Art Market

How Jeffrey Deitch, Citibank, and Christo Created the Art Market as We Know It

Anna Louie Sussman
Jul 30, 2017 12:00PM

Jeffrey Deitch, Jeff Koons, and Dakis Joannou at the opening of the exhibition “Everything That’s Interesting Is New,” The Dakis Joannou Collection, The Factory, Athens School of Fine Arts, Athens, 1996.


For as long as there’s been art, there’s been money nearby. The Medicis, Florentine bankers, supported Sandro Botticelli, Fra Filippo Lippi, and Michelangelo; Egyptian pharaohs commissioned statues, objects, and murals for their tombs; a rising number of Asian billionaires have jump-started an art market across that continent. But somehow—despite the fact that many of the most prominent collectors hail from the financial industry, works of art regularly command seven figures, and banks are lining up to lend against art—acknowledging the existence of an art market tends to make art world types shift uncomfortably in their seats.

Covering the art market, I’m often party to such denial, or even contempt, when I mention the market in the presence of curators or artists. So when I learned about art dealer Jeffrey Deitch’s early career establishing an art services department at Citibank, where he seamlessly—but explicitly—brought together art and finance, I wanted to know more about how he bridged these two worlds.

“The art business is possibly the most important part of how art is supported.”

“You can’t separate them,” he said, on a drizzly afternoon in his office above Deitch Projects, on Grand Street in New York’s SoHo. “One of the biggest misunderstandings of this is that somehow there’s the art market and then there’s, let’s say, the ‘good’ part of the art world,” such as non-profit organizations or museums, with their educational mission.

“My primary interest is the art itself and being on the side that helps to produce the art,” he said, “but the art business is possibly the most important part of how art is supported.”

At Citibank, Deitch put this insight into practice. In his nine years there, from 1979 to 1988, he pioneered two major industries, art advisory services and art lending, that today are integral parts of the art trade. Rather than disavow the market, Deitch studied it, understood it, and used it to facilitate the work of artists he believed in, largely by encouraging collectors to visit and form relationships with the artists they admired.

“Jeffrey was embracing of the market,” said the artist Jeff Koons, who has known Deitch since the late 1970s. He could see that “it’s not bad if something is sought after and people place value on it.”

That embrace, according to some, has occasionally been too warm. Later in his career, he earned criticism for curating populist shows as the director of Los Angeles’s Museum of Contemporary Art (and sometimes featuring artists he had represented at Deitch Projects), where his business acumen also wasn’t enough to turn around a financially troubled institution.

But Koons noted that Deitch could have had a far more lucrative career had he focused simply on brokering high-end deals in the secondary market. Instead, Deitch has largely focused on helping artists, especially young ones, find their way. “Jeffrey knows very much but about the economics of things,” said Koons, “but yet he’s really put his energy to being at the service of young people…to be able to help people find their way and start off, to find a platform.”  

Deitch saw the art world as “a window on global economics.”

Deitch grew up in Hartford, Connecticut, and majored in art history at Wesleyan. He moved to New York, where he worked at the John Weber Gallery in New York’s SoHo at 420 West Broadway, and began writing criticism and columns. He immersed himself in the downtown scene, where he met Koons, whose dealer at the time, Mary Boone, was located in the same building as Deitch’s employer.

Even before getting his MBA, Deitch saw the art world as “a window on global economics.” His boss, John Weber, was married to the Italian dealer Annina Nosei; he watched Italian collectors buy art as a hedge against Italy’s inflation during the political turbulence of the 1970s. Over the course of his career, he watched as the action shifted to Greek shipping families, American real estate and shopping mall developers, Japanese collectors and corporations, and Russian and Chinese buyers.

When he left New York to attend Harvard Business School, his art-world friends were surprised; he told them he was going to HBS to “to study art criticism,” a joke, he said, with measure of truth to it.

“Some of the most interesting things I wrote came out of applying some of what I learned at the Harvard Business School…to the art world, not just the art market,” Deitch said. Artists “have to figure out how to support themselves economically to actually make the work, they have to make the work, and then there’s a whole channel of how it’s presented, it’s communicated. And there are a lot of parallels to how innovation occurs in other parts of business.”

One artist who recognized this was, of course, Andy Warhol, who Deitch described at the College Art Association’s annual conference in 1979 as a “business artist,” someone who “uses the market to their advantage.” (Koons or Damien Hirst are more recent examples, artists for whom the market is medium, who understand it deeply and are inspired by it, play with it, critique it, and eventually capitalize on it.) It was the first time anyone at the conference had addressed the relationship between art and business, he said.

“I remember how excited people were, and coming in front to talk to me,” he said. “Now…it seems like a third of [the conference] is topics of art and economics.”

Building an Advisory Business

At HBS, he’d also become intrigued by the British Rail Pension Fund’s entry into the art market, with the advice of what was then called Sotheby Parke Bernet. In the mid-1970s, the pension fund purchased tens of millions of dollars’ worth of art and collectibles, also intended as an inflation hedge. Deitch saw the opportunity to advise wealthy individuals who wanted to engage with the art market.

In those days, he recalled, the New York art world was inaccessible and opaque, despite being in one of its most vibrant phases, with communities of artists thriving in neighborhoods like the SoHo and the East Village. With his connections to art-world insiders, background in business, and knowledge of art history, he was the ideal conduit between the two worlds.

“The art market in 1979, 1980, was so different than it is now,” Deitch recalled. “The auction houses—this is hard to believe—they did not print the price estimates in the auction catalogues when I began.…You had to go up to the head of the department and ask…and they didn’t give it to everybody.…Most of the best galleries were in unmarked townhouses, they’re on the second floor or fourth floor of a building on 57th Street, or those days in SoHo, Leo Castelli was on the second floor.”

Deitch drew up a business plan and approached a few financial firms, including Chase Manhattan Bank, which was interested, and Citibank. The latter, he said, “was very dynamic, very global, and very entrepreneurial.” Citibank’s art services department opened in 1979, co-developed and managed by Deitch and an art historian, J. Patrick Cooney.

Deitch’s first couple of years were spent engaging the bank’s account officers, explaining what he was offering (advice on art collecting) and seeing who had clients who might be interested (many demurred).

“Some of the bank officers said, ‘Oh, none of my customers collect art.’ And I said, ‘Are you sure about that?’” Deitch recalled. Eventually, he was introduced to serious collectors across the U.S., Mexico, Hong Kong, Greece, and Japan, as well as wealthy clients who were interested in buying art but didn’t know how or where to access it.

“Now, the auctions have very sophisticated marketing and the art fairs are a big deal and a big social event, but in those days the Basel art fair was not really something that a prospective art collector in the American Midwest would even know about,” Deitch said. “[We] helped introduce American art collectors to the best sources, and prospective art collectors, we helped orient them toward the different possibilities. It was very time-consuming—you know, we spent a lot of time building the first group of customers. But it turned out that we had created a service for which there was a lot of demand. And there was nothing that compared to what we were doing.”

One of his early clients was Dakis Joannou, the Greek collector and founder of the Deste Foundation for Contemporary Art. The two met in Switzerland when Joannou was first launching the foundation. He had no intention of building a conventional private collection, but that changed when Deitch took him around the East Village and he encountered Koons’s One Ball Total Equilibrium Tank (1985), a basketball suspended in a tank of water, which he later described as “a perfect object.”

“It turned out that we had created a service for which there was a lot of demand. And there was nothing that compared to what we were doing.”

“I think people want to work with him because he’s very knowledgeable, very straightforward, very honest,” Joannou said. “It’s extremely simple to work with him; basically you just say something and this is it, you don’t have to go through all kinds of ceremonial process.”

Deitch advised him formally through the bank for a few years, later working “more on a friendly basis.” He played a key role in helping build Joannou’s collection, and the two of them staged ambitious shows that examined the modern condition, with titles such as “Cultural Geometry” “Artificial Nature,” and “Post-Human.”

He also advised Joannou to publish high-quality catalogues, hiring leading graphic designers such as Yale University’s Dan Friedman, to document and edit the books on the foundation’s early exhibits, since Greece at the time was not a heavily trafficked stop on the art circuit.

“Being in Athens at the time, so few people saw the shows,” Joannou said, noting at the time there was no internet. “We wanted it to become as well-known as possible so it was very important to have a serious book.…Deste has been working with this in mind ever since, doing very special catalogues for every show that we are doing.”

Joannou said he never found it odd that his art advisor was employed at one of the world’s leading banks. Citibank just “coincidentally happened to be [his] day job,” Joannou said. “It was always about the exchange of ideas.”

To people in the art world, seeing one of their own installed in a bank was “perceived as kind of fresh and different,” said Koons. “Usually the two points of view were separated.…Of course it was known that people who collected could be from the banking world, but someone who’s more engaged from the creation point of view, it was quite fresh.”

Deitch had found a sweet spot. By the mid-1980s, he and his global networks were “one of the major forces in the international art market,” he said, among the biggest buyers at Art Basel in Basel and at auctions.

“There really weren’t any competitors in terms of this kind of service, helping collectors who otherwise didn’t have access to the center,” Deitch said. In addition to analysis, advice, and access, he and his team would also bring in art historians and conservators to advise on particular acquisitions, and handle the logistics, such as shipping and conservation, a full-service model that has been adopted by major art advisory firms such as Art Agency, Partners, a division of Sotheby’s.

The bank established a clear, transparent fee structure, with an annual retainer based on the level of service required, and an incentive fee “for a particularly advantageous acquisition,” he said.

“It was investment, but in a broader way,” he said. “It wasn’t investment like in the stock market. It was really a very specific, tailored and sophisticated form of asset management.”

Today, of course, there’s an entire industry of art advisors trawling art fairs and auction houses on behalf of their clients. According to Deitch, that’s not necessarily a bad thing—it’s the way that artists can make a living.

“In most cases it’s a dealer or an art advisor who gets people engaged with the art world and helps them with their collecting,” he said. “If you don’t have any of this, how are artists going to make a living? You need an economic structure to support them.”

Christo, the Poster Child for Art Lending

As much as the wealthy wanted help finding works of art to invest in, they also wanted to use those same works of art to access cash. While at Citibank, Deitch also established its art lending business, which eventually became the largest and most profitable service in his department. A 2016 Deloitte report estimated the art lending industry at $15 billion to $19 billion of loans outstanding in the U.S. alone.

Art lending was another tough sell to his banker colleagues, he said, made even more so by the custom of confidentiality that governs the discreet world of private banking. Then he found one client whose art loans were up for public discussion, because of how they figured into the making of that client’s art. That client was the renowned environmental artist and sculptor Christo.

Deitch had worked occasionally with the artist couple Christo and Jeanne-Claude to help them sell Christo’s drawings to help finance the completion of one of their massive, years-long projects.  

While at Citibank, Deitch also established its art lending business, which eventually became the largest and most profitable service in his department.

He noticed a pattern: The request for help usually came in the last six months of the project, when the two were desperate to raise money, leading them to offer the works at a discount (“almost a fire sale,” in Deitch’s words).

“I said, ‘Listen, I want to talk to you. This is not the best way to proceed. Why don’t you get a credit line, which I can help you with, like almost any other business?’”  

He suggested collateralizing the line of credit with Christo’s extensive personal collection. This arrangement allowed the duo to smooth out their spending and then sell the drawings after the project was done—when they’d be worth substantially more—to pay back the loan. Deitch was then able to offer this example as he pitched others in the art world who eventually became his clients.

“With Christo, everything involved with making the art is part of the art, so we could talk about what we were doing in art lending,” Deitch said, because it was part of the artmaking process. “I loved that! So I went around the world talking about this business.”

He had found another sweet spot.

“We eventually were able to do very interesting financing with other important artists, with art galleries and dealers, in addition to collectors," he said. “This was a very important development in the professionalization of the art market.”  

Of course, Deitch is also often remembered for the time his art financing activities took a turn for the worse: the bankrolling of Koons’s massive “Celebration” sculptures, when fabrication costs outpaced what he and Koons had pre-sold them for.


After nearly 10 years, Deitch struck out on his own, establishing himself as an independent dealer with many faithful clients whose support, he told the New Yorker, earned him as much as Citigroup’s CEO in his first year. In 1996, he opened Deitch Projects with a unique model: He provided $25,000 per project for an artist to do whatever she or he would like. If the work sold, they’d split the profits, and if it didn’t, Deitch could keep it.

After a 14-year run that included shows with artists such as Cecily Brown, Kehinde Wiley, Vanessa Beecroft, Tauba Auerbach, Shepard Fairey, Barry McGee, Swoon, Dan Colen, and Dash Snow, he spent three years as the director of MOCA. In 2015, he returned to 76 Grand Street, the original home of Deitch Projects, and this year he is planning a 15,000-square-foot warehouse space in Los Angeles.

Deitch envisions a future in which artists could bypass museums, even galleries like his, and reach audiences directly, without the “big endorsement system” that enhances an artist’s aura, and ultimately her or his market value. He recently partnered with Uniqlo to introduce a line of products, all under $100, designed by artists of his choosing.

“I’m fascinated with what might happen if artists are able to put their work out directly, without this” cultural apparatus, he said. He cited Banksy, who has never had a conventional museum show but whose works sell for hundreds of thousands of dollars, as a model for direct engagement.  

“What you see happening in music, YouTube, I think is going to happen in art in some way. I’m not sure how,” he said. “This for me is fascinating. Will artists figure out a way to go out on their own and take on the world without needing all these conventional structures?”

Of course, that subversive vision of the future would upend the entire gallery system in its current form. But if anyone can carve out a role in that future, it’s Deitch, who has already revolutionized the art market once.

In the meantime, you can find him downtown, bridging the conventional and unconventional, and helping artists have a go at it.

Anna Louie Sussman