Dylan Abruscato on the art market: a Mondrian sells for $47.6M as New York Art Week signals cautious optimism

Uh Dylan, it's great to have you on the show finally. Long overdue. Uh you've given us a lot first time caller. lot of great uh a lot of great pointers. Uh but uh anyways, I wanted we were we were going to cover the story. So, thank you for being uh able to hop on on short notice.

Do you want to give a quick intro and then we'll dive into the story just so people uh have some context? Yeah, sure. Uh I'm Dylan, founder of Crypto the Game, which is an interactive uh crypto survival game. Think uh HQ Trivia, where I worked for the Rise and Fall meets uh Survivor or Squid Game or Hunger Games.

We've had a couple viral seasons. Um, and before that I was uh Jord's head of marketing over at Party Running Capital. So, we go way back. Um, and yeah, great to be here. Way back. Um, awesome.

Why don't you give some context on your your uh background uh as an amateur uh but successful art collector as well because I um always been an obsessive collector of things. You know, growing up I collected Beanie Babies, Pokemon cards, baseball cards, sports memorabilia. um always collecting.

Um fast forward to I don't know probably like 2017 2018 um my uh wife and I moved into our first apartment together had very sterile white walls and um decided that I guess like collecting art would be uh a good way to kind of scratch scratch that itch of collecting and and be something that we could do together.

Um so kind of just started as uh something we could do together. I kind of browsed Instagram. Uh back then there was like a much more intuitive kind of like explore tab. Uh you were surfaced kind of like art if you followed artists. Um and pretty much just cold DM this artist also coincidentally named Jordy.

Jordy Kerwick um whose art immediately spoke to me. Um sent him a DM. He didn't have any gallery representation. Um he made you know buying a piece and commissioning a painting as easy as like texting with a friend.

Um, you know, I think the art market historically has been so hard uh to get into for young collectors and there was like zero friction in the way that we went about it.

I think we got a little lucky in the sense that he eventually like blew up, got kind of like gallery representation, then tier one gallery representation. He was breaking records, uh, you know, in similar auctions to what we're about to discuss.

Um, and kind of because of that, um, I don't know, I almost like made a name for myself in this like Instagram art community. Um, and, uh, yeah, I've kind of just like catapulted into into the art collecting scene. How's the P&L though on paper? I'm sure the the returns are fantastic.

Have you ever do you ever sell or do you just buy? I don't. No, I just buy. Um, I don't know.

I you know the uh everyone always asks kind of because of that like what to buy and how to go about it and my advice is always just to to buy what you love and and buy what speaks to you and it kind of sounds like you know pretty simple advice but anytime I've looked at a piece or like had a recommendation from a friend or a fellow collector on a piece that was going to be a great investment or was going to do really well has never worked out and I've always kind of regretted buying and having on my wall and kind of like looking at it um versus the stuff that we do buy and collect and and kind of like do it for the right reasons and have always been kind of like rewarded on paper basically for for those early bets.

Yeah. Great. Well, let's talk about this story and then I'd love to get your update on kind of the broader art market. So, we'll we'll read through it. So, uh M the journal covered it this morning, but the Mandre Mandrean sells for 47. 6 million.

Chrissy's Modern Art sales kickoff a week-long series of art auctions that will gauge the art market's strengths amid broader uh economic uncertainty. People are wondering will art values sore or flop or you know in general what the liquidity will be like.

So so this was at the kind of low end of the estimate the 1922 work composition with large red plain bluish gray yellow black and blue was expected by Christies to sell for between 40 million and 50 million but only one bidder emerged and it sold quickly for $41 million or 47. 6 with the auction houses fees.

The work still ranks as the third highest price ever paid for the artist, but the record remains 51 million paid three years ago for Mandreon's composition number two.

Both examples feature a large red square, which the auction house hoped would help because collectors tend to pay a premium for Mandreon's spare aspects that contained cherry hues, said Alex Roder Christiey's president. Red always helps, simple as it is, because it's a people that color.

Uh, it's a color that people like, said Roder. There you go. That's what Dylan's talking about. Never buy brown. Never buy doesn't sell. It's also particularly small. It's only about like two feet by two feet or something. And so I saw on X uh Bornosaur a an NFT profile picture says this tiny Mandreon just sold for 47.

5 million last night without anyone batting a batting an eye. And yet people think AAA natively digital grails are overpriced at 2 to3 million much much higher. Kind of saying hey maybe we should pump the pump the the market of the board apes. Let's get let's get board apes in the conversation.

Yeah, let's get it back in the conversation. Um, anyways, uh, were you surprised at how this this got priced, Dylan? Were you following it at all or or or what? I mean, there's a lot of like there's a lot of uncertainty in the overall economy, right?

So, I mean, you would expect that like art kind of oscillates, but yeah, I mean, do you follow this or like how do you even track the overall art market these days? Yeah, I mean it's exact. It is so similar to uh, you know, venture investing.

I know you kind of joked about it at the top, but um especially when you look at emerging markets and if you buy from their studio in the same way that I did with Jordy Kerwick, it's basically getting into a friend and family round.

Um at least with kind of like living artists and artists that still have gallery representation. If you do um if they do basically sign with an upand cominging gallery, that's the equivalent of a seed round.

And then by the time they do get that kind of like tier one gigosian level representation is the equivalent to an entry or a you know tier one uh fund like backing them in like a growth stage round. Um but uh yeah I think you you referenced that kind of like Mandrean record that was set three years ago.

Um there were emerging artists everyone basically like at the time of Zer like everything was going crazy. Um and we saw that both in you know basically across every single market art not uh withstanding. Um so I think the way that I personally judge it is is basically just off of the information that I received.

Um in 2021 2022 I was reaching out to galleries kind of cold and um being told that there were weight lists and the deal flow was basically like very very hard to come by.

Um, fast forward to, you know, a few uh a few years from then, uh, you know, galleries were kind of like reaching out to me, you know, hey, I know you were initially interested in this artist a few years ago. Here's all this work that's available.

I'm willing to offer discounts and that immediately signals to me that, you know, times aren't good for galleries. But I do think that uh the the best way of predicting like how these auctions are going to go are based on basically how New York Art Week goes.

And that was um this past week which was kind of headlined by Freeze but they also had TE FAF as well as NATO which is kind of like the more emerging art fair. Um and from what I can tell from everyone that I've spoken to that was kind of like on the ground.

It was a much more optimistic New York art week than years past. Um Gigosian sold a $3 million sculpture on the floor. Um they sold out you know tons of booths that were sold out kind of like on day one. Um, here we have a $3 million sculpture selling on day one. That's great news. Yeah.

So, I think like that usually sets the tone for how these kind of like auctions go. There's been a ton of buzz around uh the Bass House. I'm not sure if you guys are familiar with the Bass House, but um it was a commissioned uh We both are, but can you explain it for the fans who might not be? Sure. Yeah.

Uh it's an architecturally significant home in Texas uh that these two kind of like well-known collectors uh commissioned a very famous architect to design this mid-century modern house in Texas uh specifically designed to house their collection of Rothkco and and Warh Halls and uh you know pretty much every big name.

Um and uh they are auctioning off the collection which everyone is in in the art market is very surprised by because uh you would think you you know you commission this home to specifically house this collection. It should eventually become a museum.

Um and I think that kind of like bodess well for what they think and what a lot of people think is is going to be a lot of liquidity kind of like heading into these auctions.

Um, having said all of that, I would say if we had this conversation like a week or two ago, I think it would be a lot more uh pessimistic or concerned, but given the very like recent kind of like positive news and kind of like market turnaround, um, I think there's some buzz kind of heading into heading into tonight.

Uh, I have a follow-up question. Um, I mean, the size seems significant. I feel like there's probably a sweet spot for the scale of a particular You mentioned that uh sculpture. Uh we're recording not too far from the Broad. You walk in, there's this uh massive Jeff Coons balloon animal.

Uh I I I I walked in when I was in New York once. I walked into Jordan Wolfson. Uh I don't even know if it's a sculpture, but it's like a performance art piece.

I don't know if you're familiar with Jordan Wolfson, but it's like this crazy interactive like machine that has motors and stuff and at a certain scale it becomes like how do you even collect that unless you have like a museum to put it in. Uh that's who's buying it is is the institution.

Like I would imagine, you know, the the $3 million sculpture that Gaggoian sold that I mentioned was a Coons and I, you know, the Broad bought their [ __ ] sculpture from Gosian and I would venture to guess that the the bidder who or or the person that bought this $3 million sculpture was an institution looking to build out their collection for the museum.

Yeah. Is there a difference? I mean, yeah, I'm curious, not to not to switch gears too much, but I'm curious. Is Christy's even slotting in NFTTS this week at all or are they so over it that they're not even because it was a big thing like three years ago, right? Yeah. I mean, s you got to give Christie the pole.

Yeah, you have to give them some credit for moving quickly and getting NFTTS into these auctions early. Uh but I'm curious if they're doing that now. So, this week is kind of like the hero week of every year.

And there's uh there's no way that in like a you know 21st century like masterpiece auction you'll see an NFT but I do think they are still accepting crypto and and selling NFTts. Uh all the m major auction houses kind of have daily auctions that they're running.

Um you know you probably won't see a people in something as kind of like highly publicized as this week's auctions. Um but I I definitely think they're still selling digital art for sure. Yeah. Yeah. There's one NFT that I think belongs in the conversation. Have you heard of uh this Moxy Marlin Spike NFT?

So he's the founder of Signal and during the NFT boom he wrote a very technical deep dive on kind of some of the flaws with the way NFTTS were structured in that um he he basically designed an NFT that displayed differently on OpenC than in a Phantom wallet than in an Ethereum wallet.

and he was making this commentary around the importance of platforms and the role that a firm like OpenC plays in the art market and how like the the code is not purely onchain because it can be represented differently in different places and and it was kind of this like it was kind of a top signal at the time.

He wrote it when NFTs were super hot and obviously he came to it from a very uh engineering mindset perspective and I think that it even though he never sold it and it doesn't have any value and it never like minted in the traditional sense it is an NFT and it has this historical provenence and this story around it that I think as we look back on the NFT boom we could remember that particular story as an interesting commentary on the entire industry that could actually drive the value up.

So, I was considering buying it from him for a while, but I didn't I didn't have the guts to throw out an actual price. Yeah. Yeah. I don't know.

Well, I I do think similar to how there's paintings and there's sculptures and there's basically all different forms of, you know, there's mixed media art, like I do think digital art definitely has staying power. Um, probably just like in the more experimental uh guys that you were talking about.

And then just to quickly touch on like size as being a blocker. I think once you're talking about these like you know eight nine figure pieces uh it's almost always someone that can house or store either in their in their museum or in their home like a massive piece.

Um but just for like the everyday collector or someone that might be listening to this like um personally speaking um like I have gigantic canvases that are still rolled up that I have absolutely zero wall space for. But, um, that is like an addiction and a problem.

And I do think that, um, you know, buy for the size that feels right to your home and something that you actually want to hang. Well, we're moving into a new studio very shortly. And, uh, we're certainly going to have some wall space. So, we we'll only charge you a small storage fee. I'll pump my bags as a Yeah.

family, family, and friends. Uh, anyways, great to have you on. Uh, come back on again so much. We'll talk and let us know how things shake out this week in the art market. Oh, later. Talk to you later. I was just pulling up. So, OpenC Jared cuz he just has 5 minutes and he's all the way from Saudi Arabia.

Jared, folks, reporting live. Reporting live from Saudi Arabia. He's there on the ground. He better he better be in the traditional in the traditional Oh,