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Warhol’s Marilyn and the Art Market It’s fun to guess who might spend $200 million—or much more—on Marilyn. But what impact will a new Warhol record have on the art market? April 2022
ANDY WARHOL WAS, until recently, the driving force in the contemporary art market. In 2007, Warhol’s annual auction sales first peaked at $434 million. That same year, according to Clare McAndrew’s annual report, the broader art market peaked at $65.9 billion. Seven years later, the Warhol market reached a new high of $603 million and the entire art market was $68.2 billion. At the height of Warhol’s sales in 2014, the market for Contemporary art peaked at nearly $8 billion. By contrast, the markets for Modern, Impressionist and Old Masters artworks all reached an apex three years earlier. In 2015, the global art market was diminished but only to 2007 levels. Warhol and the art market both still had a strong year in 2015. From 2016 to 2020, there was a significant re-alignment. Warhol’s artwork played a lesser role in a lesser market. Overall, this was a good thing. Demand for art is driven by social and cultural factors. A healthy art market can replace demand for Warhol with demand for works by eight-figure names like Twombly, Basquiat, Rothko, Koons or Richter. Markets with greater diversity are healthier; they have more potential for dynamic rotation. A survey of the Warhol market over the last 33 years shows its own rotation. The 40-inch Marilyns have consistently set record prices for Warhol. The late 90s/early 2000s market favored the large flower paintings. Death and Disaster works dominated records in the 2007 to 2013 period. Starting in the same
period but extending through the Warhol drought of 2016 to 2020, Elvis paintings have played a recurring role providing value and dollar volume. The Warhol market has rebounded substantially in 2021 led by strong sales of the Warhols in the Macklowe collection. But the key question remains: what caused the fallow period of sales from 2016-2020. One important but undiscussed aspect of the Warhol market is supply. During the earliest phase of the Contemporary art boom, the Warhol foundation was still selling art work, the Mugrabi family, Gagosian Gallery, Peter Brant and other market participants all had supply and acted
as buyers of last resort. Three factors—continuing high average prices, declining volume of lots, and very strong prices in the market for Warhol prints—all suggest the constraints on the Warhol market come from the supply side. Simply put, few Warhol owners want to sell. One reason may be that prices have not moved up enough in the last six years. That brings us back to Shot Sage Blue Marilyn and its potential effect on overall pricing in the Warhol market. Will a new record price paid in public unleash supply as current owners relinquish their works for much higher prices than were paid in the last two decades?
ANNUAL AUCTION SALES FOR ANDY WARHOL Hammer ratios measure demand in excess of expectations. The red line represents the annual hammer ratio for Andy Warhol’s art at auction. The blue bars are total dollar volume annually. The chart shows that auction houses have accurately priced Warhol’s work over the last decade even as volume declined.
1.8
$700m Hammer Ratio
Total Volume
1.6
$525m
1.4
$350m
1.2
$175m
1
$0 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20 ‘21
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Warhol Record Price Market Dynamics WHEN CHRISTIE’S ANNOUNCED that it would be selling Doris Ammann’s 40-inch square Warhol image of Marilyn Monroe this May, the news was stunning but the record-setting estimate of $200 million was not. The five 40-inch Marilyns hold a special place within Warhol’s body of work; and another Marilyn is known to have sold privately above the level of Christie’s estimate. A $200 million auction estimate is eye-watering. But the number has a clear logic. Christie’s has already sold a work publicly for $450 million—and several other paintings are known to have sold privately for prices above $200 million. That makes the estimate almost conservative. Non-market observers tend to fixate on record prices. The expectation is that record-setting sales will beget more record-setting sales. The art market works differently. It is uniquely dependent upon public prices to provide cardinal points.
This is because the asset lacks other fundamental means of valuation. In other words, the monetary value of art can only be determined by a sale, not by a calculation of income streams. A record price becomes a North Star for other transactions; however, these tend to be transactions at a lower level. Warhol’s work increased in value at a very rapid pace. Between 1998 and 2007, a 40-inch Marilyn quadrupled in value every nine years. At that rate, one might have expected to see a $280 million Warhol sale in 2016. That obviously didn’t happen. But the market came close. Steven Cohen paid $80 million privately for Turquoise Marilyn in 2007; Kenneth Griffin paid triple that—or $240 million, according to Vanity Fair—in 2017 for Orange Marilyn. Quadrupling had slowed to tripling, a nine-year pace had extended to 10 years yet Warhol’s Marilyns continued to gain value. Using LiveArt’s data from public
auctions, we mapped the market dynamics for high value Warhols. These charts show a pattern of new highs in 1989, 1998, 2007 and 2011. Art markets look for confirmation prices when an artist sells in a new range. For Warhol, the 1994 resale of Shot Red Marilyn at a price 10% below the first sale was a confirmation price. The 1998 sale of Orange Marilyn for $17.3m had to wait until 2004 before the $15 million sale of Mustard Race Riot confirmed that price. Green Car Crash (Green Burning Car 1) sold for $71 million in 2007 followed by the $63.3 million paid for The Men in Her Life in 2010. The 2013 auction of Silver Car Crash (Double Disaster) for $105.4 million was mostly confirmed by the $81 million paid for Triple Elvis [Ferus Type] the next year. Confirmation prices tend to be singular at these very high levels. But they do help loosen purse strings for works down a price rung or two. Following Warhol’s 1998 high there were a dozen new sales at prices between the previous high ($4m) and the new record ($17.3m). After the 2007 record high price ($71m), there were 21 new sales at prices between the 1998 record ($17.3m) and the 2007 price. Since 2011, only one work has sold above the previous record price set in 2007; however, more than two dozen works have sold at prices
WARHOL PAINTING SALES ABOVE $5M, 2003-2021 Non-market observers tend to fixate on record prices in the belief that other records will follow. The art market functions more commonly by filling in sales at lower levels but higher than previous records.
$125m
$100m
$75m
$50m
$25m
$0 2005
2010
2015
2020
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between the 1998 high and the 2007 high. Higher record prices prompt more frequent transactions at lower but previous record levels. Buyers become habituated to prices that previously seemed high but now have been confirmed by a market rising even higher. Between 2007 and 2011, there were 10 Warhols sold publicly for prices between $25m and $50m. Between 2011 and 2021, 17 Warhols sold in that price band. Before 2011, only two Warhols had sold publicly above $50m. From 2011 on, eight $50m or above Warhol paintings were auctioned. If the Shot Sage Blue Marilyn sells for its estimate, it will make a public price near or above the previous record private price. Once a price ceiling around $250m is set, that creates new price bands below the record price for additional sales. With a $250m public price, we should expect to see bands between the 2007 ($71m) high-water mark and approximately $160 million which is halfway between the 2007 high and the $250m level. Having more Warhols selling for prices above $75m, should bring more works to market. Buyers who paid less than $50m for Warhols—and that is all but a dozen or so buyers—would make substantial gains if they owned works that could expect prices above the $75m level. If Shot Sage Blue Marilyn doesn’t sell for the $200 million estimate or sells significantly below there, it will indicate a meaningful change in Warhol’s status. One fear related to Warhol’s oeuvre is that his work is mostly relevant to Baby Boomers. Just as biblical stories once familiar to admirers of Old Master paintings lost their cultural currency, so too might Liz, Jackie, Elvis, Marilyn become as obscure as many of the society portraits. As described earlier, Warhol’s paintings have declined in number at auction over the last six years even as they continue to rise in value. That may indicate narrowing demand for only certain subjects. On the other hand, remember the upward slope of Marilyn prices from 1989 to 1998 to 2007 to 2017. A mere doubling of the private sale price paid five years ago would mean exceeding the price of Leonardo’s Salvator Mundi. A sale at that level would be a rebranding event for Warhol.
50 YEARS OF MARILYN COMMANDING THE MARKET Since 1989, more often than not, the most expensive Warhol has been one of the five 40-inch Marilyns made in 1964. Here’s the story of their rise and rise and rise.
1967
1989
1994
RECO R D P R IC E
Masao Wanibuchi buys Shot Red Marilyn for $4.07m at Christie’s
Peter Brant buys his second Warhol direct from the artist. Pays $5000 for Blue 40-inch Marilyn. A Cadillac costs $3500 at the time
2007
Wanibuchi is forced to sell Shot Red Marilyn. Philip Niarchos pays $3.6m. Nervous Warhol collector Doris Ammann observes with relief at the time, “it’s the recognition we were waiting for”
1998
P R IVA TE SALE RECO R D
RECO R D P R IC E
RECO R D P R IC E
Green Car Crash (Green Burning Car 1) sells for $71m at auction
Steven Cohen buys Turquoise Marilyn from Stefan Edlis for $80m
S.I. Newhouse buys Orange Marilyn for $17.3m at auction
2008
2013
2017
P R IVA TE SALE RECO R D
RECO R D P R IC E
P R IVA TE SALE RECO R D
Silver Car Crash (Double Disaster) sells for $105.4m at Sotheby’s
Orange Marilyn sells, according to Vanity Fair’s two sources, to Kenneth Griffin for $240m
Eight Elvises sells for $100m
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TOP 5 WARHOL PRICES (INCLUDING AUCTION & PRIVATE SALES) #1
#2
#3
$240m
$105,445,000
$100m
Orange Marilyn, 1964 SALE DATE :
2017
PRIVATE SALE
Silver car crash (Double disaster), 1963
#4
#5
$81,925,000
$71,720,000
Triple Elvis (Ferus Type), 1963
Green car crash (Green burning car I), 1963
Eight Elvises, 1963 SALE DATE :
SALE DATE :
November 13, 2013 [Lot 00016] HOUSE : Sotheby’s New York
2008
PRIVATE SALE
SALE DATE:
November 12, 2014 [Lot 00009]
SALE DATE : May 16, 2007 [Lot 00015] HOUSE : Christie’s New York
HOUSE:
Christie’s New York
NOT AS MANY AS YOU THINK: WARHOLS ARE SCARCER THAN WE IMAGINE Two decades leading the Contemporary art market has created a false sense of Warhol’s abundance. The estate has sold everything and some of the biggest suppliers of Warhols are out of the market. Here are a few of the popular series and the number of paintings that actually exist.
FLOWERS
3165
492
PORTR AITS
DEATH & DISASTER
168
JACKIE
306
SELFPORTR AITS
97
MARILYN
40
LIZ
50 ELVIS
39
ANDY WARHOL Andy Warhol (1928-1987) was a commercial artist and illustrator whose success allowed him the freedom to pursue ideas about art, celebrity, mass media and culture that placed him at the center of American Modernism at its height in the 1960s. His most original paintings, prints and sculptures were
produced in the period between 1961 and when he was shot in 1968. The next year, Warhol founded Interview magazine and for the remaining 19 years of his life, Warhol became a beneficiary—and an object—of his own fetishization of fame. He died in 1987 from complications arising during gallbladder surgery.