Art Market Monitor

Now that the Macklowe collection is finally on the auction block, we can see that it has already filled one important role. In a market awash in cash waiting to be spent there has been a dearth of high quality supply. The Macklowe collection’s undisputed level of taste has brought a surprising number of other competitive works to all three auction houses. The market has found itself in an interesting moment. After a period of relative indecision where few of the most sought-after works were sold by the owner’s discretion, we now have a flood of really good works available just when, almost coincidentally, buyers are as flush as they ever have been.

The aggregate low estimate of the Evening sales in the next two weeks is approaching $1.5 billion. Almost a third of that is the Macklowe collection. Beyond reviving animal spirits at the top of the market, the sales also offer the opportunity for a renewed focus on some artists whose markets may have lost focus like Jeff Koons, Willem de Kooning, Gerhard Richter and Sigmar Polke.

It’s been more than seven years since the Koons retrospective at the Whitney, Centre Pompidou and Guggenheim Bilbao. As major museum events with a well-established artist often do, the exhibition had been an important fulcrum in the rise of the artist’s market prices. There was the orange balloon dog that set a record $58.4 million for the artist in late 2013 (even if the buyer could barely be considered dealing at arm’s length). That asterisk was erased six years later when Robert Mnuchin raised a paddle for one of his clients on the Rabbit setting a record $91 million price. But since that remarkable moment, no Koons work has sold for more than $10 million.

Facing the issue of Koons’s cooling market head on, Sotheby’s sees an opportunity. The auction house has put the artist’s Baccarat crystal set as the first lot in the auction. The stainless steel example from the Luxury and Degradation series has been conservatively estimated at $900,000. Sotheby’s has already accepted an irrevocable bid even though examples of the ice bucket from the series have sold for 40% of that low estimate. The ice bucket isn’t a component of the Baccarat set but, for comparison’s sake, look at prices for the entire Jim Bean train from the same series. The whole Turner Train sold for $33.7 million in 2014; the engine alone made only $1.7m two years ago. That’s a 20-to-1 differential which would price the Baccarat set at $7.4m which is always possible but probably not going to happen. Nevertheless, Sotheby’s has put the work in the tone-setting run of the first few lots, so they clearly hope it will sell for a lot more than the low estimate.

A better example is the Aqualung, a bronze version of the underwater breathing apparatus that was so meticulously crafted that it looks light enough to wear. In many ways, the Aqualung tracks the Koons market over nearly two decades. In May 2002, one sold for $1.76 million at Phillips. The month before Koons’s retrospective opened in New York another example sold in 2014 for $11.6 million; however, the Macklowe’s example is priced to attract bidders at $8 million. This strategy isn’t without its drawbacks as some collectors have been more than a little miffed to see works by other artists similar to their own priced below what they paid.

Another artist’s market that has seen dwindling sales because of a high price level has been the large abstract “squeegee” paintings made by Gerhard Richter. Half a dozen of these works have sold for more than $30 million with the most valuable one reaching $46 million in 2015.

The Macklowe’s Richter abstract is close in date, size and color palette to a work that sold in 2012 for $21 million which we can use to orient the work in the broader pricing around these paintings. For example, in May of this year, Anne and John Marion’s red Richter abstract made $23 million. It was a six feet tall instead of the Macklowe’s eight feet. It also sold in 2012 for $16.8 million. Applying the same 43% rise in price to the Macklowe comparable would get you around $30 million, a respectable all-in price.

Sotheby’s put a $20 million low estimate on the Macklowe Richter abstract and accepted an IB, presumably near that level. But firm had an interesting experience with Ronald Perelman’s Richter last year in Hong Kong. They were able to put a $15.4 million low estimate on the work; that attracted bidders; and the final selling price with premium ended up being $27.4 million. If the Macklowe’s painting performed as well, the final price paid by the new owner would be more than $35 million which is among those top Richter prices.

The Macklowes’ second Richter is a photo painting from 1966 of a collector with a dog. This work also carries an estimate that should spark bidding. One reason is the sheer lack of comparable works in the auction record. One has to go back to 2006 to find a work of similar size and subject matter in Tante Marianne which made $4.4 million.

Sigmar Polke, Richter’s friend and rival, was also collected in depth by the real estate couple. Three Polkes are included in this first Macklowe sale. One is a silver-nitrate painting from 1979; another is a kitsch-y take on Pop art (more Richard Prince than Roy Lichtenstein) from 1982; and the final, most highly estimated one, is a Rasterbild from 1966 depicting a landscape with palm trees. Not as lush or vivid as the jungle-scene raster painting that twice set a record price for the artist—first making $9.2 million in 2011, then $27.1 million in 2015—the palm trees are already estimated at a level (and carry an irrevocable bid) to land among the top four Polke prices once the premium and overhead fees are paid.

The Macklowes also went for late de Kooning paintings. This sale has a work from the 1970s and a work from the stylistically distinct later period in the 1980s. The 1983 work with bold blues and reds against a generous amount of white space has a $10 million low estimate. Several works from 1983 have been sold in the last decade. In 2016, one made $9.8 million. The year before another made $8.6 million. Both of these feature a section with yellow pigment. In 2014, another slightly smaller work in the same colors as the Macklowes’ sold for $4.5 million.

Moving just six years earlier in de Kooning’s oeuvre has a significant effect on price. The Macklowes’ 1977 painting, suffused with the artist’s signature fleshy pink tone underneath bold reds and black, is estimated at $12 million. The highest price paid for a work from this year and of this size was $21 million in 2016. The year before, someone paid $11.3 million for another that ticked the same boxes. It hasn’t all been steady growth in this market. Phillips sold a third work fitting the same parameters in 2018 for only $8.3 million.

Tomorrow we’ll conclude our deep dive into the Macklowe collection by looking at the lots from artists like Christopher Wool, Mark Grotjahn, Rudolf Stingel and Tauba Auerbach. Then we’ll look at lots by artists whose work trades infrequently like Jackson Pollock, Philip Guston, Agnes Martin, Robert Ryman, Brice Marden, Jasper Johns and Robert Irwin; the Macklowe sale will be closely watched by the private market as it establishes public reference prices for private negotiations.

When last we left the art market—just a few short weeks ago in London—the story was all about the hunt for new talent with collectors making aggressive bets on the “next big thing” artist. Had the top of the art market become dormant, or had it simply retreated into the secrecy of the private market on WhatsApp?

Perhaps we were all left with the wrong impression because the auction houses seem to have been saving their highest value works for November in New York.

At the apex of value this season is the first tranche of the $600m+ Macklowe collection. Sotheby’s has put about two thirds of the value of the collection in this first sale. The high-profile divorce isn’t the only show in town these next two weeks but it is the main event. With that in mind, let’s take a look at what’s on offer and how to think about whether the auction will have any excitement.

The two top lots are A+ works from Alberto Giacometti and Mark Rothko both carrying estimates of $70 million or more. The fate of Sotheby’s guarantee for the whole collection doesn’t rest solely on these works—but they will carry a lot of the load. No wonder Sotheby’s is has accepted an Irrevocable Bid on each work. Indeed, Sotheby’s has already accepted 18 third-party guarantees on the 35 lots in an effort to lock in a significant portion of the sale.

Irrevocable bids aren’t sales, though. And some of the top lots could see action above the IB.  Of the 7 casts of Giacometti’s Le Nez (and one artist’s proof), the foundation has one; four of the works are in museums, including the Osaka City Museum, the Hirshhorn in Washington, the Guggenheim in New York and the Ludwig in Cologne; and there are three, including the Macklowe’s work, held privately. Similarly distinctive works like Chariot and the Pointing Man were acquired, for $100 million and $141 million respectively, by a savvy buyer at a similar point in the economic cycle five and six years ago. That would suggest the IB will see some competition.

The Rothko will be a slightly different situation. At the low estimate, No. 7 will be the third highest price paid for a Rothko at auction once Sotheby’s adds its buyer’s premium and overhead charge to the sale. The quality of the work isn’t in question; but the structure of Rothko’s market might prevent this one from going higher.

It is easier for buyers to bid when a significantly higher price has been established. Otherwise, the work on offer has to be viewed as much more desirable than any previously available works. For example, a year and a half ago (not much time in art-market years) Donald Marron’s Rothko, Number 22 from 1957 was reported to have sold privately for $70 million. To advance beyond that price will require significant new entrants to the Rothko market or the belief that the Macklowe work is an unrepeatable opportunity. Considering that the Rothko is something the Macklowes bought early in their collecting careers, 35 years ago, that may very well be the conclusion a bidder comes to.

In a similar vein, prices for Cy Twombly’s most sought after works have been affected by the turnover of his collectors like Marron. Twombly remains an enigmatic artist to many collectors—even more so at these levels. The more valuable of the Macklowe’s two Twombly works in the sale is the large-scale 2007 untitled painting of peonies that comes from a suite of six works. Eli Broad owned one of the series. It is now in his namesake museum in Los Angeles. Another is owned by the Brandhorsts. Estimated at $40 million, and without third-party backing, this Twombly can be viewed against the 2005 work that sold in 2017 for $46 million.

The other Twombly is a 1961 work carrying an $18 million low estimate and an irrevocable bid. That price looks very aggressive next to the $7.9 million sale in 2005 of a similar-sized 1961 work, though prices are generally twice what they were 15 years ago. But it looks cheap when set against another 1961 work on offer at Christie’s with an unpublished estimate said to be in $30 million range. Market gossip says Christie’s has a backer at that level. Christie’s work is significantly larger and comes from the collection of a storied market maven. Twombly nerds say the Macklowe work is the better one to own.

The Macklowes liked to collect in depth. Despite the near disappearance of Andy Warhol works from the top of the art market, Sotheby’s is selling two of the Macklowes’ Warhols with hefty price tags. Nine Marilyns has an IB against a $40 million low estimate. That number doesn’t seem out of bounds when looking at the far more colorful Four Marilyns sold at Christie’s in 2015. That work was sacrificed at a slight loss from an ill-fated bet placed two-and-a-half years before. Earlier this year, Two Marilyns sold for a solid $15 million price. That picture is a much smaller work compared to the Macklowe’s. But a single, smaller White Marilyn sold for $41 million in 2014.  So much will depend upon the depth of the Warhol market today.

In 2006, the Macklowes had pounced on a market opportunity to buy David Pincus’s example of Warhol’s 16 Jackies at Christie’s. Pincus had a good eye. His Rothko set the record $86 million price for the artist in a 2012 auction. Six years earlier, his Jackies were also a prize. The Macklowes paid $15.7 million for them. Another five years on, Peter Brant tried to capitalized on the interest in Jackies by assembling his own version of the work. He didn’t quite get the score he was looking for but it did make $20.2 million at Sotheby’s. This market history makes the $15 million low estimate and irrevocable bid on the Macklowe 16 Jackies something of a curiosity.

There’s more to look at in the Sotheby’s Macklowe sale. Tomorrow we’ll look at some of the artists like Jeff Koons and Christopher Wool whose markets the Macklowe’s work might help re-ignite. There’s also interesting examples from Willem de Kooning, Sigmar Polke, Gerhard Richter, Philip Guston, Robert Ryman, Agnes Martin and Brice Marden to look at.

Phillips announces tonight that it will offer Francis Bacon’s ‘Pope with Owls’ ($35 – 45 million) from 1958 during its New York Evening Sale of 20th Century & Contemporary Art. The work has been in same private American collection for nearly four decades though it was purchased from legendary Swiss dealer Thomas Ammann.

“In the late 1950s, Bacon spent a great deal of time in Tangiers, an exotic escape from conservative London for artists, writers and adventurers,” Jean-Paul Engelen, Deputy Chairman and Worldwide Co-Head of 20th Century & Contemporary Art, said. “For Bacon, it was a period of great inspiration and creativity. His longest stay in Morocco – fourteen months – was filled with incredible high and lows and it was during this time that the present Pope painting was created. An exceptional example from the artist’s most iconic series, the work elevates Bacon, rightfully placing him among the greatest names in the art historical canon.”

It’s somewhat hard to remember at this great distance but the 2005 sale at Christie’s of Bacon’s Study for Pope 1 from 1961 for $10 million was a landmark in the transformation of Bacon from a Contemporary artist to a creator of masterpieces able to lead the market and propel further sales. Two years after this sale, Henry Kravis paid $35 million for a Bacon pope painting on the private market and his status as market superstar was cemented. Eventually Bacon’s prices would run all the way to $142 million for a triptych of portraits of Lucien Freud that had been painstakingly re-united by a determined art dealer. The previous record price of a Bacon, a triptych (of course,) was paid by Roman Abramovich in 2008. Just last year, Hans Rasmus Astrup, a famed Norwegian collector, sold his triptych for $84.5 million.

The popes are rarer on the market. That’s one reason Kravitz was eager to pay well above the public market price for his in 2007. Two popes were sold publicly as recently as 2019. One made $6.6 million at Sotheby’s but the work was somewhat clouded by the artist’s expressed wish that the painting be destroyed. The other, a small but far less controversial work sold for $50.3 million.

The Thursday before Sotheby’s Saturday-night-in-Las-Vegas sale of 11 Picasso works from the Bellagio’s eponymous restaurant, Brooke Lampley was feeling more than a little “trepidation.” MGM Resorts International, the corporation that had bought Steve Wynn’s Mirage Resorts in 2000—including Wynn’s pet art-cum-luxury-dining-experience restaurant at the Bellagio decorated with a number of significant works by the Modern master—had decided to cash out on the art market gains of the last 20 years. But there was nothing about the sale that required Sotheby’s to transport a substantial portion of their senior staff, including Principal Auctioneer Oliver Barker, CEO Charles Stewart, Lampley, David Schrader who runs private sales and Gregoire Billault, Chairman of Contemporary art plus a host of other client-facing personnel to Las Vegas.

The Sotheby’s road trip wouldn’t necessarily lighten the effort that went into making sure the Picassos sold. The traveling circus would increase it. In addition to navigating the many allures and distractions of Las Vegas, the Sotheby’s team still had to get the bids. But this time they would be doing it without a New York showing and no real expectation that bidders and buyers would come to a viewing in Las Vegas. Yes, Sotheby’s would benefit from the 20-plus years the works had been on view at the restaurant. But how many Bellagio diners really sat beneath the art and thought, some day I’m going to own that Buste d’homme!

In fact, there would be every reason to expect that Sotheby’s hard-nosed owner Patrick Drahi, so notorious for his cost controls, would have preferred to sell the art in New York. Folding the top works into a Sotheby’s Modern Evening sale would have been the most conservative and potentially profitable approach to making money from the MGM consignment.

“We chose to prioritize client engagement over sales,” Lampley reflected on the Monday after the sale. “And it worked.” The sale made $109 million dollars while Lampley and her colleagues found that many of the bidders in the room were stoked.

“Known and highly developed clients bid because of the live experience,” Lampley said.

Sotheby’s was able to create a unique client experience with a weekend of events putting relationship managers in close contact with Sotheby’s clients, especially those from California and Texas who were willing to make a weekend trip to Vegas for something familiar but different. According the Lampley, the bidding in the auction room Sotheby’s recreated at the casino was a mixture of MGM’s whales and many of Sotheby’s less-engaged clients who were enthusiastic participants at the Bellagio sale in a way they might not have been at a New York Evening sale.

It wasn’t just that the works were, as Lampley put it, “meaningfully associated with an alluring site.” (She means Vegas, baby.) “It was a useful case study in how to re-imagine our core business.” (She means auctions.)

Despite the risk involved, Sotheby’s got what it paid for. Or, maybe, the sale paid for what Sotheby’s got. It’s not a secret that Sotheby’s long-term goal is to leverage their brand beyond the art world to become a broader-based luxury retailer of some kind. The Vegas sale, like the Sotheby’s International Realty brand, helps associate Sotheby’s name in the mind of the luxury-aspiring consumer.

Picasso’s fame might actually be bigger than Sotheby’s brand; but even there, the auction house got a boost from this sale. But none of that would have happened if the auction had not come off as a visible success.

Lampley was right to be nervous a few days before the sale. The MGM material wasn’t exactly stand-out Picasso work. The lots were surely valuable but none necessarily strong enough to attract attention so far from a marquee auction event.

The best lot, which was also the top lot in the sale both by estimate and ultimate selling price, Femme au béret rouge-orange, was a small 1938 portrait of Marie-Thérèse Walter that made $40.4 million over a $20 million estimate. Not to denigrate Wynn’s taste or market acumen, but a comparable work from the artist’s estate sold three years earlier in London for $68.5 million. And three years before that, another not dissimilar work from 1938 had made $67.4 million in New York.

Some of the other top works in the sale, two still lives from Picasso’s occupation years in Paris during World War 2 and two late works, were estimated aggressively suggesting Sotheby’s had offered MGM a significant guarantee with little margin for error.

As the sale opened, Barker revealed that Sotheby’s had accepted Irrevocable Bids on three of the 11 lots, that’s more than a quarter of the sale. More often than not, third-party guarantees are a measure the auction house needing to hedge against tepid interest. Here, Sotheby’s used IBs “judiciously,” Lampley said, as “sale inciting instruments.” And it seemed to work. Lots 3, 8, and 9 all got extra bids. Although lot 8, the Buste d’homme had to be sold for a hammer price below the low estimate, the only lot in the sale to struggle like that.

Even with that close call, Sotheby’s was able to exceed the low estimate of $70.5 million by 32% to make a hammer price of $93.1 million. The value of to Sotheby’s messaging of having a “white glove” sale was made clear by the speed with which Lampley produced a pair of white gloves and presented them to Barker so quickly after the final hammer.

So what’s the lesson for Sotheby’s? Will this add a regular sideshow of satellite auctions to the already moveable feast of the global art world? Lampley isn’t suggesting that Sotheby’s is now going to stand up auctions in resort towns around the world. Her colleague David Schrader has led the way in building out pop-up locations for Sotheby’s private sales group. But Lampley points out that pop-ups are about bringing art to where people are. The Picasso sale was aimed at finding a way to cut through the competing noise and bring the people to the art.

Though she cautions the formula isn’t an easy one. It requires the auctioneers be sensitive to the site and material. “This is about creating an optimal client experience,” Lampley said. “Everyone is focused on deepening client relationships because that means deepening engagement.”

Pablo Picasso’s work is a staple of the high-value art market. So it isn’t a wonder that there are a number of works coming to the auction block in the next three weeks with substantial seven-figure estimates. Nonetheless, the market mood both at the Frieze sales and in recent art fairs has been toward spending aggressively in the six-figure range to discover talent rather than to spend lavishly to own perhaps the greatest name in Modern art.

This weekend, Sotheby’s is holding an onsite auction in Las Vegas with property from MGM Resorts the corporate acquirer of Steve Wynn’s Mirage casinos which included the Bellagio and its Picasso restaurant. Some of the works previously on view at the Picasso have come to market. But now we’re going to have a potential test of the appetite for big-ticket PIcasso works.

A few weeks after this sale, Christie’s will offer three paintings estimated above $15 million and Sotheby’s will have a sculpture estimated at $15 million. All together there are 10 lots with an aggregate low estimate of at least $150 million. Those are big ticket items for a big ticket season.

The highest estimate among the MGM paintings is for the small Marie-Thérèse Walter portrait Femme au béret rouge-orange painted in 1938. The $20 million low estimate will seem like quite a bargain when referenced against the stronger-but-only-slightly-larger Marie-Thérèse painting sold by the estate in London three-and-a-half years ago for $68.5 million.

The other $20 million painting is a late work from 1969 that was exhibited in the famous 1970 Avignon show at the Palais des Papes that caused so much consternation. It would be 35 years before collectors began to value these late works on a par with Picasso’s many earlier styles. Buyers of contemporary art interested in Expressionist works began to view the late Picasso works as both in tune with the other artists they collected and remarkably cheap.

That price differential no longer applies when we’re looking at $20 million estimates. The work’s stature at more than six feet tall and the bright colors play into the work’s potential wall power. If there are buyers in the market looking for a lower priced picture, they might focus on the companion painting of a Buste de homme also from 1969 and also shown in the Palais des Papes. It’s $10 million low estimate looks like a bargain next to the $22 million paid during the last public auction in 2015 of a work that could be considered comparable (though is slightly larger) or the $17.8 million paid this past April in Hong Kong for a Buste de Matador from the Avignon show.

There are two more curious works in the sale which seemingly aggressive estimates. Both are still lives from the period when Picasso was living under German occupation in Paris. In June, a not dissimilar work from later in the 1940s sold in London for $4.9 million. The MGM works are larger, which is where the $6 million low estimate for Nature more aux fliers et au compotier comes from.

The smaller but more graphically potent and colorful Nature morte aux panders des fruits et aux fleurs gets a much higher estimate of $10 million. Sotheby’s specialists may be thinking of this Le coq saigné from 1947 which made nearly $7.2 million at Christie’s in London early in 2018.

How these works perform this weekend in Las Vegas may or may not have much effect on the remaining works, like Christie’s Mousquetaire a la pipe II with a $30 million whisper number or the painting Picasso made in response to Matisse that carries a $20 million estimate. But we’ll all be watching for clues.