Friday, October 10, 2008

Government seizes control of Singer & Friedlander

No, the Government has no ambitions about running major art competitions.

This post is about the impact of the banking crisis and the looming recession on the sponsorship of art competitions and prizes.

Drawing a Head 09.10.08.
16" x 11.5" pen and ink on Canson Bristol Board

copyright Katherine Tyrrell

Singer and Friedlander last sponsored the Sunday Times Watercolour Competition in 2007. Its long term sponsorship of the competition led many people to refer to it as "the Singer & Friedlander".

After the bank was taken over by the Icelandic Bank Kaupthing, the decision was made to curtail the sponsorship.
The merchant bank Singer and Friedlander sponsored the competition for many years - hence the name - but were taken over by an Icelandic bank Kaupthing who decided not to continue with the sponsorship. However not before they produced a jolly nice page on their website about the 2007 competition and all the prizewinners (with images).
Making a Mark - The RWS / Sunday Times Watercolour Competition 2008 invites entries
(16th April 2008)
On Wednesday, the Government exercised its new banking controls and decided to curtail Singer & Friedlander. It seized control of the bank - Kaupthing Singer and Friedlander Limited and appointed individuals from Ernst & Young as Official Administrators after it learned that the bank could no longer exercise its obligations to depositers.

You can read more about it here on the website and in the Times Online article Singer & Friedlander plunges into administration

Unfortunately it appears that all past online image records of the competition have also been lost. The link in the quotation from one my blog posts earlier this year now only produces a 404 page.

Competition websites and sponsorship - the need for a dedicated website

First off - can I make a big plea here for all major competitions to
  1. Create a dedicated website with a dedicated domain name - one that can survive irrespective of the fortunes of either sponsor or administrator
  2. Make sure the website forms part of any sponsorship deal and is maintained in good order by the sponsors.
  3. Transfer website host account and domain name to new sponsors or their agents as sponsorship changes.
If that had been created for the Sunday Times Watercolour Competition we would now have a record of all the prizewinners over the years irrespective of which organisation is the sponsor. Sadly that's now not the case.

Future sponsorship for art competitions and art prizes

In the past the banking and financial services sector has been a great and magnanimous supporter of the arts generally. Companies have sponsored some major art competitions and a whole host of art prizes within different art societies - and naturally raised their profiles with people who buy original art.

I'm not suggesting that banks are going to pull out in any wholesale way of continued sponsorship. Quite the contrary in fact. Some of the current sponsors will become even bigger as they take on board responsibility for administering customer accounts and deposits from the banks who have got into trouble. Indeed I note that ING (sponsor of the ING Discerning Eye competition) has just taken over some of the customers and deposits from Kaupthing.

However, on the day after that the Dow falls to a new 5 year low, the FTSE continues to slide (another 10% gone this morning) and markets across Europe are in freefall, it must be the case that there will be more examples of companies running into the buffers - from right across the economy.

A number of sponsorship deals are agreed for a period of years - but such agreements are only good for as long as a company can continue afford to operate as a sponsor.

Ultimately, what it all means is that there will be a much smaller pool of sponsorship funds available - in terms of both sponsor organisations and their largesse.

My predictions
  • A major change in sponsorship - There will a major change in the shape of financial services' sponsorship of both art competitions and art prizes in the next couple of years as both sponsors and the art economy have to get to grips with the fall-out from the current debacle and the ensuing recession.
  • Recession bites: Sponsors outside the financial services sector will also fall by the way side as recession bites and companies have to look for economies. It's the 'safe but boring' companies which survive intact during a recession (ie we still have to eat!)
  • Corporate scrutiny: Sponsors in the corporate sector are going to be looking very carefully at what they get for their money. That means that it's very likely that those hosting or administering art competitions and art societies are going to have to compete for more limited funds from fewer sponsors in a way which they've never had to do before.
  • Corporate versus individual sponsorship: We may well see a change in the ratio of corporate and individual sponsorship at the top end of the market for sponsorship. After all, individuals don't have to account to their Boards or shareholders for how they spend their money!
  • Oligarch as sponsor - Following in the path of Russian and Chinese financial support for ailing banks in the western world, I'm now expecting to see some Russian and Chinese oligarchs becoming very interested in sponsorship of the arts. It's no coincidence that the Saatchi Gallery opens today with a display of new Chinese Art.
  • Opportunity - This is a huge opportunity for those who can show sponsors what they can do in a very business-like way. Sponsors are no different - it's all about value for money as well as prestige at the end of the day.
Let me know what you think.

Note: My drawing class started up again a couple of weeks ago. This drawing is from last night's class and has been drawn in pen and archival pigment ink. You can seem more from the Drawing the Head series on my website.


Tina Mammoser said...

A very interesting aspect of art competitions that I actually hadn't considered. Have to give it some more thought... I would say that I think the art competition organisers themselves should maintain control of a website though. Hosting and such shouldn't be handed over sponsor to sponsor. Having managed websites for artists in the past it's very easy for someone to not transfer ownership in time and lose a site or a domain. Sponsors shouldn't have this control or responsibility. Hopefully that's taken as a positive perspective, hopefully most sponsors wouldn't want to take on the running of another site as long as their brand and reputation was well-represented on the show's own site. A very clean, professional web design for the show from the start should be able to meet that goal.

It will be interesting to see what happens. I know this year's watercolour show was not a success sales-wise, with sales much down on previous years even considering the change in venue. That seemed to happen regardless of sponsorship. (I'm afraid some of us do consider sales figures of primary importance in these things.)

Making A Mark said...

I maybe should have made it clearer.

What I mean the creation and maintenance of a dedicated website should be an essential and important part of the sponsorship deal. Ideally one which also permits people to signify interest in buying an artwork.

So the website would probably be passed between administrators but there would need to be some defined agreement as to who is "principal" and who is "agent" in any website arrangements. Said because I've seen some sponsors with very much better websites than those run by some administrators!

Sales are down everywhere. I've not been to an exhibition since the summer where it doesn't look as if sales aren't being affected by what's going on in the marketplace.

I've also seen a lot of art which is now beginning to look a tad overpriced - and that's also bound to affect sales.

If galleries and organisations supporting competitive exhibitions don't get as much revenue from commissions then sponsorship is going to be even more critical - at the same time as it's likely to go through what seems likely to a fundamental and structural change.

Making A Mark said...

Another thought!

Somebody said to me recently that it's a great time to buy art. To which my thought was "Yes but only if artists price realistically relative to alternative choices for spending."

Just as property prices have a 'natural' relationship to salaries (ie starter homes should be affordable with a decent sized deposit) so the price of decorative art has a relationship to, for example, buying commodities for the home. Whatever price band you're in, there will be a notion about what else you could choose to spend your money on.

It may well be that some artists have been able to sell at "bubble prices" to people who felt wealthy because their property was 'worth a lot' due to a bubble valuation.

Personally my view is that pricing in the whole marketplace has been completely distorted by the bubble and is in need of a good shake-out! There's a poll on the Guardian today which suggests that 85% of people think property prices need to keep coming down - and I think they're absolutely right. I'm genuinely sorry for all those people who are going to have negative equity, however I was even more sorry previously for young people who couldn't afford to leave their parents home or have kids because of property prices which as you well know Tina have been completely ridiculous in the south east.

I'd recommend artists keep getting out to exhibitions and keep looking at what's selling and what's not and to keep testing different markets to find 'the market price' at which their art sells.

There's only one certainty at the moment - and that is that it's "all change". Nothing is going to be the same - pricing, sales, commission and sponsors.

Tina Mammoser said...

I agree about property, and am very sorry to those out there who will be affected.

Pricing is a whole other issue. The problem is if someone was pricing based on a bubble or other luxury goods pricing, rather than based on their experience level and place in the gallery marketplace, then those price levels are unestablished and probably will have to come down. It's a hard lesson to learn. By the way, I've had the best summer sales figures in 8 years. There's no predicting these things!

Interesting point about sponsorship being more important if sales are down. Then if sponsorship doesn't seem as financial viable to potential companies, well it becomes a vicious circle doesn't it? With so much of public money already going to the olympics and sport under the Art and Culture umbrella funding may be harder to secure from that route too. It will be an interesting few years ahead of us for public exhibitions and projects.

Making A Mark said...

I think that's the main problem.

When people talk about prices they seem to behave as if everybody is in the same place and the same principles apply to us all, whereas in reality:
- we all live in different places (well you and I don't even if a Rather Big River divides us!)
- people make art in different media
- people make art in different ways (eg realism vs. representational vs. abstracted vs. abstract)
- some artists have 'concepts' and some don't (if this matters!)
- - people are at different stages in their art careers. Some are well established while others are starting out
- some always undervalue their work while others always over value!
- and we all have buyers who like different things!!! :)

It looks simple and is complex and how the differences are going to move is anybody's guess right now! I think the main thing to be wary of is being overpriced if you don't have a strong client list and a good sales record.

I'm a great believer in going out and looking at current exhibitions, looking at what subject/media is selling at what price and then researching the artist to see how well established they are. It can tell you an awful lot about benchmarks.

Plus listening to the opinion of gallery owners also helps!

Anonymous said...

I must say, I find your overall "economics of art buying" commentary very thought-provoking and these recent posts particularly so. Although where I’m from (Saskatchewan, Canada) is in the midst of an economic upturn (oil and resource-driven) and is one of the few regions in Canada that is experiencing growth instead of the slowdown affecting the rest of the country:
I admit I’m rather nervous about how long our buffer will last, particularly as the word “recession” has now been applied to the economy of the United States, our largest trading partner.
I’m in the midst of final preparations for a large regional show/competition and have also wondered over the past several days what, if any, impact I’ll see in attendance and sales. While this show is largely organised and funded by the Saskatchewan Wildlife Art Association there are several prizes and special competitions within the show that have corporate sponsors. I'm very curious to see if they announce their continued sponsorship for next year's show (as they usually do during the current show).
I attended the show last year, and I did rather well, both sales and prize-wise. Several people (other artists and collectors) commented that my art was "undervalued" - I should raise my prices this year. And until very recently, I had seriously considered doing so.
However, because many people coming to the show aren’t from Saskatchewan, I'm reluctant to raise my prices at this time.
Thanks again, for your excellent posts.

Making A Mark said...

Thanks for the comment - and I'd love to see wildlife art from Saskatchewan but unfortunately the website seems to be having a problem

Olha Pryymak said...

This is unfortunate but an obvious consequence of the economic downturn. Sales will fall short, great time to invest in working on the quality of one's artwork (well at least for me it's an issue :).
What really cracked me up was the point on oligarchs - coming from the place (Kyiv, Ukraine) where there are most of them from, I know for a fact they keep their money to themselves. Or at least they recently did, until it became recently popular to buy the highest priced art on the market. They are not the people who will deal with anything else that is not high profile or inflated ( as per your comments on pricing). I don't want to sound pessimistic: one out of the mass of the oligarchs Pinchuk (who's wife also paid the highest price for a London flat on record) established a modern art center bringing to Kyiv last year's London blockbusters: Hirst, Gormley among others. Given all mentioned above, interesting reshuffling of the art market is ahead of us.

Making A Mark said...

Re. the oligarchs - it was the prestige factor I had in mind..........

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