U.S. art galleries project 73% loss in Q2 revenue due to COVID-19 developments

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U.S. art galleries project 73% loss in Q2 revenue due to COVID-19 developments
Planned Art Fair Participation.

NEW YORK, NY.- The Art Dealers Association of America reports that art galleries across the U.S. project an overall gross revenue loss of 73% in the second quarter of 2020 and have already seen an overall 31% loss in revenue for quarter one, as a result of developments from COVID-19. While 85% of full-time gallery staff have retained their positions, 74% of the contractors that galleries had regularly engaged prior to March 13, 2020 are no longer employed.

The data is drawn from a survey of leading galleries across the United States, conducted by the ADAA between April 15 and May 4, 2020, to assess the impact of COVID-19 on art galleries–the art world’s core group of small businesses–which play a critical role in the cultural vitality and economic health of the arts and culture ecology in the U.S. and globally. 168 galleries across the country participated in the survey, spanning members of the industry’s leading organizations of national and regional art dealers, including the ADAA, Gallery Association Los Angeles (GALA), Houston Art Gallery Association (HAGA), New Art Dealers Alliance (NADA), San Francisco Art Dealers Association (SFADA), and Portland Art Dealers Association (PADA).

Providing insight into the effects of COVID-19 developments on the art world’s small business community, the results have both near- and long-term implications for the thousands of art dealers across the country, as well as the vibrancy, diversity, and economic vitality of the national arts ecology in which galleries play a central role. Galleries’ devastating revenue losses, reduction in business activity, and closures of their physical spaces not only financially impact their employees and vendors, but artists and creative professionals around the world. Artists rely heavily on galleries for income from art sales, and as a major force in fostering their careers by sponsoring the creation of new work; helping to place their works in collections of major institutions; and developing exhibitions and scholarship about their practices through gallery programs, publications, and other platforms worldwide. Prior to March 13, 2020, respondents employed more than 1,035 full-time staffers and 521 contractors, and they currently represent 2,421 living artists and 340 artist estates.

The financial impact of COVID-19 lockdowns was swift and immediate for respondents. In addition to the revenue losses that have already occurred and are projected for the rest of the quarter, a pressing concern for galleries is the overhead for their physical spaces.

• A majority 80% of respondents rent their spaces.

• Only 51% of respondents had received accommodations from landlords, such as deferred payment plans or rent reductions, at the time of the survey.

• Of those that have mortgages, only 14% had received accommodations from their lenders, such as deferred payment plans, at the time of the survey.

Galleries report enormous uncertainty regarding revenue projections for the rest of 2020 and are reducing or foregoing participation in art fairs, which represented nearly 50% of galleries’ annual sales in 2019, according to The Art Market 2020 report by Art Basel and UBS.

• 28% of respondents do not plan to participate in any art fairs for the remainder of 2020.

• Only 47% of respondents plan to participate in at least one art fair for the remainder of 2020.

• 25% are undecided about whether they will participate in any art fairs for the remainder of 2020.

“The survey results underscore the enormous role that galleries play in the well-being of the arts and culture economy and landscape in our country, not unlike the role of small businesses across every industry. While the survey is focused on near-term impact, the implications are far-reaching and long-term for art galleries and the even greater number of employees and artists they support, both financially and as key partners in fostering their practices and careers. Such immediate and devastating revenue losses will undoubtedly have a ripple effect on these small businesses and the broader arts community for the next 12 to 18 months if not longer, and it is still uncertain how long such losses may continue. It is essential that federal, state, and local governments take further action to ensure that the small business community, including art galleries, have access to the critical support that is needed if they are to sustain their businesses for the long-term and continue their essential contributions to the nation’s vibrant arts and culture landscape,” said Andrew Schoelkopf, President of the ADAA and Founder of Menconi + Schoelkopf, and Maureen Bray, Executive Director of the ADAA.

The COVID-19 Impact Survey of U.S. Art Galleries is an extension of the ADAA’s ongoing initiatives in support of its members and the gallery community throughout the year and during the COVID-19 crisis. The ADAA has been providing members with access to industry experts, webinars, and other resources to support them in navigating the current crisis. In terms of policy solutions, the ADAA and its members have been advocating since March that the New York State Senate pass Senator Michael Gianaris’ proposed Senate Bill S8125A that would provide rent and mortgage relief to galleries, as well as artists, freelancers, and contractors.

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