According to Katya Kazakina’s recent Bloomberg article, it appears that the auction houses are taking the idea of “sacrificing to gain” to a new level. The behind-the-scenes deals at some auction houses are nothing less than shocking. These top auction players have been giving away large percentages, if not ALL, of their commissions to sellers in order to snag the high valued works from their competitors. In addition, they are ‘working’ with potential buyers to make the purchase as painless as possible … making it easier for some, and not for others seems a bit unfair to me! For example, Sotheby’s snagged the A. Alfred Taubman collection from their rival with a last minute guarantee to the family: $515 million before the saleroom would take any commissions. Some of these works were offered in their November 11th sale which also included Cy Twombly’s “Untitled” (owned by Audrey Irmas). In order to get that piece the auction house agreed to waive any seller’s commissions and give her a majority of the buyer’s premium! To make matters even worse for Sotheby’s, before the sale there were no known potential buyers for the work; so a last minute deal was struck with hedge fund manager Daniel Sundheim – if he bought the painting he could pay for most of it by pledging to consign 7 works from his collection with a combined value of $50 – $75 million (which the saleroom guaranteed). WOW! Talk about rigging a sale! 4 of these works, which include paintings by Warhol and Basquiat, will be offered in their upcoming May sale. Seems like a real house-of-cards … and we all know what happens to those. The auction houses have seen steady declines in their profits … I wonder why?
It is time for the auction market to get back to the way it is supposed to be. Works come up for sale, people bid on them, and the person who wants to part with the most ‘cash’ wins. These backroom deals do not make for a level playing field.
