Section Description Provided by Instructor
In recent years, the global art market has grown in size, geographic diversity and in importance in the economy. The global art market reached approximately $67.4 billion in sales in 2018. Art transactions are also financial transactions and, as such, they should be built on strong legal frameworks; a necessity that, as the market expands, most art market players are increasingly aware of.
Until fairly recently, the art market was viewed as an area for relatively closed circles of the wealthy and elite with transactions being largely based on trust and not on extensive, or indeed any, legal documentation. As the market has expanded both in size and geographical outreach with many new players on the scene, and in line with ever increasing compliance obligations, the need for a professionalized legal documentation of art transactions has become evident to most market participants. Additionally, as art has increasingly come to be viewed as an investment asset class, many art transactions have become highly structured capital market transactions.
This course will give students an overview of the most prevalent legal issues encountered by participants in the art market, as well as legal considerations involved when art is the asset class. We will also study and analyze financing structures where art is the collateral. The last three days of the class will be devoted to simulation exercises. In a first set of exercises teams of students will represent artists, dealers, collectors and museums and gain an understanding of basic situations and issues relevant to market participants. The final two days of the class will be devoted to a more complex and specifically finance-related exercise in which teams of students will each be asked to develop and present a proposal to a team representing a client as to how to structure a fine art backed lending program for the client.