Trajectory
by David Muller

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Chapter Sixteen:
Photorealism

For my next business, I wanted to do something that would be an endeavor that would blend business with pleasure and that Joyce and I could do together. From the time we were first married, we collected art, and in particular, we enjoyed photorealism. Photorealism is a genre of art in which a painting is so meticulously painted that from ten or twenty feet away, one would assume one is looking at a photograph. Only when one gets just a few inches away does one realize that it is actually an oil painting, not a photograph.

We decided to turn our hobby of collecting photorealism into a business.

When we were first married, we went to ArtExpo at the Javits Center in Manhattan and met an artist named Mark Schiff, who had a booth at ArtExpo. We fell in love with two of his paintings, one a huge painting of candy bars at a movie theater, and the other of two Coke bottles, one in English and the other in Hebrew. We felt that we could only afford one of them, so we made a deal with Schiff to buy the candy bar painting. Schiff arranged the shipping to our new home on January Drive in Niagara Falls Ontario. When the crate arrived, both paintings were in the crate, with a note from Mark saying that if we do not want to keep the Two Cokes painting, we could return it to him at his expense, or if we wanted to keep it, we could send him payment for it. Of course, we kept them both, and both paintings have been prominently displayed in all our homes, to this day.

While we were at ArtExpo buying the Mark Schiff artwork, we also came across a booth belonging to Paul Sorota from Boston. In his booth was Kathy Callahan’s wooden bench of Ricky and Lucy. Being the big Lucy fans that we were, we bought that bench as well.

We approached Schiff in May of 2011 and I met with him in Atlanta. He had about seventy paintings that were unsold that he had painted over the decades. We made a deal to buy all seventy paintings.

Interestingly, some years later, I spoke with Kathy Callahan and found out that she had made about eight different benches, each with a likeness of a different celebrity, and that she and Paul Sorota had been sued for copyright violation by the estates of the various celebrities. Kathy mentioned that the Lucy estate was particularly vigilant and unpleasant in their suit and subsequent cease and desist orders. Kathy immediately stopped making the benches as a result of the settlements she entered into with the various estates. Paul Sorota passed away shortly thereafter. Kathy told me that the lawsuits and legal wrangling left such a sour taste with her that she never created any art again; in fact, she is now a hairdresser.

In any case, now that I had some inventory, I quickly realized that I would need to hire someone with some art selling experience to help me come up with a business model. I placed ads on some online art boards and received a myriad of responses. After interviewing several candidates, I ended up hiring Michael Rosen. Michael did not have a lot of experience but he was a good find. He first took a look at the paintings I had bought from Mark Schiff, and Michael said to me, “David, these are good, but I know of someone much better. His name is Doug Bloodworth.” Doug had entered, and won, an art contest that Michael had organized the year before. Michael arranged for the two of us to go to Portland, Oregon to meet Doug Bloodworth.

We flew to Portland and upon seeing Doug’s photorealist paintings, I agreed with Michael right away that Doug’s work was in a different league. Doug painted large paintings generally incorporating a comic book, a drink and some food like a chocolate bar or some candies.

I was astonished that Doug had had no commercial success whatsoever to date. Michael told me there were reasons for this. In any case, I offered Doug a lifetime contract; that is, I offered to buy all the paintings he had in his studios and all the paintings he would create forever. That is how much I believed in his abilities.

Given what I had heard from Kathy Callahan, I was amazed how Doug was able to get permission to use all these copyrighted names in his artworks; I thought that must have taken a tremendous amount of work to organize all that and contract with all these copyright holders. For example, one of his paintings was a photorealistic painting of Curly from The Three Stooges, and the painting is so well done that one would swear it is a photograph. When I asked Doug about all these copyrights, he looked at me like I had two heads and said that he never contacted anyone and did all this without getting any permission to use the copyrights.

I researched and found out about a lawyer named Joshua Kaufman at Venable in Washington, DC. Mr. Kaufman is one of the world’s authorities on the use of copyrights in art. Kaufman explained to me that the use of the copyrighted images in works of art is illegal without the agreement of the copyright holder. I came to discover that there is an entire industry devoted to the “monetization” of copyrighted images. Furthermore, there is a whole sub-segment of this industry called the right of publicity. The right of publicity refers to the fact that a celebrity owns the rights to his or her own likeness. Therefore, if someone wishes to produce a good for sale that has on it a likeness of a celebrity, then one must get the permission of that celebrity, or in the case of a celebrity who has passed away, the owner of that celebrity’s right of publicity, which is whomever the celebrity designated in their will to be that owner. The acquisition of the right to use that likeness is called a license. In the case of most celebrities, that right is owned by their progeny. And the progeny most often hires a company that specializes in this field to manage the licensing of the images.

Interestingly, the right of publicity for the image of Albert Einstein is owned by the Hebrew University in Jerusalem, to whom he willed his right of publicity.

Because of our family’s love of Lucy, as described elsewhere in this book, Lucy was the first copyright we wanted to license. I cold-called Lucy’s daughter, Lucie Arnaz Luckinbill, who was very nice and put me in touch with the people whom she and her brother paid to take care of the licensing for I Love Lucy. Unfortunately, Lucie and her brother, Desi, Jr., with whom I also spoke, had hired some friends to take care of the licensing instead of a professional firm that does this for a living. The friends turned out to more interested in making money by suing non-licensees (a la what they did to Kathy Callahan with her benches) than with working to sign up licensees and maximize revenues that way. We did end up signing a license with them; however, because of their way of doing business, it amounted to very little.

Here is an interesting tidbit with regard to licensing. We wanted to produce a painting of the famous Candy Factory assembly line scene in the I Love Lucy episode “Job Switching”. The reader might recall that it was Lucy and Ethel on the assembly line, and the boss in the middle who says, “Let Her Roll”. The actress who played the role of the boss was Elvia Allman. Interestingly, the right of publicity of Elvia Allman was owned by her heirs, not by the owners of the I Love Lucy copyright. Therefore, when our artist created a preliminary sketch of the scene, we were told that the artist had to paint the scene without the boss in it, because our contract with the I Love Lucy people did not include the right to use the likeness of the actress in the middle. And sure enough, our artist in fact did paint the scene without the boss in it!

The second license we wished to contract was for the Three Stooges: Larry Fine, Curly Howard and Moe Howard. In this instance, I got in touch with Larry’s grandson, Eric Lamond, to find out who to contact to license their images. His response was, “You have reached the right person!”. Interestingly, several of the grandchildren take care of the licensing instead of using professionals. In this case, the process was much easier, and several of our artists produced artwork using the Three Stooges likenesses. The most amazing of all the pieces was a life-size bench created by Doug Bloodworth, hand-carved and hand-painted. It is truly an amazing work of art.

As a result of our licensing of The Three Stooges images, I took a trip to the Stoogeum, a private museum in Ambler, Pennsylvania, dedicated to the appreciation of the Three Stooges, and I spent the day with the owner, Gary Lassin. His is a great story. Gary was Brandeis ’77 and was the heir to the Harriet Carter Catalog fortune, and all his life, he was a Three Stooges fanatic. One day he went on a blind date with a girl named Robin Solomon. During the date, she happened to mention in conversation that she was related to someone famous, but she would not say whom. He finally cajoled it out of her, and the relative turned out to be Larry Fine of the Three Stooges. To quote Gary, “I knew right then and there that I had to marry her”, and in fact, he did.

Interestingly, the Lassins and the Stoogeum have nothing to do with the grandchildren who own the rights to the likenesses. I never did quite figure out why but I got the sense that there was some animosity there. On every page of the Stoogeum’s website, it states: Please note that the Stoogeum is not in any way affiliated with C3 Entertainment (which is the company that the other grandchildren own).

As an aside, after several years dealing with licensing companies, my experience was that both the Lucy heirs and the Stooges heirs could make a sizable amount of money annually if they contracted with a professional licensing firm to take care of these licenses. They probably enjoy handling it themselves, but I get the impression that they don’t make much money from them compared to what they could if it were in professional hands.

Selling Art

Our next step was to get our art into stores. Michael and I travelled from city to city around the country to meet with art retailers. Having been in the food business and selling my products to food retailers, I figured that the sales process would be similar. In the food business, the manufacturer or wholesaler sells the goods to the retailer and then the retailer sells the goods to the consumer.

We quickly learned some very interesting lessons about how the art retailing market works, and let us just say, it is not in any way similar to the food business. Here are some of the lessons we learned along the way.

Lesson #1

Art galleries do not own the art that is on their walls. When we went around asking the stores to buy our works for resale, they laughed at us and then explained to us how it works. They explained that there are dozens, hundreds, thousands of artists trying to get their artworks to be sold by art retailers.

Thus, the gallery not only does not buy the art, they actually charge the artist, or in our case the dealer, a wall rental fee to have the art on the wall. Then, if the art sells, the retailer pays the artist or dealer an agreed-upon percentage of the sale price, usually anywhere from 35% to 50%. In other words, we had to give the artwork to the retailer for them to hang on the walls of the gallery, and only if and when the store sells the artwork do they then remit a portion of the sale price to us. The percentage of the sale price that the retailer would remit to us was a negotiation, separately with each retailer. When a piece sold and the retailer remitted our share to us, we would then ship a replacement piece to that retailer. In the meanwhile, we had to pay them a weekly fee for having the art on their wall.

Lesson #2

Most art galleries sell original paintings, and they also sell photocopies of paintings. There are many names for these photocopies. They can be called lithographs, serigraphs, giclees, embellished giclees, prints, posters, limited editions or unlimited editions. Most people walking into an art gallery have little idea that most of what they are seeing are photocopies with little or no resale value.

Lesson #3

Some art galleries have a business model that is based upon deception. They either make their own “photocopies” or they buy photocopies from a printer. Most times these have numbers in the bottom corner like 34/150, which makes the buyer think that they are limited in some sense and thus have value. All of these share the same characteristic, namely that for the most part, the exact same piece can be bought on eBay for a small fraction of the price that is being asked by an “art gallery”.

This business model was brilliantly explained in Lee Catterall’s great book The Great Dali Art Fraud and Other Deceptions. If you get nothing else out of this book, from hereon in please do not purchase any piece of art without reading Catterall’s book.

Lesson #4

Artists do not singlehandedly produce their art. Over the course of my years in the art business, I was in several buildings that can be described only as art factories. “Artists” on either side of a moving conveyor belt each add a certain stroke to a canvas, with the resulting piece of art being an “original” oil painting. Even the signature is done by someone else. The buyer has no idea.

Lesson #5

Some art galleries exist in order to sell the works of one artist only, and that artist is usually the owner of the gallery or the spouse of the gallery owner. One gallery that we did business with was owned by the son of the artist. The artist created all different sizes, shapes and colors of ceramic hearts, created in a factory but all signed by the owner’s mother. The gallery sold the works of other artists as well, including ours. I came to find out that the salespeople got paid a commission of 16% of the sales price for any pieces of the mother’s that they sold, and 8% of the sales price of any other artist. Guess which artist they steered their customers to.

Lesson #6

Some galleries sell only art made in China. There is a town in China called Dafen where thousands of talented artists paint from morning until night. They are paid on average five to ten dollars per painting. There are many “art galleries” in America that have these paintings signed by an artist whom they then promote as valuable and collectible. I cannot tell you how many times I have seen good honest people duped out of thousands of dollars by the gallery owners, in front of my eyes. If you get nothing else out of this book, please go to youtube and type in “Dafen counterfeit” before you enter any “art gallery” in the Western world.

Lesson #7

The genius of a Mark Schiff or a Doug Bloodworth is that they paint these amazing paintings on a blank canvas. What we found out over time is that this is not always the case. Over time, we visited several artists’ studios where the artist had a photo projected onto a canvas, and then the artist just painted the projection onto the canvas. But worse than that, we came across several artists who actually print the photo onto a canvas and then paint the photo. In fact, one of the most famous photorealists of our era, whose works sell for huge money, uses this technique. This is unknown to the buyers, but is known to his dealer, the retailer; in fact, it was from him that I first learned this information – he leaked it by mistake.

Having said all that, for the most part, the retailers, or “gallerists” as they like to refer to themselves, liked our pieces a lot and were willing to carry them without us having to pay the entry fee. Within a year, we were in about one hundred galleries throughout the US and Canada, and also a couple in Europe. Most of the galleries were in heavily tracked tourist destinations, but not all.

By the end of 2012, we were selling dozens of pieces per month and making nice money. We took on more artists, in particular Jim Jackson and Ralph Stearns, former co-workers of Bloodworth, and also Cesar Santander, Randy Ford, Marcel Franquelin, Amanda Cook, Gerard Boersma and Johannes Wessmark. We also took on Rich Conley, who was not a photorealist but rather a caricaturist, but whose works we also did well with.

Over the next few years, however, changes in technology led to dramatic shifts in the art retailing industry. The advent of online marketplaces such as 1stdibs, Amazon Art, artnet and askart totally decimated many art retailers very quickly. Almost on a dime, collectors stopped going into art retailers and started buying everything online. Within three to four years, almost every one of our retailers closed down; they simply could no longer pay the rent with their drastically reduced revenues. Unfortunately for us, because many of the retailers were so far away from us, in many cases, we did not find out that they had closed until weeks or even months after it actually happened, and in most cases, we never did see our artworks again. In some cases, I would travel to the gallery and find it completely gone, replaced by another store or simply completely empty, with no response to phone calls or emails.

We shifted business models as quickly as possible, and flew to meet with the representatives from 1stdibs, Amazon Art, artnet and askart. We posted the artwork for sale on these sites, learned about Search Engine Optimization, Google Pay Per Click and Facebook Ads, and within a few months, we were selling as much online as we had previously through the galleries. The difference was that instead of keeping only half of the selling price and the retailer keeping the other half, in the case of the online portals, they charged a small monthly fee, but then they kept only eighteen percent of the selling price. As a result, our gross margins rose dramatically. The biggest expense became the cost of the advertising, especially Google Pay Per Click. We paid for every click, but only a very tiny percentage of those who clicked actually were interested in making a purchase. As a result, our net profitability did not improve that much even though our gross margin did improve a lot.

This exercise made me realize why Google is the most profitable company in the world. We spent so much time trying to figure out which keywords to use and how much to bid per keyword. One thing we came to realize, after spending a lot of money before we realized it, is that most people searching the word photorealism are actually looking for tattoo parlors or video games! That cost us a lot of money to figure out.

As I discuss elsewhere, in February 2017 when my father died, I had to put the art business on hold in order to focus on running my father’s businesses. In essence, that meant turning off the Google pay-per-click and the Facebook ads, which between the two generated almost all of the sales.

Dali and Haring

Michael Rosen also got us involved in another endeavor tangential to our art business. In 2012, Michael arranged a show called Dali Miami, an exhibition at the Moore Building in Wynwood in Miami. It was an exhibition of some Dali artwork belonging to various people that Michael knew in the area, in particular an eccentric chiropractor Barry Burak and an art dealer Reed Horth. We underwrote the show. It was a mediocre show and not well curated, but we did get our money back and I was fine with that.

The next year, Michael approached me again, this time with a proposal to do a Keith Haring show along the same lines in the same location. I agreed to fund it. What I did not know was that the entire show was the collection of one Elizabeth Bilinski, who had been fighting for years with the Haring Foundation over the authenticity of the pieces. The Foundation had claimed for years that her entire collection were fakes. Just after the show opened, the Foundation filed a lawsuit against the show demanding the immediate closure of the show and suing for millions in damages. The lawyers for the Foundation were a major New York law firm called Proskauer. We were completely blindsided and had no time to hire a law firm or prepare a defense. The potential monetary loss to us had they prevailed was so huge that we had no choice but to cave in and close the show. I lost my entire investment (and I was the only one with any money in it).

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