The big auction houses have ripped up their usual autumn schedule and have packed October with a huge array of auctions, more a ‘eat all you can buffet’ than a carefully curated and planned series. As MutualArt blog wrote, the auctions are trying to cash in with as many lots as possible “in today’s half-certainty versus tomorrow’s uncertainty”.
Usually the big New York sales are in early November, even in a US election year. I was negotiating in July with the three main houses for the sale of an excellent Post-War collection and one reason we didn’t go with Christie’s was because they proposed to enter them in their November sale. They then hurriedly organized an eclectic sale including major works by Monet, Cezanne, Picasso, De Kooning and a 67 million-year-old T Rex and they made $340million.
This week there are major sales at Phillips (which made $34m, slightly below mid estimate) and Sotheby’s and Christie’s both have a Modern auction in Paris and a Contemporary Evening sale in London. With Covid increasing and an unsettling US election – although the money markets seems to have already adjusted for a Democrat win – the November auction schedule is empty as I write.
Many art market commentators are highlighting the increasing role of finance deals at the major auctions. Third-party guarantees (or Irrevocable Bids) now often make up more than 30% of the big sales and twists the whole concept of auctions and fair market value. When guarantees began in the late 1980s it was the auction houses who guaranteed a lot, now they actively seek outside guarantors, and many are more investor and collector. The benefit of an IB is that both auction house and seller are guaranteed a sale, and the guarantor either buys the work at the guarantee price (usually 10-15% below the low estimate) or share in the upside (usually 30%).
The nefarious nature of IBs was brought home to me this year when I was offered an IB by an auction house. In this case the proposed guarantor was ‘an interested party’ and could allegedly influence the market, ie. as a player in that artist’s market he would encourage collectors to bid, thereby enriching himself. A downside for me as the consignor was that the auction house, in return for arranging the guarantee, would tear up the advantageous terms I had negotiated, resulting in a potential $180,000 loss to me and gain to the auction house.
In this Covid online art world, galleries are becoming much more transparent, publishing prices more and more online and giving access to the inside world of art dealing with live webinars and online studio visits. There is much more to be done by dealers, and hopefully auction houses will join the trend.