The Big Art Short: Museum Selloffs Pressure Art Valuations

Museums are reshuffling collections. The value of art may never recover.

What would it say about the business of sports if the owners of the New York Yankees, the Steinbrenner family, sold out? Or about real estate, if the Rockefellers took their name off their mid-Manhattan center of office buildings? So it is with the business of art, and billionaire collector Ron Perelman’s sale of his 1,000-plus piece art collection. 

Perelman is one of art’s most aggressive, and well-stocked, patrons. The 77-year old has controlled incalculably valuable masterworks by the likes of Miro, Matisse, and Jeff Koons. Publicly, Perelman said the sale is part of an overall move toward a “simpler life.” Perelman has shown remarkable spiritual depth in various interviews. Published reports say the cash will help Perelman fund his struggling investments in everything from cosmetics, chocolate, and camping gear.

But conversations with art collectors, dealers, and gallery owners indicate that Perelman’s firesale might have far more subaltern motives: Art, as a vessel of value, is entering a dangerous new period of instability. 

Perelman, one of Wall Street cagier investors, may simply be sneaking out of the market, while prices are high. 

Art Builds Family Trust

Major artworks that the super-wealthy like Perelman tend to collect have traditionally been favorite alternative investments for multibillion dollar pools of cash that outlive their creators. Perelman faces just such intergenerational investment choices. He has been married 5 times, and has something on the order of a half-dozen kids. High-quality art would be an ideal avenue to pass such major wealth onto the next generation. 

“As long as the artist is in the so-called book of known masters,” explained one art consultant, “that art will always be worth something.” 

But the long-term, inalienable value of art may be getting smudged: Major art museums are in the midst of an unprecedented reshuffling of their collections to raise cash to both pay bills and diversify holdings. Such sales are called “deaccessions” in the museum trade and were once flatly forbidden by industry policy. But starting in mid-April, industry standards were relaxed. Now even a major public-funded collection, like the Brooklyn Museum, can sell major works from a Cranach, Courbet, and Corot by a simple board vote. 

Museums have placed an unprecedented number of high-quality pieces under the glare of public valuation. Experienced collectors are asking if this flood of new product could alter the delicate narrative around the value of art – permanently.