Auction prices were once thought to be reliable indicators of an artwork’s fair market value—defined by the IRS as “the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.”
That’s now an outdated take, as witness the laughter that greeted Christie’s auctioneer Adrien Meyer at Thursday’s 20th Century Evening Sale as he rattled off the lot numbers of works for which the auction house had secured prearranged private guarantees that were “fully or partially financed by a third party who may be bidding the lot and may receive a financing fee from Christie’s.”
Such arcane machinations result in “unfair market value.” Today’s art auctions no longer provide a level playing field for all participants.
As you can hear (starting at 29:32 in this YouTube video of the livestream of last evening’s sale), Meyer started off slowly and then picked up the pace to race through this disconcerting disclosure:
Christie’s has a direct financial interest in Lot 27 and, in addition, each of Lots 4, 8,10, 12, 16, 17, 19, 20, 21, 25, 29, 30, 31, 32, 35, 36, 39, 42, 45 [attendees start to chortle in disbelief], 50, 56, 58, 59 and 60 [had] a guarantee fully or partially financed by a third party who may be bidding on the lot and may receive a financing fee from Christie’s.
Phew! Deep breath….
“It’s a good sign,” Meyer unconvincingly asserted, perhaps to suggest that however compromised the auction was by the shocking hack attack that had temporarily disabled its website, sales would nevertheless take place. As artnet‘s Katya Kazakina noted: “The house’s executives seemed visibly relieved by the result, which came after a harrowing week.”
Christie’s had managed to seize victory from the jaws of defeat by rescuing a sale that could have been derailed by the late-breaking news (as described by Zachary Small of the NY Times) that the auction house had “experienced what it called a ‘technology security issue’ that took its company website offline, leaving in place an apology and the promise to provide ‘further updates to our clients as appropriate.'” As of this morning (Saturday, May 18), Christie’s website still bears this disclaimer:
We apologize that our full website is currently offline. We are looking to resolve this as soon as possible and regret any inconvenience.
What’s more, three lots (5, 41, 52) were withdrawn before the sale and three of the offered works failed to find buyers. A fourth—a Joseph Cornell box, which had been estimated to bring $700,000-$1 million—was re-offered at the end of the auction and sold at $320,000, after having been bought in at $480,000. (Consignor’s remorse?)
As reported by Kelly Crow in the Wall Street Journal:
The spring sales were replete with one-bid winners—a sign that collectors are balking at the prices being asked for star artists. Works by Wayne Thiebaud, Robert Ryman, Georgia O’Keeffe, Donald Judd and Raoul Dufy also sold last week on lone bids, sometimes because these winners [the guarantors] had pledged ahead of the sales to bid if no one else did.
As CultureGrrl readers know, we’ve been here before. Still, there were some bright spots in Thursday’s sale, notably the floral Warhol. (Nice assonance!)
Photo by Christie’s
In all, Christie’s 20th Century Evening Sale totaled $413.3 million, causing the beleaguered auction house’s officials to heave a sigh of relief. At this writing, we have yet to learn more about exactly what happened, how much information and/or functionality may have been compromised, and what steps are being taken to prevent further breaches.
If nothing else, this was an alarming wake-up call for tighter cybersecurity.
UPDATE: At 8:43 am this morning, this message from Christie’s CEO Guillaume Cerutti hit my inbox:
Following my message of one week ago, I wanted to update you about the technology security incident that Christie’s has experienced. First, I would like to thank you for your patience and regret any inconvenience that this incident may have caused.I am pleased to say that our website and App have now been restored with full functionality.
He then went on to briefly outline the sales that did take place and those that will take place in the near future.
There are still many questions left unanswered. If Iearn more, you’ll learn more.