Adding to the other upheavals the art market is currently faced with—the possible repeal of the tax code darling known as the “1031 Exchange,” the amendment of the California Resale Royalties Act—an article published today on Harvard Business School’s Working Knowledge blog warns about the sudden deluge of Picasso works available for sale.
Back in February, Picasso’s granddaughter Marina, heir to approximately 10,000 works of art, announced her plan to sell off the majority of her inheritance all at once and without involvement from auction houses or art dealers.
Marina Picasso’s motivations, the article surmises, likely stem from turbulent family history. (The post links to a New York Times article, which opens with the sentence: “Since Marina Picasso was a child, living on the edge of poverty and lingering at the gates of a French villa with her father to plead for an allowance from her grandfather, Pablo Picasso, she has struggled with the burden of that artist’s towering legacy.”)
So what does this mean in terms of cold, hard cash? Mukti Khaire, an associate professor of business administration at Harvard Business School, explains that the art market is somewhat “illogical or strange” (ha!) in this regard:
“In many cases, investors are happy when supply goes up because price goes down and they can purchase more. But in the case of Picasso, and a few others, there’s a slight subversion of that principle….If I own a notable Picasso work, I can be reasonably sure it won’t lose value. But if I am the owner of a lesser-known Picasso, I might be worried in this case.”
So there you go. Famous Picassos will remain unaffected, but the values of lesser-known works (pottery or early paintings, for example), are not immune to the whims of capitalism and may start limboing. For the record, the prices of some lesser-known Picassos are already as low as £937 ($1,558), the price fetched by terracotta plaque Petit carré au visage at Christie’s back in 2014.
Somewhere in the article, Khaire adds, “On the other hand, it might be seen as a good thing in bringing more art out into the world and allowing more people to experience the joy of something as significant as a Picasso.” Let’s end on that note.