$100 mn skull: It’s all for the love of lucre

$100 mn skull: It’s all for the love of lucre

Damien Hirst will be remembered for many things. His craftsmanship with pickled sharks, say, or his skill with impaled butterflies. But his art world legacy has probably been sealed by the $100m sale of his diamond-encrusted skull—“For the Love of God."

Yet, his singularly commercial achievement—cementing the highest price ever paid for a work by a living artist—may signal a turn in the art market.

Huh? The sale, to an unnamed investor group, surely sounds like something to celebrate—perhaps with a toast drunk from the masterpiece itself. But, as an investment, this skull should be studied like any other asset.

Consider the “bid and ask spread" on the 18th century human skull, swathed in platinum and studded with 8,601 diamonds. There wasn’t one—Hirst received his asking price. Compare that to May’s auction of Mark Rothko’s “White Center." The painting sold for $73 million. That “bid" was far higher than the $50 million unprinted estimate, or “ask," quoted by Sotheby’s ahead of the auction.

Or look at Hirst’s glittering cranium a different way - replacement cost. Hirst’s creation required $24 million of raw materials, split with his dealer and assembled with the help of Bond Street jewellers Bentley & Skinner. In this respect, the price paid represents just four times the cost of production. Compare that to the few centimes that Van Gogh required for oil paints and canvas to create his “Portrait of Dr. Gachet"—sold for $117 million in 1990. Hirst is hardly getting a big multiple of book value.

This doesn’t mean Hirst did poorly. Assume he had to split the $100 million with the White Cube Gallery, which displayed the bling skull.

Even if half that profit was split with his dealer, Jay Jopling - who financed half the cost of the materials—that leaves the young British artist with $13 million after deducting his original investment. But, if the art market is really turning, perhaps Hirst should go back to the sharks. The upfront investment is a lot lower.