the screw. Some people, especially artists, think the creator of the original art work or the vendor (gallery) who sold it should be notified when the work is de-acquisitioned. And secondly, that the artist should receive a percentage of the resale price, especially if it sells for higher than the original price. Artists should also know if their work is going at higher prices. The Europeans have laws to protect their artists. And you may think California is flaky on some issues but they have laws to protect artists when their work is resold, too.The artists should also be given the option of buying back their work before it goes to someone else. (article continues).

Here is an excerpt from a 1995 article:  

 

If art is resold, should the artist profit?

by Edmund H. Mantell I INTRODUCTION The title of this essay is taken from the headline of a recent news article appearing in The New York Times.(2) The article described public hearings held in San Francisco. The hearings were conducted by the office of the Policy Planning Advisor for the United States Register of Copyrights, as part of a study on the feasibility of federal legislation to establish mandatory resale royalties applying to works of fine art. The person holding the position of the federal Policy Planning Advisor is reported to have said that the San Francisco hearings carry particular weight because the participants were the people "actually involved" with resale royalties. The pending federal legislation is modeled on a California statute.(3) The California statute was originally enacted in 1976, and was amended in 1982. Subject to certain qualifications,(4) it requires the seller of a work of "fine art" (or his agent) to pay to the artist 5 percent of the amount of the sale price. Important to the functioning of this law is that it specifies that the right of the artist to receive the royalty cannot be waived by the artist unless by a written contract providing for a royalty in excess of 5 percent of the amount of the sale. The evident purpose of the California statute, and its pending federal equivalent, is to increase the income that artists derive from their creations.(5) Struggling artists, so it is argued, should be treated with special solicitude by legislators. The special solicitude should be manifested in a practical way. In view of the propensity of legislative bodies to shun talk of taxing the electorate to provide subsidies to artists...

I think many collectors buy art because they love it and would get a second job before selling off their collections.  But if you find you need to sell, please give the artist the right of first refusal. And give them a 5% cut of your profits which they have earned already by producing the work.

I hope providing a little insight I will encourage all art buyers be sensitive to the artist whose life's work is in their hands. For legal help check with the Lawyers for the Creative Arts- Joyce Owens

 

Note:  Kerry James Marshall photo by Monroe Anderson at Paul Klein's place

Editorial Note: Back in 2004,on the defunct Other Group, we had a discussion on this subject that readers are welcome to view as an additional reference for discussion.

 

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  • Thanks for the post and the links, Joyce. It helped a lot to see how it's actually put into effect.

    Few thoughts, KJM, for example, under this, would get only $14,000 at 4%, not too great. Also, that's a lot of loopholes I see in these links. The European system makes sense because an institution handles it, but private sales are hard to monitor.

    Also, technically, it's a little bit of a one-way street, if you buy work from an up-and-coming artist for $100,000 and 5 years later, you can't even sell it for 20,000, does the artist owe you? Do you still owe 4% of that decreased value?

    What I think is so key for artists is to KEEP SOME WORK from each period of your life. Sadly, sometimes earlier work is valued over later work, so you can't just whip up a new painting and sell it.

    K

  • Kathryn:

    I think you are referring to KJM (Kerry James Marshall). Not sure what your income is, but ONLY $14,000.00 is more than many artists will ever get for ONE painting. I have heard the rich get richer because they think ONLY $14,000.00 profit is worth having, if you earned it. It is a dividend.

    I don't think it necessarily should be a two-way street. When you buy most things they depreciate. Your car, for example, clothing and some other items. On the occasions when the opposite is true the buyer is lucky and/or discerning. I met a composer recently who purchased a grand piano in 1980 for $17,000 that is now worth $50,00.00.

    There is no guarantee art will appreciate, but if they do the artist ought to reap some of the benefits earned for continuing to produce viable work, and maintaining a strong reputation.

    In the post I specifically said I was NOT referring to the $100,000.00 artists but the artists who may earn into the 20 thousands, at most!

    I agree that it is not easy to track these off market sales.

    Some people will do the right thing if they know what that is. So, #1: tell the artist in case they want to buy back the piece, #2 tell the artist and share the small percentage of your profit IF the work goes above the original sale price.
    Artists deserve to know where their work is and for how much it sells on secondary markets.

  • In reply to JoyceOwens:

    Can artists include a request that buyers notify them when they sell or donate the work in their contracts? And/or ask buyers to sign some type of release that would "request" notification of sale along with the sale price for the artists records? This could also request the (standard) 4% royalty fee if sold for the same or greater amount. There may not be a law on the books protecting artists interests... but can't we create our own measures of control over future sales/de-acquisitions? It seems logical to me - but probable that no artist, or very few, do this. We're normally so happy to sell something we don't think about what will happen to that work in the future. Interested if any artists do have contracts or stipulation agreements with buyers. The artist should absolutely not owe the buyer any money is art fails to increase in value - art is one of the riskiest "investments" there is because its value is completely subjective to taste and random market trends. Buyer beware and enjoy!

  • In reply to JoyceOwens:

    This is an interesting debate. Do you think that an artist forever owns his work? Would this be some type of 'royalty' payment system perhaps like in the music field that protects songwriters? Do yo really think this should apply only to artists that are still producing viable work for moderate prices? How does this relate to the estate of the artist and the estate of collectors/gallery owners?

  • In reply to JoyceOwens:

    Back in 1976, before moving to Chicago I had a gallery in California. At the time the 'tithe" we're discussing was proposed I saw it as a tax - an added charge to a transaction - that would impede business. Now, I feel differently.

    Seeing how much artists get the short end of the stick has made my opinion change. The reward system is out of whack. Artists are not getting enough whoever the hell they are.

    They have the right to benefit from their arts' increased value.

    Rationalize it this way. The artist needs to have a vested interest in the art to ensure the curatorial / archival needs after the date of sale.

    The law needs to be structured appropriately: 1) 5% of the INCREASED value of the piece. (If it doesn't get enforced for a transaction, whenever it does you still get the some total $). 2) Applies to artist & HEIRS for some finite period of times like 50 years from the artist's death. 3) It's a federal law. so it's enforced across the board, so the art doesn't go out of state for a transaction. 4) Only applies to increased value (not decreased).

    And yes, erapport, an artist can draw up any kind of contract they want. Sometimes it can prevent a sale. And sometimes it can prevent your art from being altered, besides paying you a % on resale.

  • In reply to JoyceOwens:

    Thanks, Paul.

    Add to this mix that the artist shares 50% or more of the sale price of their work to the gallery up front!

    Good questions from erapport and faye.

    I added the link to Lawyers for the Creative Arts as a means for artists to find out more about this concern and to learn how to create an enforceable contract if they choose to.

    Art is a unique commodity. As I mentioned most other items do not increase in value, but some do, including art works, as the market demand increases. So a young Robert Colescott or Richard Mayhew could sell work for $200.00 sixty years ago and now Mayhew's work sells from around $35,000.00 (for smallish paintings) and up. Colescott, who recently died, must be priced at a million and up by now.

    In my opinion, this is a courtesy that should simply occur when a collector is selling off works produced by living artists. The estate should have rights for an extended period as Paul points out. If the dividends seems too small to be bothered with the artist or designated family member can decide to waive them.

    I think we understand that when it comes to money doing the right thing requires the law as insurance.

  • In reply to JoyceOwens:

    "What I think is so key for artists is to KEEP SOME WORK from each period of your life."

    This is good advice but most artists are trying very hard to sell work from each period of their life. Keeping some work is the least of their problems.

  • In reply to JoyceOwens:

    Joyce, short answer is YES, there should be some form of a royalty structure. But it will need to be set up in law, perhaps via what are now easily accessible barcoding dots that we can impress into our artworks. Briefly such a law was passed in France following the first World War so that the widows and orphans of artists who died defending their country could benefit. Only California has made such a law on this side of the water and it is not much enforced. See my post on the subject at my blog.

    http://rounderstudio.blogspot.com/2008/05/robert-rauschenberg-is-dead.html

  • In reply to JoyceOwens:

    The need to sell, Norbert, is important to artists AND their galleries! I cannot imagine a gallerist advising an artist to hold back some work for posterity! It is something I never thought of. I do have work from various periods. Glad to know this (in case I start selling out everything)!

    Lately, I have kept work for myself because some series do sell well.

    Nancy, thanks for additional feedback on the subject. I provided links here as well. There is a link to the California laws on my original post as well as the European law. Be interesting to know how well they are enforced.

    I think ethics will have to play a role here, as well.

    Please CLICK on links for more information as you go through the post. You can see the Kerry James Marshall piece that pulled big bucks recently as well as the laws for art and the Lawyers for the Creative Arts which is a FREE service for all the arts.

    Your comments help other artists. Please chime in!
    Thanks.

  • In reply to JoyceOwens:

    Hi All,

    First, I want to again thank every single person for joining this discussion. Also, some housekeeping: in the tabs at the top of the screen, one says "Discussion". I try to keep that up to date so you can quickly access the posts that are discussion topics. I'd like the discussions to continue, even as the post gets "pushed down" by more recent posts.

    As for this topic -I still like the English model where an institution has a registery for the artists. To ask a collector to keep track of every artist for whom they own work - including address changes, not to mention the collector's change of address - that would be intense. Lots of artist move often, and a collector could easily have 50+ pieces.

    So with the English system, if you are going to put an estate-worth of artworks up for resale, then the auction house would coordinate with the institution where the artists are registered.

    That system makes sense to me, but having to chase down artist for every transaction, like a $300 painting you give to a friend, that just seems like too much work...

    To respond to Norbert, sure, I too have art in my basement taking up space. But at Gallery Guichard, Calvin Coleman makes 200 paintings a year! He keeps them at a very low price point and they literally sell out. So for an artist like that, he should really keep some stuff, which he isn't able too, because everyone is asking for more.

    So that's a scenario where holding onto work makes sense.

    K

  • In reply to JoyceOwens:

    Coleman's work touches people's souls. He often embeds text to take the meaning of each piece to another level. And yes, I see how he sells out. He also has a technique that might allow him to work fast and produce a couple hundred pieces in a year!

    But consider this, all artists don't have the same goals for their work or for their careers.

    Coleman may be about making money! and art, too, of course. But he may just want lots of people to embrace his work. I don't know if his style has changed over time.

    Here's a website for Calvin Coleman if you want to see his work:
    http://www.calvincolemanstudios.com/gallery.html or

  • In reply to JoyceOwens:

    I remember back a number of years when this subject was the point of a heated discussion. It waxed, waned, and then faded. The results were, obviously, inconclusive. I remember much of the issue revolving around copyrights. Since the art piece itself, if memory serves, lacks the copyright then it tends to nullify royalty awards. Odd, in a sense, as an artist can license out the image for, say, bedsheets and receive royalties in return. So it would seem that unless an art piece can be copyrighted, then the subsequent rights of ownership and provenance are at the buyer/Owner's discretion.

  • In reply to JoyceOwens:

    Gordon: Right!

    Most artists don't, but I understand can, copyright their images. The Lawyers for the Creative Arts will help artists with that. Most collectors assume they own the art work and NOT the rights to reproduction, but a copyright enforces that. The Lawyers for the Creative Arts provide pro bono (free) services to artists addressing these issues.

    In my experience, when I have been asked if my art could be used, it generally resulted in monetary payment or compensation amenable to both parties, for one time use of the image.

  • In reply to JoyceOwens:

    I would LOVE to hear from some art collectors.

    Would you share your profits with the artists? Or do you think the additional income should be yours, like interest on a bank deposit???

  • In reply to JoyceOwens:

    Are art collectors (and curators) actually reading these blogs? (Chicago Now, Bad at Sports, Artletter, Sharkforum, Neoteric Art, etc...)

    Maybe Paul Klein would have more insight to that question...?

  • In reply to JoyceOwens:

    Good question, Norbert.

    Let's hope so.

    We know that art critics limit their reading material, at least according to James Elkins', "What Happened to Art Criticism?"

  • In reply to JoyceOwens:

    Yes, Norbert, collectors are reading these blogs - but inconsistently. Everything is being read by some collector but arts professionals are those who read the most (regularly).

  • In reply to JoyceOwens:

    For those artists who would like to have resale royalties, Artists' Bills of Sale developed by Projansky and Jurrist try to create an enforceable resale royalty:

    http://sites.cca.edu/curatingarchive/archives/000359.html

    The link takes you to the agreements, and you can use them when you sell your works. Good luck!

    They've never developed much of a following, and I think that's in part because they're not very comprehensive and hence difficult to enforce. They lack many elements designed to promote court acceptance that my own Coaccession(tm) system includes.

    Coaccession does give artists a continuing financial interest in their works, but it's relatively minor -- on the order of ten percent of the value. Of course, if the work has appreciated significantly, that ten percent might really help an artist to continue their work. The artist's continuing cultural rights in my Coaccession system's Cultural Title(tm) would be the real attraction, though, and sacrificing those for the money might be a difficult choice.

    Whether artists use bills of sale retaining resale royalties or a Cultural Title with cultural rights, the rights retained are going to somewhat decrease the initial sale price. For a starving artist, giving up some of the current sale price for an uncertain future return can be pretty daunting. Coaccession ameliorates that financial sacrifice a bit, I believe, because Coaccession adds some value -- the sum of the Cultural Title price and the Collector Title(tm) price should exceed the price of the full undivided title -- by keeping the artist's ouvre together in a way that maximizes cultural value, and thereby enhances financial value. So, with Coaccession the artist gets certainty in cultural rights (or will if and when court precedents accept Coaccession), and gives up a bit less than the full value of the Cultural Title. All in all, a good deal even after paying my licensing fee.

    Will collectors buy Collector Titles with only the right of possession? If they trust the artist to use the cultural rights carefully, that continuing link with the artist should enhance their art experience rather than diminish it. Of course, some collectors will want all rights, and will be willing to pay more for the full undivided title. If they do pay more initially, it's harder to argue later that they owe any deference or profits to the artist -- but there will never be a final word to this argument.

  • In reply to JoyceOwens:

    Although no final word and no national legislation on this, I certainly appreciate the additional concrete enlightenment Mark.

    Get your money up front and move on, seems a practical bit of advice. (excuse me for distilling your thoughtful comments too much!)

    I hope everyone goes to the link you provided and reads the files...

    Thanks so much Mark!

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