By Patrick Drahi’s own admission during a press conference this morning announcing Sotheby’s plans for a post-lockdown reopening of the art market, he had not spoken to the press for five years. When the telecom mogul concluded his remarks with the pun that his buying Sotheby’s was like “Altice’s adventures in wonderland,” the world had a better idea why he usually keeps his thoughts to himself.

Although Drahi’s decision to speak was a savvy move, giving the Sotheby’s press event more impact, there was a subtext to the appearance that should not go unnoticed. An April filing notifying bondholders that Sotheby’s would face significant challenges if business remained curtailed by the coronavirus set off a series of wild rumors in the art market about Drahi’s ownership. The filing was made before Sotheby’s management had been able to pivot their sales strategy from live auctions to a series of online events. The surprising success of those events and the prospect of the world emerging from lockdown are only now beginning to be recognized.

At the virtual press event, Drahi's presence helped speed along that recognition. He wasted no time beating back any suggestion that he might have regretted buying Sotheby’s.

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It wasn’t supposed to be this way. Going private was supposed to alleviate Sotheby’s need to deal with public disclosures that could roil the art market. Yet last week Sotheby’s issued an independent auditor’s report of the auction house’s financial statements for 2019 and 2018 that caused a flurry of questions about the firm’s future in the wake of the global pandemic.

Although Sotheby’s is no longer traded on the public stock market, it was acquired with a substantial amount of debt. That debt requires the company to be audited. In this case, Deloitte did the oversight work. As part of that audit, Sotheby’s management was required to assess their business as a going concern. It just so happens that all of this took place during a cessation of the bulk of Sotheby’s business activity which prompted statements like this in a financial disclosure posted on the company’s website last week:

Due the significant uncertainty associated with the material adverse impact the COVID-19 pandemic has had on our operations and liquidity, we are unable to predict or quantify with certainty the effect on our liquidity, our ability to meet our obligations when they become due, or our ability to maintain compliance with our financial covenants under the New Credit Facilities Agreements over the next twelve months.

One can only imagine the astonishment—mixed with excitement and fear—in offices around Manhattan as Sotheby’s competitors read the disclosure. Was Sotheby’s about to default on its bonds? How could have this have happened so quickly?