Passing on a gallery: The silent challenge of the art market

01A blind spot in the art market

The Art Basel/UBS 2023 report estimated that the global art market generated 65 billion dollars in transactions that year. But behind these figures lies a structural fragility rarely raised at fairs or on panels: the question of succession. Unlike auction houses or large private foundations, galleries are deeply personal structures — often limited liability companies or equivalent entities carried by a name, a vision, a contacts book that legally belongs to no one but their founder.

The TEFAF 2022 report estimated that the median lifespan of an art gallery does not exceed ten to fifteen years, and that the majority of closures occur not during an economic crisis, but in the two to five years following the voluntary or forced departure of the founder. This statistical reality — discreet, little covered in the press — reflects a fundamental problem: the art market has developed sophisticated instruments for valuing a work, but almost none for evaluating, transferring or sustaining a gallery as an entity.

02What a gallery is really worth

When a gallerist decides to sell or pass on their business, the first difficulty is precisely this: what is actually being handed over? A commercial lease, a stock of works, a collector database, exclusivity contracts with artists — and a reputation built over twenty or thirty years of risk-taking.

The problem is that the vast majority of this value is intangible and non-contractualised. Artists are generally not bound by binding exclusivity contracts — at least not in the common practice of the French market, where the gallery-artist relationship has historically rested on trust and reciprocity rather than formal long-term agreements. The ADAGP and resale rights protect artists in secondary sales, but nothing guarantees a buyer that a leading artist will remain with the gallery after the departure of its founder. This is precisely what the New York gallery Marlborough experienced after the death of its founder Frank Lloyd in 1998: several major artists gradually redirected their representation elsewhere, taking with them a substantial share of the house's commercial value.

The physical stock itself raises complex questions. Works held on consignment — a common mechanism in France, where the gallery sells on behalf of the artist without transfer of ownership — do not form part of the gallery's assets in the strict sense. Which means a buyer can acquire a structure and find themselves facing bare walls if the artists withdraw their consignments.

03The tyranny of the contacts book

If you ask any experienced gallerist what forms the heart of their activity, the answer is invariably the same: relationships. With artists, of course, but also with a network of collectors that some have spent twenty years building. This network — its preferences, its trust, its buying habits — is precisely what resists any form of formal transfer most stubbornly.

Galerie Chantal Crousel, founded in Paris in 1980, illustrates the complexity of this human legacy well. Crousel built a demanding programme oriented toward the international scene — Mona Hatoum, Thomas Hirschhorn, Danh Vo — with a rare intellectual consistency that rests largely on her own sensibility. When the gallery progressively brought Niklas Svennung into its leadership, the process took several years, with a period of public co-presence allowing artists and collectors to grow accustomed to the new voice. It is one of the most successful models of succession observed on the Parisian market, precisely because it was not rushed.

At the opposite end, abrupt successions — death, illness, breakdown — often leave a void that nobody is prepared to fill. The collector database exists somewhere, but without the memory of conversations, tastes, reservations and the moments when trust was built, it is worth little more than a list of names.

04The models of succession that work

A few models have proven their worth, and observing them closely allows us to identify some fairly distinct logics. Family transmission is the most intuitive but not necessarily the most robust. Galerie Templon, founded in Paris in 1966 by Daniel Templon, managed to integrate the next generation while retaining a strong identity — but this kind of continuity requires a convergence of vision between generations that is far from automatic, and heirs who genuinely wish to take up the torch.

The rise of an internal collaborator represents a more common alternative in today's market. At Hauser & Wirth, the structure progressively institutionalised itself with an expanded leadership team, programme directors for each city, and an organisation that no longer depends on a single personality. But this corporatisation model — possible for a gallery that has reached a critical size with spaces in New York, London, Los Angeles, Zurich, Somerset, Hong Kong and Los Angeles — is out of reach for the vast majority of mid-sized galleries.

For those — let us say galleries with one to five employees, around fifteen artists on the programme, present at one or two international fairs — succession most often passes through a quiet sale or merger with a competing or complementary structure. These operations rarely happen at fair value, for lack of appropriate valuation tools and natural buyers in a market where nobody has a real interest in formalising transactions that might alert artists or collectors.

05The legal and fiscal framework: poorly mapped terrain

In France, the transfer of an art gallery benefits from no specific provisions. It is treated like any other sale of a business or company shares, with the usual fiscal implications — capital gains, registration duties, potential inheritance tax if the transfer is within the family. The Dutreil arrangement, which allows for partial exemption on gratuitous business transfers under conditions of commitment to retain shares, can apply, but its use in the cultural sector remains marginal, for lack of an appropriate legal culture within the galleries themselves.

The Comité professionnel des galeries d'art (CPGA) has repeatedly drawn attention to this institutional void. The absence of a specific status for galleries — unlike independent bookshops, which benefit from regulatory protection in several European countries — weakens the entire commercial fabric of the primary market. A gallery can close overnight with no legal obligation on anyone to ensure continuity of commitments to artists, the return of consigned works or the management of works held on deposit.

The question of resale rights further complicates matters in transfers involving a secondary stock: works resold above 750 euros trigger a payment due to artists or their rights holders, managed by the ADAGP. A buyer who does not anticipate these charges in their valuation may find themselves facing significant unforeseen costs.

06The rising generation facing a concentrated market

The question of succession presents itself differently for young galleries founded in the 2010s. These structures — often founded by former assistants at established galleries, or by collectors who have changed direction — immediately absorbed a more precarious environment: rising rents in the historic gallery districts, growing costs of fair participation, and competition from an online market that erodes margins on less expensive works.

In Paris, spaces such as Balice Hertling and Crèvecœur have built internationally recognised programmes over a decade, with artists shown at Liste Basel or the Fiac. But their economic model remains fragile, and their transfer value — should their founders need to step away — would be even harder to quantify than that of a gallery established for thirty years.

This paradox deserves to be stated plainly: the more recent a gallery and the more strongly it is driven by a personal vision, the less transmissible it is in its current form. And the older and more institutionalised it is, the more costly and complex its transfer becomes. This is not an inevitability, but it does require thinking about succession not as a one-off event, but as a structural dimension of running a gallery — on a par with programming or pricing policy.

07Thinking about succession before it is forced upon you

The galleries that endure over time share one thing in common: they anticipated the question. Marian Goodman, who founded her New York gallery in 1977 and has for decades represented artists such as Gerhard Richter, Chantal Akerman and William Kentridge, gradually brought her daughter Leslie into the co-presidency — not in a rush, but with a long-term logic in which succession was conceived as a continuous process rather than a rupture.

This approach requires accepting an uncomfortable reality: a gallery is not only an artistic project, it is also a business whose value must be documented, whose relationships must be at least partially formalised, and whose future cannot rest exclusively on the memory and contacts book of a single person. This does not mean betraying the spirit of the gallery — it means giving it the conditions to survive beyond its founder.

The art market devotes considerable resources to certifying the value of a work: appraisals, price databases, provenance protocols, attribution registers. It is time that a comparable reflection engaged with the value and longevity of galleries themselves — those structures that, for decades, have made the very existence of this market possible.