How Richard Prince's "Cowboy" Tumbled in the Boom-Bust Rodeo

How Richard Prince's "Cowboy" Tumbled in the Boom-Bust Rodeo

For a sniper’s-eye view of how volatile the market for a single work of art can be, just consider the recentcourt decision requiring Christie’s to pay Internet entrepreneur Halsey Minor $8.6 million after the auction house prevented him from selling four Richard Princes at the height of the art boom.

Of those four works — which Christie's held during the market's apex in 2008 as security against Minor's towering unpaid auction bills — let's examine the case of the 1989 Untitled (Cowboy), a 50-by-70-inch Ektacolor print re-photographed from a Marlboro advertising campaign. Arguably Prince's best-known work, the image of a cowboy galloping under a bright blue sky had been the catalogue cover for the artist's 1992 survey at the Whitney Museum of American Art, and it became the most expensive photograph ever to sell at auction when New York dealer Stellan Holm bought it at Christie’s in November 2005 for $1,248,000.

In early 2006, Minor acquired the work from Larry Gagosian for $1.6 million, according to art appraiser Beverly Schreiber Jacoby, president of the strategic art-consulting company BSJ Fine Art. Minor then consigned the piece along with the other Princes to the Christie's-owned Haunch of Venison gallery in May 2008 — and when they failed to sell, the auction house held them as a check against the $12 million that the collector owed for auction purchases. In their lawsuit against the auction house for wrongfully retaining the works, Minor's lawyers hired Jacoby to assess the drop in value that the Prince artworks suffered over the few months they were kept at Haunch, from the apex of the market in mid-2008 to its nadir in January 2009, when Minor resold the four works. “I had to determine damages due to sales at the low-point of the market,” Jacoby said.

Minor sold the Marlboro cowboy back to Gagosian for $1.5 million sometime between December 2008 and January 2009. While that price would suggest that the indebted collector took a $100,000 hit on the sale, Minor argued that he had lost significantly more considering how much he could have sold it for if he had access to the work during the boom's sweet spot.

To calculate what that windfall might have been, Jacoby began with a tidy figure: $4 million, the amount at which Chelsea dealer (and long-time Prince champion) Barbara Gladstone valued the work in late August of 2008, when she was trying to make an unconsummated separate deal with Minor to sell four of his Princes individually. Jacoby took Gladstone’s asking price and subtracted 20 percent off the top — 10 percent for a discount to the imaginary world-class collector who would have acquired the piece, as is custom in the art trade, and another 10 percent for the dealer’s commission. That calculation yielded a value of $3.2 million for the work, had it been sold at the time.

According to Jacoby, Minor’s net hit was $1.7 million — the difference between the work’s estimated value at the height of the market ($3.2 million) and the price for which he sold it ($1.5 million).“I had to show the jury how the market actually works in a realistic scenario,” Jacoby said. “There was a whole trajectory, and it was very straightforward and very reasonable.”  The jury agreed with her arithmetic.

The Prince's radical fluctuations in value over such a short time also reflect a more vernacular methodology, that of a famous art-collecting maxim: if you get it while it’s hot, you’d better sell when the market is raging.