“They’re also confusing as hell and throw smoke in the eye of the art market” – reports artnet News
Art auctions look pretty simple, on the surface. A buyer consigns a painting, the people who want the painting bid against each other, and the highest bidder wins. That’s certainly the impression given by the auction itself, whether you attend in person or just watch online.
But it’s not the reality. At the top end of the market, art auctions are increasingly complex and opaque. Consider the three paintings Steve Wynn had up for auction at this month’s sales, carrying a combined estimate of some $135 million. One of those paintings was withdrawn after being damaged by mistake; one of them was hammered down at $33.5 million, which works out to $38 million after fees, but sold for only $37 million; and one of them was withdrawn on the grounds that it was covered by the same third-party guarantee that also included the damaged work.
If you don’t entirely understand what’s going on in the previous paragraph, then you’re exactly where Christie’s and the art world more generally want you to be. The art market is built on opacity, and the less that people know about what’s going on, the more opportunities there are for profit and arbitrage. When you take a closer look at this season’s big auction sales, one trend seems to be emerging: Auctions are looking less and less like anonymized price-discovery mechanisms and more and more like gussied-up private sales.
Often, the consignor ends up selling to an art dealer or speculator, after losing their bet that they’d be able to smoke out a competing art buyer who for whatever reason wasn’t willing or able to bid at the auction.
A good amount of this auction activity can be deciphered, and some of it is relatively easy to understand. If Christie’s damages a painting, then it makes sense that they would withdraw it from auction. But what happened to Wynn’s other two paintings? One of them, Double Elvis [Ferus Type] (1963) by Andy Warhol, received a series of bids. After an underbidder put in a bid of $33 million, the work was finally hammered down to the high bidder for $33.5 million.
Read the full reportage by Felix Salmon at artnet News