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COVID-19’s Impact on the Art Market

Professor Emily Behzadi

The COVID-19 pandemic has occasioned unprecedented challenges to the art market.

As an industry that was once dependent on in-person interactions, COVID-19 has changed the landscape. Art galleries have been required to shut their doors, art fairs canceled, and auction houses have had to move to online bidding, writes California Western Assistant Professor of Law Emily Behzadi in a feature article published in the ABA Entertainment and Sports Lawyer Journal entitled Art Law 201: Painting the Picture of Sales of Art During a Global Pandemic.

Citing Dr. Clare McAndrew’s 2020 study entitled The Art Market, Professor Behzadi discusses how the pandemic has impacted the market and how the widespread economic effects have brought a number of legal issues to the forefront.

Galleries have been one of the hardest-hit sectors in the art industry. According to McAndrew’s report, in the first six months of 2020, galleries reported that the value of their sales fell by 36 percent on average. Most galleries are not optimistic about 2021 with respect to sales of fine art and antiques and expect sales to continue to decrease.

The individuals most impacted by this downward trend in sales are contractors, freelance workers, and others behind the scenes of galleries and their blockbuster exhibitions. A recent Art Dealers Association of America (ADAA) report showed that as many as 74 percent of independent contractors regularly working before March 13, 2020, are no longer employed.

With the traditional in-person methods of acquiring art having ceased, it is not surprising that overall online sales have risen during the pandemic, writes Professor Behzadi. According to The Art Market, the share of online gallery sales rose from 10 percent of total sales in 2019 to 37 percent in the first half of 2020 alone.

Notwithstanding this emerging trend, only 30 percent of collectors prefer to use online viewing rooms or platforms to make art purchases.

Auction Houses have fared better, but not by much. An astonishing fact, comments Professor Behzadi, is the drop in auction turnover, which dropped 49 percent in the first quarter of 2020.

Some auction houses are taking a hybrid approach to counter this, mixing brick and mortar with online sales. Sotheby’s, in particular, has seen success with this approach, seeing a $1.5 billion turnover thus far in 2020.

The viability of this new form of virtual live auctions is questionable in a post-COVID world, states Professor Behzadi. The theatrics and momentum of public auction sales cannot easily be captured in a virtual environment.

These widespread economic effects of COVID-19 on the art market have brought a number of legal issues to the forefront. Art law attorneys have to adapt to the evolving disputes, including canceled exhibitions, pricing, donations, authenticity, intellectual property infringements, shipping and storage, and bankruptcies.

The complexities involved in the sale and acquisition of art are already ubiquitous, and attorneys must keep pace within this legal minefield.

Read Professor Behzadi’s complete article, Art Law 201: Painting the Picture of Sales of Art During a Global Pandemic, here.