Over the weekend, the Wall Street Journal ran a story suggesting that auction houses would be offering generous incentives to consignors because of fears of a weak auction market.

The meat of the story was a list of fairly standard sweeteners—waived seller’s premium, photography fees and insurance—that collectors or advisors with attractive property or strong relationships can usually get in all markets, up or down.

The auctioneers who were happy to be quoted are aggressive regional houses that have to be very aggressive to compete with the global firms. For example:

“I use all the tools available to me to get important consignments,” says Peter Loughrey, president of Los Angeles Modern Auctions. “At $1 million, I offer crazy incentives.”

And:

“When you know there is competition with other auction houses, the first place you cave is with commissions,” says Leslie Hindman, owner of Chicago-based Leslie Hindman Auctioneers.

Christie’s, Sotheby’s and Phillips—who spent the boom period of 2011-15 providing extremely generous incentives and guarantees—are far less likely to do that now than before.

It’s a paradox that these firms would be less likely to fight for market share in a down period. Yet as the pie shrinks, there are fewer places to compensate for the incentives with real revenue.

Sotheby’s has begun to apply more discipline across the specialist network if the last sales cycle is any indication. Recent personnel moves at Christie’s during the August hiatus suggest the once-profligate firm may be more disciplined this Autumn. Phillips has a raft of new specialists and business-getters coming aboard whose relationships are more likely to bring in quality consignments than incentives.

We’re entering a new market with new assumptions on both sides of the art selling equation. Don’t expect past behavior to indicate what comes in the future.

Art Auction Houses Want to Deal  (WSJ)