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Tuesday, December 12, 2017

The Gagosian Effect

Takashi Murakami's installation at the Gagosian Gallery in Rome Takashi Murakami's installation at the Gagosian Gallery in Rome Courtesy Gagosian Gallery. Photography by Matteo Piazza.

Over Oscar weekend in late February, art dealer Larry Gagosian held a private lunch at the $15.5 million home he recently bought in the Holmby Hills section of Los Angeles. His glass-enclosed house had been decorated for the occasion by the artist Richard Prince, so its walls were lined with his portraits of beach beauties and pulp-novel nurses.

As guests including financier Ron Perelman and actress Renée Zellweger navigated the home's skylit hallways, Mr. Gagosian and his staff mingled with guests, discreetly passing a rolled-up sheet of paper between them like a baton. The sheet listed prices for nearly every artwork in sight.

With an unrelenting focus on selling, Mr. Gagosian, 65, has become the most powerful art dealer in the world. He represents the estates and careers of 77 of the world's top artists, including Pablo Picasso, Alberto Giacometti, Cy Twombly, Richard Serra, Jeff Koons, Damien Hirst and Ed Ruscha. Dealers who track how he prices his gallery shows estimate he sells upwards of $1 billion worth of art a year. Sotheby's, by comparison, auctioned off $870 million worth of contemporary art last year.

As the contemporary art market rebounds from the recession, Mr. Gagosian's art empire is exploding. In the last few years, he has opened new galleries in London, Paris, Rome, Geneva, Athens and Hong Kong, expanding his global art network to 11 galleries world-wide—the largest blue-chip franchise ever attempted in the industry.

Mr. Gagosian's position affords him a lifestyle on par with his billionaire clients, who include hedge-fund manager Steven Cohen, money manager Leon Black, Christie's owner Francois Pinault and billionaire philanthropist Eli Broad. He flies in a roughly $40 million Bombardier Global Express private jet and has a personal chef on call at his Madison Avenue headquarters. He has homes in New York, the Hamptons and St. Bart's in addition to his home in Los Angeles, speckled with his own collection of vintage photographs, Giacometti busts and canvases by Picasso and Andy Warhol.

Rapid global expansion has its risks. Mr. Gagosian now needs to supply about 60 distinct shows a year with fresh art. Collectors in Rome and Paris so far have shown little inclination to buy million-dollar contemporary art. And it was only two years ago that prices for some of Mr. Gagosian's trendiest artists, like Mr. Hirst, plummeted at auction. Contemporary art, the most volatile segment of the art market, remains subject to sudden, improbable leaps and jarring crashes.

There's also the question of a succession plan. The Los Angeles son of Armenian-American parents, Mr. Gagosian got his start peddling framed posters at a markup for $15 apiece. Since 1979 he has built his gallery empire largely on his own hard-charging deal-making abilities—he still conducts many of his biggest sales himself—and it's not clear who will eventually replace him as the head of his business. The dealer says he "lives in complete denial" about a successor. It's a critical issue, since Mr. Gagosian plays such a central role in elevating and maintaining the amount paid for his artists' work.

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