Is "Blue Poles" the most valuable work of Contemporary Art?

Jackson Pollock worth $350 - $500 million

In 1974 the Australian Government purchased Jackson Pollocks masterpiece “Blue Poles” for the newly established National Gallery of Australia. It caused mass outrage and marked one of the first times that a single art work was front page news across the Australian press. With the rise and rise of the international art market frothed on quantitatively eased exchanges, the ever increasing growth of those with hyper-wealth and the emergence of interest from new emerging markets such as China it makes sense to establish what a present value for this Australian foray into abstract art could possibly be worth. 

Perhaps the best way to establish a loose metric on which to derive value and in doing so take a light-hearted look at the implications this result has for the Australian collective is to consider what the present liquid market is for an important work by the artist. It was as far back as May 2013 that the most recent secondary market sale for an important Pollock painting occurred. “No. 19” was painted by Pollock in 1948 and by the artist’s standards, is a very small work measuring only 78.5cm x 57.5cm – a household size painting. In all honesty, unless a viewer is familiar with the artist’s style, then you could very easily pass over it as a work of abstract expressionism. For most Australians uneducated in the finer subtlety of early abstraction most would refer to it in a term I commonly hear from those first considering a significant art purchase “it looks like something my kid could do”!

For the benefit of this little exercise it is worth providing a bit of background on No. 19. I have no idea what a work like this would have first been bought for from a gallery. I imagine with the publicity and acclaim the artist was receiving in the late 40’s it would have been relatively expensive but certainly not prohibitively so. What we do know is that this is a painting from a key series of work – in 1948 Pollock was at the height of his powers, prior to his career and work taking a dark turn in the mid 1950’s. Ultimately in his self-destruction via alcoholism finally lead to his death in 1956 in a car crash whilst under the influence. Interestingly, this painting last traded at auction in 1993 and sold for a then very high price of US$2.4 million. So in the last few decades the work has delivered a 2,317% return, or in investment terms a 17.26% compound annual growth rate (CAGR). 

Paintings can’t be valued in terms of square meterage… however considering that Blue Poles is a very large work for Pollock, arguably a far more important and therefore more valuable painting than the meagre and relatively measly No. 19, lets extrapolate what Blue Poles might be worth if this simpleton’s strategy for valuation were to be applied: 

No. 19 measures: 78.5 x 57.5cm, therefore is 4513.75cm square. From a purchase price of $58 million this means that each square centimetre is worth $12,849.63. 

Blue Poles measures 210cm x 490cm, therefore 102,900cm square. So if we multiply the area by the per square centimetre value, that makes Blue Poles worth US$1,322,226,927 ($1.3 billion) and thus provided a 18.26% CAGR over the last 40 years. 

Now, Blue Poles is not worth this much, and no strategy of this kind can ever be applied to Blue Poles (or any other painting of merit) to define value, but it would be easy to make the assumption that the work we all own as Australians is worth circa $350 - $500 million. Certainly the upper range is absolutely realistic given the past 18 months and the records for historical masterpieces such as Di Vinci's highly controversial painting acchieving $400 million + at auction. 

This new reality leaves us to draw certain outcomes:

a) The National Gallery better make sure that their insurance policy is up to date

b) We as Australians own a work that would undoubtedly set the world’s highest price if we sold it at auction

c) Australian Governments have historically (perhaps by luck) made good investment decisions!

Alongside this acquisition in 1974 they spent $650,000 on a Willem de Kooning painting (albeit not to any such similar controversy). Food for thought that that particular de Kooning’s sister painting sold some 12 years ago for US$131million!

Blue Poles can be found on display at the NGA in Canberra alongside other important International works and an outstanding collection of Australian art, it is worth getting along and seeing these as, after all, we all own them and what other performing market can you truly appreciate what you are investing in?

4 February 2019