Francois Pinault’s choice to change horses has unleashed a torrent of the same voices repeating in multiple news outlets the same speculation. The self-appointed experts claim to know Pinault’s mind and point to the top line auctions as unprofitable. That seems to have motivated Christie’s to release some information over the weekend through the Wall Street Journal:

Despite surging sales in the global art market, profits at Christie’s have been shrinking. Last year, the auction house sold a record $5.9 billion of art and collectibles at auction, up from $5.3 billion in 2012.

But profits fell to $122.6 million in 2013 from $153 million in 2012, according to financial statements filed by Arok International SA, a holding company owned by Mr. Pinault. The overall profit margin on art sales declined to 10.7% from 15.2%. In contrast, rival Sotheby’s boosted its profit margin to 15.2% from 14.1% in 2013 while selling $5.1 billion of art.

Those are overall numbers. The relentless speculation is that Christie’s surge forward in Contemporary art has come at the cost of profitability. That would seem to contradict the growing use of direct guarantees which allow the auction house to “buy” profit margin by assuming direct risk (that’s a subject for another post.)  Here, Brett Gorvy pegs the revenue generated from a banner Contemporary evening sale at no more than 8%. But with a sale topping $850m, 8% in revenue would be half of the year’s profits:

Christie’s made auction history in 2013 by selling $692 million of contemporary art in one evening. But the company only made about $10 million in profits from the sale, according to a person familiar with the details.

Mr. Gorvy says the sale earned “considerably more” than $10 million but adds that profit margins on such sales rarely top 8%.

New Boss at Christie’s Hints at Art Shake-Up  (WSJ)