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Colin Gleadell’s smart story in the Telegraph today raises an interesting point about guarantees worth discussing at some length.

According to Gleadell’s math, Christie’s has half of the $370m in Evening sale lots guaranteed for a total of $207m. He cites this as 57% of the sale’s value, presumably including the day sale lots at their low estimate value. He contrasts that with Sotheby’s $115m in guarantees on $212m in low estimate value.

All of this is a good and valid point. We have seen over the last several years the evolution of guarantee strategies from an inducement to sell to a tool for bolstering market share. Now there seems to be yet another turn in the strategy. Guaranteed property offset with third party guarantees or irrevocable bids are now a form of private sales held in public. In other words, the auction house has performed its sales function by tapping its client base to make a sale with the option for other potential bidders to make a last minute decision to participate.

Considering the social nature of art values, where buyers often feel comfortable paying more in a competitive situation than less without the confirmation of other interest, there’s a compelling logic to this new form of selling.

Setting that aside, the interesting thing about this season is that half of the guarantee value is assigned to works from what was once a single collection. Based on industry speculation, the Siegel lots have somewhere close to $200m in guarantees from the auction houses, the bulk of which is backed up by third party guarantees of various types. Although there seems to be no compelling external event provoking these sales, a global guarantee for a single-owner collection (even with the surprising innovation of it being split across two houses) is more of an old-school art financial play than an innovation.

Taken together, Sotheby’s and Christie’s have guaranteed 56% of their sale (using Gleadell’s formula) but removing the Siegel material only lowers the proportion to 50%. To test this idea that sales with irrevocable bids or third party guarantees are a new merging of public and private sales, we’ll have to wait until we get mid-season numbers from both auction houses this Summer to see whether the private sales divisions are impacted.