The £30m in Contemporary art sales that took place at Phillips and Bonhams yesterday may have been a product of Christie's leaving the door open to its third and fourth place competitors. Or it may have been a sign that the Contemporary art market's growth is enabling other auction houses to become a factor.
One thing is clear, though, none of this happens without the firms being willing to invest their own money in providing guarantees and crossing that risk with support from third parties. Both Phillips and Bonhams, to differing degrees, have proved that axiom.
Their success, in turn, proves that we've crossed into a new model of art sales that is neither public nor private but a hybrid of both. The sales process takes place in three stages. Effectively, a consignor with desirable property holds an auction of their work among the four houses. Once their guarantees and terms have been set, the auction house holds a private auction between potential third-party guarantors. Finally, with validation provided by the guarantees, the auction house presents the work to the public to see if anyone is willing to bid higher.
The positive side of this process is that prices are reinforced with verified pledges of interest which should reassure buyers even if it causes a non-comprehending press to spin dark theories of manipulation. The down side, if you're running an auction house is that your business requires access to a much bigger balance sheet.
Just listen to Phillips's CEO, Edward Dolman who told the press after his £24.373m sale,
“The problem is you’re dead if you can’t offer guarantees,” said Dolman.
Bonhams, which has never previously factored in these sales in New York or London guaranteed 7 lots with third-party backing that accounted for three quarters of their sale's total, as Colin Gleadell points out on artnet News:
Average prices at Bonhams contemporary art sales have increased from £8,000 to £100,000 in the last four years, they tell me. Today the low estimate was £4.7 million ($6.1 million) for 39 lots. They took £7.1 million ($9.2 million) in the end, which is probably their best ever for contemporary art.
The guarantees also provide access to buyers as the results show:
The ace in the pack was Mark Bradford’s Dream Deferral (2009), which the seller bought at Christie’s in 2015 for £902,500. It sold to the Mnuchin Gallery for £1,565,000 ($2,000,000).
Another guaranteed lot which attracted competitive bidding was an untitled 1988 work by Rudolf Stingel which saw bidding from dealers Brian Balfour-Oats and Paolo Vedovi before selling for £461,000 ($600,000), double its estimate. The painting last sold at Sotheby’s in 2013 for £242,500.
Mnuchin, Vedovi are not regular buyers at Bonhams but their presence gives the auction house a better shot at winning consignments as long as they can arrange the backing.
At Phillips, successive increases in sales volume and market share have been the focus of the media's coverage of the house. With Christie's absence from this sales cycle, the house has had a lot of fun touting its artificially high market share of 28%. But the results reveal something more consequential taking place. We'll get to that below. First, let's look at some of the coverage.
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