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Come In, Radio. We’re Gonna Need More Guarantees!

November 20, 2019
Ruscha

Ruscha

As always, November is a busy month covering the flurry of sales in New York… last week wrapped up with the major Post-War & Contemporary sales and there were genuine jitters coming off a not-so-stellar showing in the Impressionist & Modern arena. Similar to the sales earlier in the week, there were no mega-lots, which have become commonplace in these evening sales… in the Spring was a $90M Koons and a $110M Monet; but no one was anticipating anything close to that this time around. Even some of the pre-sale press coverage ventured into discussing the collection of Harry and Linda Macklowe, a $700 million collection at the center of divorce proceedings which Sotheby’s and Christie’s will compete over to offer in 2020… I know you need those big numbers to get your clicks, but let’s try to stay focused for a minute.

Hockney

Hockney

Taking top honors at Christie’s Evening sale was the heavily marketed Ed Ruscha titled Hurting the Word Radio #2. The work, coming from the collection of Joan and Jack Quinn, was acquired directly from the artist in 1964 – compositions like these from this period rarely come to the market… one from 1963 sold in 2014 for $30.4M! So given the rarity, along with provenance and excellent condition, it’s no surprise there were several interested parties pushing the price… when the hammer fell, the winning bid was $46M ($52.4M w/p). I’ll also mention the work was guaranteed at $30M (est. $30-40M) so the guarantor made a pretty penny on the deal as well… as a refresher on guarantees – when a work is consigned to an auction, there is a certain inherent risk of the work going unsold… when it is third-party guaranteed (the auction house themselves can also offer a guarantee), an outside individual agrees to purchase the work at a set price, removing the “unsold” risk from the seller… at the same time, it limits the seller’s potential, as any price achieved above the guarantee results in a percentage going to the guarantor. The caveat here is if the work does not hit the guaranteed price at auction, the guarantor is obligated to buy the piece – it is essentially a way for auction houses to ensure the sale of a high-value lot prior to an auction, which may make a consignor significantly more comfortable offering their work. This evening, 24 of the lots were guaranteed – if we make the loose assumption that the guarantees matched the lots’ low estimate, that means Christie’s went in with a total guarantee of $149.2M (I’ll get back to this later, but the whole sale’s hammer total was $279.9M, so they guaranteed more than 50% of the sale value before they even got underway).

Richter

Richter

Well behind the Ruscha was a work by Hockney at $25.75M ($29.5M w/p) – Sur la Terrasse depicts the artist’s lover, Peter Schlesinger, standing on a hotel balcony in Marrakesh… it carried the most ambitious estimate of the evening at $25-45M, though it barely reached that spacious range. I’d have to think last year’s $90.3M auction record for another work by Hockney played a pivotal role in the decision to offer the work – unfortunately with just two interested parties, they didn’t come anywhere close to that figure. Rounding out the top three was Richter’s Vogelfluglinie, which surprisingly underperformed – the work hammered at $17.8M ($20.4M w/p) on an $18-25M estimate or 1% below estimate… it was fresh to the market and carried a third-party guarantee.

Aside from the big prices, there were a few lots that performed well with respect to their estimates… while not huge in value, the sale started off hot with a work by Rashid Johnson – estimated at just $200-300K, the work hammered at $720K or 140% above estimate ($879K w/p). Other notable lots included Adrian Ghenie’s The Lidless Eye which hammered at $1.1M (est. $400-600k/83% above estimate); Warhol’s Muhammad Ali at $8.6M (est. $4-6M/43% above estimate); another Richter at $3.8M (est. $2-3M/27% above estimate); and Ellsworth Kelly’s Red Curve at $8.4M (est. $5-7M/20% above estimate).

There was a significant amount of poor performances and failures as well… not very ‘evening sale’ like but then again auctions can be unpredictable. By the numbers, the poorest performing lot was a work by Diebenkorn estimated at $7-10M… the work hammered at just $4.8M or 31% below estimate, and clearly not guaranteed. Joining the Diebenkorn in subterranean status were works by Wool ($2.6M/26% below estimate); Hirst ($600K/25% below estimate); Dubuffet ($3.2M/20% below estimate); and De Staël ($3.6M/20% below estimate). And for the outright failures… the two most significant unsold lots were by Barnett Newman and Alexander Calder, each carrying a $4-6M estimate. Additionally, works by Alex Katz ($2-3M est.), Parrino ($800k-1.2M), Kara Walker ($400-600k) and Wool ($2.5-3.5M) failed to find a buyer.

When the sale wrapped, they were left with 6 unsold works (11% BI rate) and a grand total of $325.2M w/p… though the total hammer price (without buyer’s premiums) was just $279.9M. The sale was projecting to bring between $267.8-394.3M, so those premiums really bolstered the appearance of this sale… without them, they were just above the low end of the range with more than half of the works hammering below estimate or failing all together… and keep in mind, half of the sale was already sold before they started.

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