Sotheby’s Sold $318m in Art, So Why’s Everyone So Glum?

Helena Newman was clearly nervous last night as she began the Evening sale of Impressionist and Modern art at Sotheby’s. A seasoned auctioneer and art market professional, Newman’s demeanor in the box is usually more commanding and operatic. The immediate question forming in viewer’s minds was whether Newman had a tell. Eighteen lots later, it appeared that she did. The Evening’s focal point lot, Modigliani’s Nu Couché sold to its guarantor for $157m or a price within 8% of the record set by Liu Yiqian two and half years ago for another Modigliani nude.

Throughout the run-up to the sale and during its immediate aftermath, it has been easy to find any number of opinions on the sale and whether the painting would or should get a bid in advance of the pre-determined one Sotheby’s had arranged.

Because it seems to matter, we can add to that debate a question—heightened in this era of extensive or pervasive Irrevocable Bids and third-party guarantees—about whether the atmospherics of the auction room with its frisson of drama and voyeurism matter to bidders, the majority of whom participate by hearsay clutching a phone and listening to a play-by-play narration from their representative.

As far as the lot of the evening goes, there was clearly some confusion about who would bid and how much. It is worth noting that the scene at Sotheby’s was nearly identical to last week’s scene at Christie’s when auctioneer Jussi Pylkkanen stood at the podium eyeing a specialist during the crying of the top lot from the Rockefeller sale.

Both Pylkkanen and Newman, with so much riding on their respective transactions were tense (though with Pylkkanen’s armor of insouciance it is harder to see when he is perturbed.) Both lost some patience waiting for an expected bid that never materialized finally calling out the specialist’s name in the vain hope a bid would materialize.

Here’s Artsy’s Nate Freeman describing the scene with Newman:

Auctioneer Helena Newman, chairman of Sotheby’s Europe, opened bidding at $125 million, a figure higher than all but a handful of works have ever reached at auction. She began to chandelier bid on the work up to $128, then $130 million, until she got to $135 million, at which point she implored Patti Wong, chairman of Sotheby’s Asia, to bid on behalf of the Asian client on the other end of her phone; Wong shook her head. After Newman offered $138 million, Shaw finally came in, bidding $139 million. Newman lingered, eyeing the phones and the sale room in search of more interest, and then, reluctantly, hammered. Sotheby’s added $18.2 million in buyer’s fees to the final price.

Isolating the works with nine-figure estimates and prominent guarantees, can we make some assumptions about the art market based upon their performance? There was no shortage of commentators eager to put forth their opinions on the matter.

The Wall Street Journal’s Kelly Crow spoke to one:

Afterward, dealers and art lenders said the Modigliani’s risk-offsetting guarantee may have ultimately dampened its appeal to seasoned collectors, who prefer to brag about scoring bargains rather than resetting price highs for artists they admire. “The guarantee level sucked all the oxygen out of the room,” said Evan Beard, national art services executive at U.S. Trust.

There’s a breakdown in logic in Crow’s explanation. If seasoned collectors like to look for bargains, and there’s a great deal of evidence to suggest that the current market is much more vibrant in the lower reaches than at the top here, they avoid massively estimated lots with or without guarantees of any sort. But Beard was hardly alone in this view. The New York Times’s Robin Pogrebin and Scott Reyburn spoke to a reliably sharp-tongued dealer:

“It cleared the mark painfully,” said Christian Ogier, a Paris dealer in Impressionist and modern art. “It’s difficult to get money out of China at the moment,” he added, referring to the absence of bidding on the Modigliani from Ms. Wong. “Everyone knew what was expected. The high guarantees break the dynamics of an auction, somehow.”

Other professionals say the deal structure was besides the point. The Modigliani was priced well giving any other bidder little incentive. They cite the quality of the work, which although larger than the others in the series, lacks some of appeal of the others. Again, the Times talked to an expert in the field who felt the auction was held before the auction:

“What drives some of these huge presale estimates is actually the negotiation that takes place with the prospective third-party guarantor, the sale before the sale,” said David Norman, an art adviser based in New York, who until 2016 was Sotheby’s vice chairman of Sotheby’s Americas and its co-chairman of Impressionist and modern art worldwide. “Basically $100 million is where one has to begin to price a truly great work by any of the major artists.”

Finally, there are some who anchor the deal in the effects of the rivalry between Christie’s and Sotheby’s. Brett Gorvy, perhaps still viewing the world through his former position at Christie’s, told the New York Times the deal was driven by Sotheby’s need to have some parity in the Impressionist and Modern market against the massive Rockefeller sale:

“In order to win the painting, they had to come up with a strong guarantee and a strong deal structure,” said Brett Gorvy, a former Christie’s executive who is now a private dealer, referring to Sotheby’s. “When you look at rest of their sale, it’s very O.K., but nothing exciting.”

“They needed that Modigliani, specifically going up against Rockefeller,” he added.

On Instagram, Gorvy went a bit further in his criticism:

Last night’s sale of Amedeo Modigliani ‘Nude’ at Sotheby’s was a messy disappointment […] – mind you, the final price of $155 million still can’t be shrugged off as chump change. The air is extremely thin up there despite the number of Asian billionaires who have been dominating the Impressionist field.

Gorvy would be in a position to know having previously claimed to have a substantial list of the persons willing and able to spend nine figures on a work of art. Then, Gorvy added a counter-intuitive observation explaining why Sotheby’s was at a disadvantage in gathering material for this sale:

Christie’s win of the massive David Rockefeller Collection inspired many collectors to only sell with Christie’s this season, and this was one of the main reasons for the dull content of Sotheby’s sale last night.

At least one collector, perhaps not one who plays at that level, responded to Gorvy’s comments in private. This collector, who falls into the camp that the Modigliani was under-priced and could have (should have) achieved a price greater than Liu Yiqian’s worries that the awkward sale will affect Sotheby’s reputation for closing a deal with the best possible outcome:

As a consignor, you choose an auction house on the basis of the deal you get and the faith you put in their ability to market your product adequately. It is in this last respect that I think Sotheby’s reputation took a hit yesterday. It has nothing to do with Christie’s snatching Rockefeller.

Finally, Eileen Kinsella spoke to one observer who might have missed the mark:

“Christie’s set the bar for the auction season with its sale of blue chip works from the blue-blooded Rockefellers,” noted art lawyer and commentator Thomas Danziger after the sale. “Fortunately for Sotheby’s, their star Modigliani sold well—though without much energy or evident enthusiasm in the auction room. The true test for both houses will come later this week with the postwar and contemporary sales.”

This season the big show is Impressionist and Modern art. Already we’ve seen $1.007bn in Impressionist and Modern art sold in New York combining the European Imp-Mod portion of the Rockfeller sale and Sotheby’s Evening sale. There’s more than $300m to come tonight at Christie’s.

Although the Modigliani accounted for half of Sotheby’s overall total, it wasn’t the only story last night. One of the aftershocks of the Rockefeller sale has been the assumption that the guarantors of the $115m painting were reluctant buyers. How would that effect the remaining sales especially after the guarantor was said to be in the market for buying more works by Picasso. Would that remove an important and persistent bidder? And what about the other active bidder in the Picasso market seen in London?

Kinsella did her sums on the works in the sale:

Of 11 Picassos on offer, only six, or roughly half, found buyers for a total of $63.6 million. Three of those six, however, figured into the evening’s top 10 lots.

The Art Newspaper‘s Sarah Hanson sought some opinion on what happened to the Picasso market:

Referring to the London spree by Gurr Johns’ Harry Smith, buying on behalf of an unidentified client, Tom Mayou, director of the advisory firm Beaumont Nathan, adds, “You have to wonder, when you have this kind of supply, what happens when you remove one big actor.”

Newman’s hurried crying of the top Picasso lot left a few observers wondering if money was left on telephones, as it were, but the nearly $37m achieved for a 1932 work significantly bested the price achieved by a similar but smaller work from the Bass estate late last year which brought in $11.5m. Sotheby’s specialists stumped for the sale in the press:

“It was a fantastic price for a fantastic picture”, says Brooke Lampley, Shaw’s colleague who heads the department in New York, of Le Repos. “But that person still got a bargain.”

Of the Picasso works where the consignor was unwilling to compromise, the price would have kept up with the appreciation of similar works. Kinsella points out that “Claude Monet‘s Matinée Sur La Seine (1896)—estimated at $18 million to $25 million—sold for $20.6 million. It last appeared at auction in November 2000, also at Sotheby’s, when it sold for $5.7 million on an estimate of $6 million to $8 million.” In other words, the works appreciated by nearly four fold in almost 20 years. The Picasso consignor, on the other hand, perhaps wanting a greater return for a longer holding period seemed to be holding out for a five fold return:

Pablo Picasso’s Femme au Chien (1953), estimated at $12 million to $18 million, was last offered at auction at Sotheby’s more than 30 years ago, when it sold for $2.4 million. This evening, bidding opened at $9 million and stalled at around $11 million.

The Master, Judd Tully, taking his talents to ArtNews, caught up with the happy buyer of one of the Picasso works who might have been happy that the other bidders pulled in their horns:

he artist’s late and lively Femme au chapeau assise buste (1962), which sold to New York dealer Christophe van de Weghe for $5.31 million (est. $4 million–$6 million).

“It’s a gorgeous painting,” said van de Weghe as he exited the salesroom, “and my client was prepared to go much higher.”

Getting back to the rest of the art market, Sarah Hanson looks at some of the other un-guaranteed works, including the aforementioned Monet:

Stripping away the Modigliani outlier, the auction looks far more modest, delivering $161.1m on 32 lots, 15 of which were guaranteed a minimum price by the auction house or a third party and sold on just one or two bids. Two pricey works without financial backing, Matinée sur la Seine (1896) by Monet and Sommernatt (1902) by Edvard Munch, struggled to crack their punchy estimates, making $20.6m and $11.3m against expectations of $18m to $25m and $10m to $15m, respectively.

Supporting the broader trend that buyers are looking for works that can be considered prime examples of artists with lesser reputations. Sotheby’s has benefitted from looking within the category and opening up the category to artists who might have migrated in and out of it previously. Here’s Hanson:

Where Sotheby’s succeeded without qualifier was with artists who even a couple of years ago might have been considered adjacent to the classically European Impressionist and Modern category: contemporaneous works by Americans like Georgia O’Keeffe and Mary Cassatt, and by Latin Americans like Rufino Tamayo and Joaquín Torres-García. O’Keeffe’s Lake George with White Birch (1921) incited a bidding war that came to rest at $11.3m with fees (est $4m-$6m), while Cassatt’s maternal pastel A Goodnight Hug (1880) fetched $4.5m with fees, a record for a work on paper by the artist.

Tully added his usual sharp-eyed and historically informed observations like this Léger that seemed to get lost in the shuffle of the sale:

And Fernand Léger’s precise and chromatic interior from November 1918, Le Darnier jaune, brimming with the energy and renewed color of postwar Paris, sold for $5.87 million (est. $6 million–$8 million). It was backed by a Sotheby’s guarantee. […] [T]he Léger’s last outing was in the Yves Saint Laurent and Pierre Berge single-owner sale at Christie’s Paris in February 2009, where it made €3.7 million.

Here’s where we get back to the question of whether the room and the auctioneer effect the bidding. Early on, Newman almost closed the bidding an Arp sculpture that was selling below the low estimate. Taking a bid as the hammer fell, she astutely re-opened the bidding only to see the work climb to the high side of the estimate range:

Jean Arp’s curvaceous bronze, Ptolemee II, from a 1961 cast, sparked a bidding battle between New York art adviser Andrew Ruth of Ruth Catone and New York and London dealer Chris Eykyn of Eykyn Maclean. Eykyn won at $2.24 million (est. $1.5- million–$2 million).

The disappointments of the evening were the Berkshire Museum works sold among the first few lots. The Picabia, in particular, seemed to suffer from the protests and notoriety surrounding the sale. Or it could simply have been the slowing momentum of the Picabia market as Tully notes:

Quirkily advanced for its time, Francis Picabia’s greenish hued double portrait, Sous les oliviers (Coquetteri), from circa 1924–27, based on a found postcard of an embracing couple and one of the artist’s so-called “monster” paintings, sold for $2.54 million (est. $2 million–$3 million). It came backed with an irrevocable bid and last sold at Sotheby’s London in June 2008 for £937,250.

Tully also broached the broader issue of the sale itself:

Asked why the evening action appeared so restrained, van de Weghe said, “I think there was a lot of mediocre-quality works in the sale and [things were] a little bit too highly estimated.”

The sense of over-ambitious estimates and some less-than-stellar offerings was echoed by London adviser Hugo Nathan of Beaumont Nathan, who opined, “If there’s not great material, people have many other choices and can wait for other times.”

The New York Times also marked the general feeling that the Imp-Mod market is supply driven: