The gallery: venture business and vision

A gallery is a place (Address, Space). The address is crucial — not just the city, but the exact location within the city. What’s nearby? How do you get there? Serious galleries are not located on tourist routes; they are slightly off the beaten path, but not too far. Often they stand wall-to-wall, occupying entire districts. If there is a museum of contemporary art in the city, the gallery is usually right next to it.

A gallery is a name. Most often it is the owner’s name. There are also husband-and-wife pairs, but since this business is built on personal taste and individual vision, it’s hard to find someone who sees things exactly like you. That’s why it’s usually one person. This is why many say that a gallery isn’t really a “business” in the traditional sense — it’s very difficult, almost impossible, to sell. If I decide to do this, I won’t buy an existing gallery with someone else’s name — I’ll create my own. (Though in New York there is another type of gallery, which I’ll describe later).

A gallery is a circle of artists. Concentric, overlapping circles: those whose works you can buy here, those who have had exhibitions, and those with whom the gallery has a contract.

The gallery’s activities can be represented as a five-pointed star:

1. EXHIBITION ORGANIZATION — mostly solo shows on its own premises, but not only. Major galleries sometimes collaborate with museums. They also participate in art fairs. So a gallerist is essentially a curator.
2. ART SALES — Yes, a gallery is an expensive shop that sells art to collectors, interior designers, corporations, and museums.
3. ARTIST PRODUCER — The gallery represents the artist’s interests, handles press and contacts with curators, and invests money in production and promotion of the artist.
4. COLLECTOR CONSULTANT — Helps select artists for a collection and find pieces on the open market at the collector’s request. Can represent the collector at auctions and fairs.
5. INVESTOR — Gallerists often buy works themselves — either from young and still unknown but promising artists, or receive works from the artist as compensation for promotion costs, sometimes on very favorable terms.

Interestingly, during my live broadcast I forgot the fifth point, but it was precisely this fifth point that made me a financially secure man. Commissions from sales cover the gallery’s expenses and allow the family to live, but the real commercial success comes from works bought for two thousand and sold ten years later for fifty thousand.

An artist needs to understand that since a gallery is a private business, there are no “gifts” here. Many of the gallerist’s actions are venture investments, which is why the business model isn’t obvious. For example, I paid guaranteed stipends to many artists in exchange for works. It looked like scholarships or charity. The artists were grateful, but it was never charity — it was an investment. A gallery might “gratis” help a museum organize an exhibition or pay for an artist’s production at the Venice Biennale, but this is always done with the expectation of rising prices and because it holds an exclusive contract with the artist. These are “high-level relationships” that only self-confident people like me can afford. In most cases, everything has to be paid for — here and now.

1. Organizing an exhibition involves costs. The gallery covers the minimum expenses, but if we’re talking about a catalogue — it’s exchanged for a work. If the artist is from another country and there are additional transportation costs, they are either covered by the artist or exchanged for works.
2. A 50% sales commission was the general rule until recently. Now it varies, but 50/50 remains the benchmark. Important to remember: if an agent is involved, they are paid from the gallery’s share. If a Kyiv gallery organizes a show in a Berlin gallery, the artist always receives their 50%, and the two galleries split the remaining 50%. Discounts for museums are shared between artist and gallery; discounts for regular clients are borne by the gallery. Today, thanks to social media, the distance between artist and collector has dramatically shortened. To avoid the temptation to bypass the gallery while also not forcing the artist to give away half their income for nothing, in recent years I used two different rates: 50% when sold through the gallery, and 20% agent fee when the artist sells directly from the studio.
3. When signing a producer contract with a gallery, remember that it will eventually end. If the promotion is successful, you will receive much better offers, and it would be unethical for the gallerist to hold you back. If it’s unsuccessful, the gallery won’t recoup its costs, and you will want freedom. So it’s best to agree in advance: what portion of the works remains with the gallery if you leave. Then they will even be glad when you rise, because they still have works that are increasing in value.
4. The Consultant role — building a collection independently of which artists the gallerist personally works with. This only happens when there is deep trust between collector and gallerist. This is what a gallerist builds their reputation for. It’s the “easiest” money — converting trust into expanded professional connections. Advice to artists: your gallerist’s or agent’s percentage should be high enough that they are willing to share it with such a consultant.
5. Investments. If your market earnings are not enough or your artistic project requires significant production costs, you need an investor. Or you need at least one year to focus purely on creation without side jobs. If you receive 50% for already created works, for future, yet-to-be-created works you can usually count on 30%. Try to sign investment contracts for a maximum of one year. In general, while collectors are important, five serious investors will do more for an artist’s career than twenty collectors. A collector simply waits for your success and enjoys it. At best, they recommend you to friends. An investor who owns ten of your works will take real, active steps to promote you.

Prices. I’ll talk about prices in a separate text about the different art markets. The main advice: in all contracts with galleries, try to fix the prices for one year (maximum two years for foreign galleries). Alternatively, use tiered pricing for exhibitions: out of 20 works, the first 5 at a stimulating lower price, the next 10 at a higher price, and the last 5 at the highest price.

Overall, it’s important to remember that the current model of the gallery is only about 60 years old and has almost exhausted itself. New forms of institutions will appear.

The main criterion for a gallery’s importance, in my view, is how many world-renowned, successful artists began their exhibition and commercial career in that gallery. A gallerist is more of a visionary than an expert. His main task is to see the future — not the distant future, but literally tomorrow. Deep knowledge of the past often prevents experts and art historians from seeing what’s coming next.

P.S. I mentioned above another type of gallery I saw in New York. Five investors (people who pay over a million dollars in taxes per year) find a museum curator they trust and create a gallery around him. They buy works from every exhibition. This gives the gallery guaranteed income. Everything else depends on how commercially minded the curator is. This model is directly linked to American tax law: if you donate a work to a museum and receive a document stating that you made a donation worth a million, you can write off 30% against your taxes. So if you bought a mid-career artist for $20,000 and five years later he reached museum level and you donate a work appraised at $500,000, you effectively make a very good profit through tax savings. This is why hunting for undervalued young artists is almost a mass hobby in New York.

P.P.S. Another exception is the Socialite Gallery. It is usually created by the wife of a wealthy man as a kind of club. There are no concerns about profitability, and “gifts” can happen. However, since the gallerist isn’t interested in money, they don’t earn it for the artist either.

There are many other exceptions: galleries created by artist communes, artists in Berlin who turn their studios into galleries and invite artists from other cities, etc. And then there are the monsters — Gagosian, Pace, Marlborough — who take already established artists and magically multiply the prices of their works by ten times or more.