The New York Times had a fairly basic story on the ways in which auction houses give back commissions to their favored clients or the clients they are competing to get consignments from. You’ll remember that this was a key point in Daniel Loeb’s letter to Sotheby’s where he complained that they were giving up too much commission.

In the Times story, there’s an interesting statistic from Christie’s about guarantees.

The level of Christie’s direct guarantees is unknown. But the total value of artwork carrying guarantees has been increasing for the past three years, accounting for 10 percent of Christie’s lots sold in 2012, the company said.

What’s most interesting here is not the total value increasing because guarantees only go to the top works or important collections. What’s interesting is the 10% of lots were guaranteed in 2012. Christie’s sells a lot of lots. Even spread over collections, that’s a surprising number of items that were guaranteed. Perhaps that is what caused David Kusin to provide the Times with this overheated quote:

“The auction houses are not set up to calculate the financial risk,” said David Kusin, who runs Kusin & Company, a consulting firm in Dallas that specializes in the economics of the art market. “Getting into a business they are unsuited for and unprepared for puts all market participants at risk.”

The (Auction) House Doesn’t Always Win (NYTimes)