Art Market
What’s At Stake in the Artist’s Resale Right Debate?
By Tess Thackara
Jul 31, 2015 9:58 am
Congressman Jerrold Nadler Speaking at the Center for American Progress. Photo by Ralph Alswang.

Congressman Jerrold Nadler Speaking at the Center for American Progress. Photo by Ralph Alswang.

During the Scull auction of 1973, in which the collector Robert C. Scull sold some 50 iconic works of Pop and minimalist art for $2.2 million, Robert Rauschenberg, whose work was represented prominently among the lots but earned nothing from their sale, showed up to heckle the collector. In footage of the event, a cameraman captured Rauschenberg taunting Scull after the final hammer falls: “Are you going to send me flowers? I’ve been working my ass off.” Scull, looking giddy from the evening’s heady prices, appears unmoved. The issue of secondary market royalties for visual artists—one that is unique to this category of artist in the United States, since musicians, authors, and other forms of artist generally collect royalties—gained momentum following the auction. And Rauschenberg and Jasper Johns (also included in the sale) went on to fight for the right of visual artists to collect a small percentage of secondary sales of their work.

The Scull auction footage was played to a packed house at TriBeCa’s Artists Space on Wednesday, July 22, on the occasion of a panel of arts professionals gathered to discuss a topic that has generated heated discussion across the art world over the past four decades. The cohort included contemporary painter R.H. Quaytman and conceptual artist Hans Haacke, Chinatown gallery Essex Street’s owner Maxwell Graham, art historian Lauren van Haaften-Schick, members of the Artists Rights Society (ARS), and New York Supreme Court Justice Barbara Jaffe. (Quaytman and Haacke were both included in “The Contract,” an exhibition on view earlier this year at Essex Street that offered works for sale under the Siegelaub-Projansky Agreement, an influential private contract used by artists to maintain legal rights to their work after its sale.) The discussion came at a time when Congressman Jerrold Nadler of New York is leading an effort to push a bill, the American Royalties Too (ART) Act, through congress. The bill would guarantee artists 5% of every resale of their work priced over $5,000 (at auction houses making sales of $1 million or more, or through online sales), with a $35,000 cap on royalties for artworks sold for more than $700,000. Major auction houses are lobbying against the law. 

During his presentation, Dr. Theodore Feder of the Artist’s Rights Society pointed out that the European Union has set a precedent. It mandated artist’s resale royalties in 2001 and over 70 other nations have similar legislation, yet in the absence of a comparable law in the United States, American artists are unable to collect on sales overseas. There have been numerous attempts to establish artist’s resale legislation at a federal level in the United States over the years. (At state level, the California Resale Royalty Act is inscribed into that state’s law but is reportedly rarely invoked.) The first version of Nadler’s current effort came in the form of The Equity for Visual Artists Act of 2011, which included a stipulation that a small percentage of a sale would also be dispersed to the wider community of artists and to support nonprofit art spaces. Those provisions—seemingly arduous to define and implement—have been struck from its most recent iteration. Yet, as Quaytman expressed during the discussion that followed, the dizzying benchmarks set in auction sales in recent years must be absorbed by museums and nonprofits in the form of insurance fees, if not the cost of actual works, risking “the betterment of museums and the public.” 

The provision to levy a small tax on secondary sales for the artist ecosystem at large was in part intended to assuage one of the main arguments against resale legislation—that it would benefit only a small proportion of already-wealthy artists whose works sell for high enough prices to procure a decent sum from a 5% cut, a “misconception” from Feder’s point of view. Several speakers raised the question of incentive, building on a report on artist’s resale legislation issued by the Copyright Office in December 2013, an excerpt of which reads: 

[T]he Copyright Office agrees that the current U.S. copyright system leaves many visual artists at a practical disadvantage in relation to other kinds of authors. … Because most artworks are not produced in copies, the visual artist receives a financial interest in only one work—or at best a few copies of that work. Other creators face no comparable limitation, as their works are sold in perfect copies, and the copyright law generally enables them to be paid a share of every copy. To alleviate the effects of this financial disparity, the Office believes that Congress should consider ways to rectify the problem and to further incentivize and support the development and creation of visual art.

The increased oversight and regulation that expanded legislation around artwork sales would bring may not be attractive to all. “Fine art is the last bastion of an unregulated market,” said New York Supreme Court Justice Barbara Jaffe. “Don’t forget that when you have regulation you have the government coming in and examining it, and the IRS and such.” She countered, however, that while private contracts such as the Siegelaub-Projansky Agreement—used by Haacke, Daniel Buren, and Adrian Piper, among others—place the onus on the artist to administrate and absorb the costs of litigation, a federal law would transfer this responsibility to the government. “Every contract can be gotten around; that’s what lawyers do,” she said. “What’s good about this is it makes it a matter of law.”

The kinks and quirks of our current art market legislation are manifold. As Haacke noted, when a collector donates to a museum, they get a tax deduction. When artists donate, they don’t. (Warhol and Lichtenstein found a loophole by donating each other’s work to museums.) Even if the ART act were to make it through congress, several nebulous areas would remain. In a hearing about the bill last year, Nadler described the artworks covered as including “painting, drawings, prints, sculpture, and photographs in the original embodiment or in a limited edition.” Digital, performance, and conceptual artists are conspicuously absent from this list. Digital artist Rafaël Rozendaal has drafted a contract specific to the resale of this form of art, but artists of his ilk would not benefit from the federal law.  

At stake in the battle to reshape the structural imbalances of the art market are larger questions of ownership, cultural value, and moral rights—and the issue of whether artworks should be approached in the eyes of the law as assets in a free market economy. Expressing concern with the quick ascension of the art market, Graham later commented that art dealers had a significant hand in escalating hammer prices, citing Charles Saatchi as emblematic of a new class of collector-dealers. “The problem is the dealers. A lot of dealers are selling works in auction, even in the primary market.” He noted the tendency of the value of an artist’s work to increase at a much steeper rate after inclusion in their first auction, the implication being that mere presence in an auction signals an artist’s growing worth, despite circumstances leading to the auction of an artist’s work being at times quite random. “Auctions and the nature of auctions determine how much work is worth. This affects how artists work.” 

The emotional response to the footage of Rauschenberg and Scull was clear, but the legalese is far more complex. Nadler’s bill faces continued opposition, but the World Intellectual Property Organization’s Standing Committee on Copyright and Related Rights (SCCR) is set to discuss the issue in December 2015. Whatever the outcome, changes will likely be slow in the making, and as Justice Jaffe reminded the audience, “this is an incremental process.”

Tess Thackara is Artsy’s Senior Editor.