Thursday, August 09, 2018

"So here’s the upshot: in a resale royalties scheme, 99% of artists will likely lose, so that the top 1% can win. This reverse-Robin Hood story is not some bug in the system -- it is its main feature."

Chris Sprigman and Guy Rub make the case against resale royalties for artists:

"We collected data representing all sales at public auctions conducted by Sotheby’s and Christie’s during March and April 2018. We examined how resale royalties from those sales would have been distributed if the so-called ART Act, the last bill attempting to enact resale royalties on a national level, was in place. The results are telling.

"If the ART Act had been law, 683 transactions by Sotheby’s and Christie’s in those two months might have been subject to resale royalties payments. Those sales ... would have generated royalty payments totaling over $2.3 million. A nice sum, but for whom?

"For the rich, and, in particular, for the rich and dead. Most of the royalties (57%) would have been paid to the estates of deceased artists, typically very famous ones. That list is dominated by some of the most prominent artists of the 20th century: artists who, on top of being critical and popular favorites, were wealthy in their lifetimes and left fortunes to their heirs. ..."

"So it’s clear that top-tier artists and their heirs make out like bandits under a resale royalty scheme. It’s also clear who doesn’t: young artists. There is not a single living artist in his or her twenties in our data who receives a resale payout. Total royalties for living artists in their thirties is only $6,813, or 0.29% of all royalties. Even artists in their forties are largely shut out. The top earner under the age of 50, the 49-year-old Shahzia Sikander, would have made just $5,125. In fact, all artists under 50, together, would have made only $52,906 in those two months, which is just 2.28% of all royalties, and about one-sixth of what the Andy Warhol Foundation alone would have reaped."

It's a pretty convincing argument against the ART Act ... but I still think there's a version of a resale royalty scheme that may make sense (which one day I'll try to spell out in more detail).