Halsey Minor Takes a Strike
Before Halsey Minor sued Christie’s he sued Sotheby’s because they were suing him for $17m. According to Minor’s hometown website, Charlottesville’s The Hook, Minor just lost his class action case against Sotheby’s for their supposed conflict of interest in selling Edward Hicks’s “Peaceable Kingdom” to satisfy a debt.
A federal judge in California has dismissed Charlottesville native and Internet entrepreneur Halsey Minor’s class-action lawsuit against auction house Sotheby’s. [ . . . ] Sotheby’s original suit in New York federal court against Minor remains ongoing, and the California judgment leaves the door open for Minor to file his class action suit in New York.
Minor’s suit against Sotheby’s dismissed in California (The Hook)
Souren Melikian vs. the Auction Houses
In the midst of a world-wide economic slump that has seen massive job losses in every sector of the economy from raw materials to media to finance and construction, The International Herald Tribune‘s artistically erudite reporter, Souren Melikian, would like to believe that the trimming of $7 million in expenses at each auction house (where revenues are in the hundreds of millions of dollars) amounts to capitulation for the business:
The financial crisis that managements are endeavoring to forestall by reducing overheads is the inevitable consequence of the metamorphosis undergone by auction houses over the last four decades. The service industry that auctioneering had been for two centuries – and still was in the 1960s – has turned into a purely commercial venture trying to emulate big business. [ . . . ] Unlike the previous generation of auction house leaders to whom art was an object of admiration and personal desire, some of the new managers looked upon it as merchandise.
Set aside for a moment the fact that entire history of material culture is the history of commercial endeavors with many of the most successful artists and artisans having also been astute, aggressive and ambitious men. Ignore, too, the fact that the origins of many great works of art can be traced to vanity and aggrandizement.
Think for a second about what “experts” accomplish when they claim the role of arbiter of value and merit. They usurp a more complex process. Here, Melikian complains about auction catalogues offering too much information. It would seem they allow the uninitiated access they ought not to possess or will be misguided by:
Cataloguing was startlingly different from what it is today. Descriptions ran to two or three lines for objects and a paragraph for significant pictures, never to several pages in doctoral dissertation style. They were aimed at buyers who knew about art or wanted to learn about it by training their eyes. The textual content was matter of fact, rarely effusively laudatory as is common nowadays when catalogues read like marketing brochures.
The spectacular rise in the 1970s and 1980s of interest in art generally and in buying art particularly paradoxically changed all that. Engineered by the auction houses, only too glad to attract more buyers, and by museums in search of a broader public with their blockbuster shows, the rush on art had an unintended consequence.
Financial Squeeze Was Inevitable for Auction Houses (International Herald Tribune)
Barbara Guggenheim Talks Her Book
Art Market Advice from the Daily Beast
Art adviser Barbara Guggenheim takes to The Daily Beast to assure folks that all is well in the land of art:
Some collectors are bottom fishing or making post-sale offers for works that didn’t sell at auction. Some are paying record prices to get the unique gems they want, and some are sitting this season out saving their cash for great things that may soon shake loose. Whatever their strategy, there are smart people who still see the art world as one of endless opportunity. If you haven’t bought art, maybe it’s time to dive in—but be careful.
All of that’s fine and good. Guggenheim is a savvy player. However, she also makes a prediction that strikes us as humpty-dumpty thinking:
The sea change this decade isn’t one of taste, as in the ‘90s when collectors turned away from Impressionism and moved into collecting Contemporary art. This time, it’s the way business will be conducted. No longer will auctions be the center of the universe. If you have significant works to sell, you’ll probably give them to dealers, not auctions. The days of the guarantees from the auction houses are over—at least for now, and if the market remains volatile, you won’t want to risk having your work publicly tainted by not selling at auction.
Why would the pressures upon the auction houses–too much art and not enough buyers–not apply to dealers? Guggenheim is right about the guarantees. In the last round of auctions, Sotheby’s and Christie’s essentially subsidized the purchases of several important lots which were guaranteed for sums much greater than the purchase price. Collectors got to buy good work cheap that the seller sold dear. Everybody won but the auction house that subsidized the difference in the transaction.
Dealers might not give guarantees but they face a similar problem. In the On the secondary market, where the big money lives, a dealer still has to pry the work from an owner with an attractive price. What if another buyer is only interested at a lower price than the seller is willing to part for? Is the dealer going to make up the difference? Market makers–and that’s what dealers are–exploit superior information about transactions to make a profit.
But the sea change in the art world hasn’t been the rise of the auction house as much as the ubiquity of pricing information. Buyers and sellers now know all the numbers. Where’s the dealer’s advantage when demand dries up?
If things get really, really bad out there, dealers will feel the pain of carrying art first. Remember, we’re in a credit crunch. How many dealers these days are able to raise cash against a storage room filled with depreciating art? And will they use that cash to buy more inventory? Probably not.
So the distressed seller is more likely, whatever the shame involved, to use the auction houses where they know they’ll received the entire hammer price instead of searching for a dealer who will have to low-ball them. At least the auction house will only take a commission. And when you’re in debt, maximizing your yield is more important than saving face.
We don’t know that this is how a desperate recession would play out. But we’re sure that Guggenheim’s breezy confidence in dealers benefitting from a sea change doesn’t take all the angles into account.
Where Smart People Are Investing Now (The Daily Beast)
Contemporary Art Day-Sale Results
Sotheby’s hasn’t released the day sale figures yet beyond the total of $35,808,600 for both sessions. You can see the lot by lot results here. This Rauschenberg Traffic Flower Glut went for $362,500. That price was just above the low estimate. The picture was bought at Sotheby’s four and a half years ago. Then, a mere $136,800 took it home. Though it was ballsy price considering the estimate range was a demure $25-35,000.
At Christie’s, the two day sale sessions(here and here) brought in $39,084,500 with almost 62% of the lots sold. The morning session’s top ten was dominated by Wayne Thiebaud and Richard Diebenkorn, with Calder, de Kooning and Robert Indiana muscling in as well. The afternoon saw a Hirst butterfly-wing stainglass window top the list that featured Basquiat, Sherrie Levine, Christopher Wook, Sugimoto and Zhang Xiaogang.