Nov. 28 (Bloomberg) -- Samuel Keller is commander of the U.S.'s biggest contemporary art fair, Art Basel Miami Beach, which will open on Dec. 1 to an estimated 33,000 visitors, or about the same as last year.

Sales, which often coincide with a wash of cocktails at local parties, have been estimated at $90 million last year by a rival fair director. Galleries, from New York's Gagosian and PaceWildenstein to Zurich-based Hauser & Wirth, may rake in 25 percent more this year, judging from results this fall at fairs in London and Cologne.

``Art collecting is the hip thing for wealthy people to do,'' says Basel-born Keller, 39, who shaves his head and favors turtlenecks. ``To buy art has proved quite a good investment over the years for people who knew what they were doing.''

Part of Keller's job is to pamper collectors and museum curators, police the quality of art hawked by 195 galleries, and fend off competition from rival fairs.

That's easier in a boom. A new breed of collectors has nearly quadrupled contemporary prices since 1995 by buying art for homes, private museums or speculative investments. The Rubells, Martin Margulies and Craig Robins are among those expanding collections in the Miami area. Billionaire Eli Broad paid $23.8 million for a David Smith sculpture at a November auction in New York, reported Artinfo.com.

`The New Million'

``Having a million dollars on your wall no longer carries cachet,'' says London gallery owner Kenny Schachter. ``Today, $25 million is the new million.''

Miami's fair moved up a notch in prestige this year by luring David Rockefeller, a former Chase Manhattan Bank chairman, and U.S. pop artist Robert Rauschenberg as official guests for the first time.

Rockefeller will discuss art and philanthropy on a Dec. 2 panel with Broad, former chairman of AIG Sunamerica Inc. Glenn Lowry, director of New York's Museum of Modern Art, will talk about running museums on Dec. 1.

Fifty-five galleries are new this year, including New York's Sonnabend, Michael Werner, a specialist in German contemporary art, one Russian and some Latin American galleries. Keller won't talk about the 20 percent of exhibitors he filtered out. ``Everyone has to reapply every year,'' he says.

The Art Kabinett is new, featuring shows by 15 galleries of Rauschenberg works never shown before, fresh Chris Ofili pieces and drawings by Alex Katz.

There are at least 2,700 VIPs, including six chosen by each gallery, along with 1,500 museum trustees.

Summer Job

Keller joined Switzerland's Art Basel -- the top contemporary fair, and Art Basel Miami Beach's parent -- in 1994 as communications manager, after studying art history and working summers at the fair. Director since 2000, he set about launching the Miami fair that year -- meeting competition from U.S. fairs head-on.

While Keller won't give sales numbers, Miami's fair may do around $110 million this year, estimates Art Cologne's Gerard Goodrow, who tracks rivals' results.

New York's Armory Show said it took in about $45 million in March. London's Frieze Art Fair reported October sales of $57 million, up 27 percent. Art Cologne closed Nov. 1 after taking in about $85 million. Including New York's November auctions, collectors of contemporary art this fall may have spent more than $600 million by the time Miami's fair ends on Dec. 4, based on published figures and fair directors' estimates.

``We're all benefiting from the boom,'' says Goodrow.

Art Basel fairs are owned by Basel's MCH Swiss Exhibition Ltd. Sponsors, led by Swiss bank UBS AG, include Bulgari SpA, NetJets Inc., Bayerische Motoren Werke AG, and Bloomberg LP, parent of Bloomberg News.

Keller talked to me on Nov. 17, between trips, on the telephone from Basel.

Collector Status

Linda Sandler: A lot of money is washing into contemporary art. What do you think collectors hope to gain?

Samuel Keller: At the moment, art is the favorite culture of wealthy people. The status of the collector in society has never been as high. People also see gains in value, and this confirms them to buy more art.

Sandler: Miami is known for attracting upper-tier celebs and speculators -- everyone from Michael Ovitz to Steven Cohen. Is that why it's successful?

Keller: Would the best galleries be returning every year if it was just celebs and speculators? The main people who make the art fair are the collectors and the professionals -- artists, galleries, curators, trustees. This year, 90 U.S. museums are bringing 1,500 or more trustees. We started with 40 museums, and last year we had 80.

We don't do anything actively to attract celebrities. We do not even have a celebrity database. It's just a nice side effect.

Partying

Sandler: How many parties are associated with Art Basel Miami?

Keller: Around the fair, there are maybe over 100 private dinners and parties. They contribute to the flavor. Art Basel Miami has an official reception and a goodbye party. Collectors and museums have events that are art-related.

Sandler: Do you ever worry that the partying or the speculative atmosphere will embarrass your sponsors?

Keller: Art Basel is very strict. There are no cocktails or food in the art exhibitions. If visitors to the fair want to drink outside, it's their own decision. We are not encouraging it.

You cannot control everything outside. I always tell people, the concept of Miami is an open thing. We've never had a problem for sponsors.

Price Markups

Sandler: Of course it's a free market, but do you monitor the galleries' markups? At the Swiss fair in June, Karl Schweizer from UBS said some prices had been marked up 2 1/2 times since the last auction sales.

Keller: We'll show over 2,000 artists. We are not monitoring prices, and it would be difficult to do.

One can say that most contemporary works are more expensive at auction than at galleries. Art Basel gives you access to the galleries and creates a real market.

Smart galleries plan the career of their artists long term, and they prefer a steady rise in prices.

Sandler: What happens if there's a crash, and people realize they bought all this stuff at the peak?

Keller: Some people will be very happy with the art they bought. Some people who speculated or followed fashion will find out that prices are not only going up but can go down.

Sandler: I saw you at Frieze and Cologne going around the galleries every day. Is that partly how you decide who comes to Miami?

Keller: The main work I do at fairs is to visit the galleries who come to Art Basel fairs, or are candidates. I like to see what they're doing and establish a dialogue, I ask if they have any wishes.

This fall, I've been in Istanbul, Berlin, Paris, London, Cologne and the New York auctions.

VIP Perks

Sandler: Who decides which VIPs get most privileges?

Keller: They're selected by the galleries. Art Basel doesn't invite anybody, or pay for plane tickets or hotel rooms, except for a handful of panelists or curators.

Sandler: How much are booth prices up this year?

Keller: They're up 10 percent. It's now $55,000 for the largest booths. It's still cheaper than the New York Armory.

Sandler: How much must a gallery sell to cover costs?

Keller: They need to sell three to 10 times their costs to break even. It depends if they're selling primary or secondary works, and how much they pay for transportation and insurance. A big gallery would not consider it successful unless they sold more than $1 million.

Sandler: Will you expand to other cities -- Mexico City, Tokyo, Hong Kong, London, New York?

Keller: We've been invited by a dozen major cities to consider them as a possible venue. We have no plans to expand.

To contact the reporter on this story: Linda Sandler in London at lsandler@bloomberg.net.

Last Updated: November 27, 2005 20:54 EST