$40 Million

I read in June’s issue of Art News that Steve Wynn seems to have dropped his lawsuit with Lloyd’s of London over Le Rêve. If you’ll remember, this is the painting Mr. Wynn popped an elbow through while showing it to friends. His claim, interestingly enough, is that this reduced the value of the painting by $54 million dollars. It turns on the fact that he apparently had a private agreement to sell the painting for $135 million the day before the accident.

If I had the money, I would buy it for $85 million, and be happy I did. What’s interesting about this is that the criteria used to value this painting rests on a fleeting fact – that a ‘whole’ Picasso is worth more than a damaged one. But this is only because many of the Picasso’s now are still whole.

But what about a few generations from now, when many more of Picasso’s now pristine paintings are ripped, torn, dropped, stained, and otherwise damaged in the course of their lives? As this begins to happen, the value of the Dream will turn less on its damage and more on its ‘importance’ (an otherwise-critical criterion used to value paintings). At that point, its repaired elbow-hole may well become part of its provenance, proof of its storied history! In other words, I would guess that the value of this painting over its lifespan may be artificially depressed by the accident, and a with a sufficient time-horizon it’ll be back where it was. Sure, opportunity costs, costs of capital, etc. But if you enjoy the painting itself, there’s obvious, incredible, cultural value to owning it, above and beyond letting it ripen as an investment.

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