Christie’s wasn’t alone in guaranteeing a big-ticket modern work that underperformed this week and may have cost it money: It’s been widely reported that the only bid for Sotheby’s $101-million Giacometti came from the auction house’s co-chairman for Impressionist/Modern art, David Norman, who offered $90 million (to which the buyers premium was added) on behalf of an anonymous purchaser. The presale estimate of the hammer price for this nearly 5-foot, gold-painted bronze was “in excess of $100 million.” The amount that Sotheby’s had guaranteed to the consignor was, as always, undisclosed.
Photo by Lee Rosenbaum
Unlike Christie’s Léger, the Giacometti did sell to an outside buyer, according to a Sotheby’s spokesperson whom I contacted to double-check on that situation. Watching the sale online, I had seen that the expected increment for online bidders (over the $80 million starting price) was $2 million. Auctioneer Henry Wyndham‘s excruciating effort to extract non-chandelier bids was unavailing. Norman finally stepped in and that was that.
I asked a Sotheby’s spokesperson on Wednesday whether the bidding on “Chariot” had reached the level of the guarantee, and, if not, whether Sotheby’s (required to pay to the consignor the proceeds that would have been received at the guarantee price) had taken a loss on the purchase by “Anonymous.”
I received the expected answer:
As always, our arrangement with our consignors are confidential.
If the level of the guarantee wasn’t reached, Sotheby’s may have achieved the sale’s vaunted $422.1-million total, the highest for any Sotheby’s auction, thanks in part to a big-ticket consignment that represented almost one-fourth of the total and may have been unprofitable.
The subject of whether publicly traded Sotheby’s was assuming undue risk through its increased willingness to offer guarantees was the subject of discussion at the last quarterly conference call with stock analysts, one of whom expressed his “trepidation” about this trend. In July, according Sotheby’s last quarterly report, its board’s executive committee had doubled the cap on permissible net outstanding auction guarantees from $300 million to $600 million. Sotheby’s, like Christie’s (which discloses few financial details because it is privately held) had sharply scaled back on guarantees after getting burned in the 2008 art market crash.
Bill Ruprecht, Sotheby’s chairman, president and CEO, attempted to soothe to the fearful analyst with assurances that he had “never been more rigorous” in analyzing the possible risks of guarantees and that they give Sotheby’s the “flexibility to do business that we believe will be profitable to the institution.”
I’ll be curious to learn what, if anything, is said on this hot-button topic at Monday morning’s quarterly conference call with analysts, coming just before the big Contemporary sales where Christie’s is again expected to dominate.