The frenzy begins in days. From today through Friday next week, Christie’s, Sotheby’s and Phillips are set to auction hundreds of impressionist, modern and contemporary artworks worth — they hope — nearly US$2.8 billion, each one in a matter of a minute or two, sometimes in seconds. Dozens of people labor for months to put together and pull off these twice-a-year bellwether auctions.
“The buzz in the sale room is a high point, but a lot goes on before the auction that leads to the evening,” Sotheby’s Asia chairwoman Patti Wong (黃林詩韻) said.
However, in recent years a troubling element of this meticulous planning has emerged. Frequently, it involves rounding up specific artworks to meet collectors’ particular demands. To attract sellers, the auction houses promise them a guaranteed, undisclosed minimum price; then, to hedge their risk, they line up clients who agree to buy those works at guaranteed, undisclosed floor prices, a practice known as a third-party guarantee. Therefore, the evening’s results are increasingly predetermined.
Illustration: Mountain People
“Auctions are purely staged events, choreographed in advance,” veteran art adviser Todd Levin said.
The auction houses, whose booming sales last year climbed to a new height of more than US$14 billion, freely admit to many theatrical tactics. Within a sale, artworks are not positioned in a sequence that honors art history or chronology, as they used to be, but rather to spark excitement. The perfect “Lot 1” doubles or triples its presale estimate, igniting high spirits in the salesroom that encourage enthusiastic bidding.
Christie’s global president Jussi Pylkkanen, whose photograph was in May used by media publications around the world when he sold Pablo Picasso’s Les femmes d’Alger (Version ‘O’) for a record US$179.4 million, is a showman who uses direct eye contact and expectant, outstretched arms to coax higher bids from dithering bidders. He likens his preparation to that of stage actors.
“They get in the zone, and I’m by myself, getting in the zone, getting loose,” he said.
Meanwhile, although demand for tickets to the evening sales is growing — many registered bidders must stand or are relegated to “overflow” rooms — most actual buyers are not in the salesroom: They bid by telephone or use a proxy bidder — also often on the telephone. At least 80 percent of those well-dressed people who break into applause when a price soars are spectators, the auction houses say.
“It’s not the auction, itself, in terms of my buying something that I go for,” said Martin Margulies, a real-estate developer who has collected for 30 years. “It’s that you see collectors from all over the world, and you get the undercurrent of what’s happening in the art world beyond the auction.”
That is understandable, as even experienced collectors have trouble discerning what is actually happening at an auction — and not just because of the prearranged, minimum-price guarantees. At the auction, guarantors might well be bidding on the very works they have already underwritten, sending the price higher than the prearranged floor. In addition, dealers — usually sight unseen, on the telephone — might be bidding on works by artists they represent to protect their prices.
“It’s a very opaque financial environment,” Levin said.
Here is how it all happens.
Six months elapse between the big sales in New York each May and November, but the drive to secure material for them never ends. Less than 48 hours after an evening sale concludes, Sotheby’s cohead of worldwide impressionist and modern art Simon Shaw and the firm’s cohead of worldwide contemporary art Alexander Rotter sit down with their business teams to analyze the results.
“If an artist was dead at Sotheby’s and Christie’s, you don’t want to put them in the next sale, but if there were five bidders on an Agnes Martin, we say: ‘Let’s go get another,’” Rotter said.
It is their job as specialists to know who owns what, but they also have legions of staff digging through art books, historical files and publications.
When auction employees visit museum exhibitions, they are looking at the labels to see if a picture is in private hands — and, therefore, potentially available.
This summer, Shaw set out to get a Vincent van Gogh. A year ago, six bidders competed for the artist’s Nature Morte, Vase aux Marguerites et Coquelicots, which sold for US$61.76 million. In May, seven people bid on the artist’s L’Allee des Alyscamps, which fetched US$66.3 million. Tomorrow, Sotheby’s is due to offer his landscape Paysage Sous un Ciel Mouvemente, which is estimated to sell for between US$50 million and US$70 million. It was once owned by Belgian collectors Louis and Evelyn Franck, long-time Sotheby’s clients, and was left to their private foundation.
In contemporary art, “Cy Twombly was a main target. His market has risen dramatically in the last few months, especially for his ‘blackboard’ works. We said we had to get a monster blackboard work, and we did,” Rotter said.
In his blackboard works, Twombly used a white crayon to make loopy designs on a gray surface.
After visiting Los Angeles collector Audrey Irmas regularly for years, they convinced her, with an estimate of about US$60 million, that it was time to sell her Untitled (New York City) from 1968.
Sometimes, pictures come to the specialists.
In September, Shaw received a brief e-mail from a client referring to a Rene Magritte gouache he bought at Sotheby’s six years ago: “What’s it worth? Is this the moment?”
Valued at between US$3 million and US$5 million, the work, Le Maitre d’Ecole, is due to go on sale tomorrow.
“That pitch took a maximum of 30 seconds,” Shaw said with a grin.
Others take hours. A team makes up dummy catalogs and plans to show the art in buying hotbeds like London, with proposed exhibition designs. They present marketing plans, sample advertisements, Web videos, media strategies and maps of likely bidders. They estimate what the art will fetch and outline their track record for selling works by the artists in question.
Wong, who has a list of about 100 wealthy Asian clients, was at one of the Van Gogh pitches to the foundation’s trustees, which took place in Paris, London and Geneva.
“I know who is after this picture. I suggested bringing it to Taiwan, rallying new interest in it,” she said.
Trustees agreed, and it was shown in Taiwan last month.
Specialists like Rotter and his counterparts at Christie’s and Phillips are constantly calling clients. They offer free appraisals and advice on framing, exhibition loans and conservation. They arrange tours of museums and art fairs. When asked if they would help get a collector’s child into college to get a great consignment, Rotter and Shaw both laughed and nodded yes.
However, frequently “it’s just money,” Rotter said.
Discounts on the seller’s premium, he said, referring to the commission that auction houses charge consignors, “or guarantees on the price. Are we willing to work for less or pay more for it?”
Negotiated rates for a seller’s fee are not controversial. Minimum-price guarantees are, especially those involving a third party, usually another collector, but sometimes a financier. These complex deals are negotiated individually, but generally the guarantor receives either a fixed fee or, if auction bidders push the price above the undisclosed floor, a cut of that additional amount.
It becomes tricky when guarantors bid on — and win — the artwork at a price above the guarantee. At Sotheby’s, they pay the full winning bid, known as the hammer price, and the commission that auctioneers charge buyers, called the buyer’s premium — just as any other bidder would — and receive no other compensation.
Phillips declined to explain its policies.
At Christie’s, it depends. If the deal stipulates a fee linked to the hammer price, a guarantor who wins a painting they guaranteed pays the hammer price, plus the buyer’s premium, and is not paid anything additional — the same as at Sotheby’s. However, if they agreed to a deal with a fixed fee — no matter happens at the auction — they do receive that.
Critics see that fee as a rebate on the price paid for the artwork. They complain that a guaranteed painting that sells publicly for US$60 million might actually have sold for, say, US$55 million when the guarantor’s fee is subtracted. Christie’s argues that the two transactions — guaranteeing the art and buying — are separate and that the guarantor can apply the fee against any amount they owe Christie’s. For example, they might have purchased a work they did not guarantee.
Many collectors, including Margulies, said guarantees do not trouble them. Prices are, in the end, whatever the market will bear. However, others say that auction arithmetic matters, because it might influence markups. A future buyer might be paying a marked-up price based on the recorded price, not the “real” one, Levin said.
Recorded auction prices also affect the valuation of similar works: Appraisals are based on comparable past sales, but art dealers rarely, if ever, disclose the prices of the works they sell. Yet they sometimes raise their prices based on auction prices.
However, without the assurance of a surefire price, many sellers would never put their great works on the market — including this fall’s star lot, Amedeo Modigliani’s Nu couche, which Christie’s is to offer on Monday next week at an estimated US$100 million.
“Everyone at the auction houses would love to have a real auction,” former Sotheby’s executive Stephane Connery said.
“They would love to estimate a US$10 million picture,” he said, at between US$5 million and US$7 million. “But to get to the seller, who wants US$11 million, they have to be innovative.”
Translation: If they do not offer guarantees, the potential consignor is unlikely to sell his art. In addition, the stakes are growing, as guarantees grow in size and number.
“Third-party guarantees are at levels that would make me blush to ask,” Connery said.
Auction house disclosures show that about 35 percent of the lots in this month’s sales are guaranteed.
For the auction houses, once these consignments are secured — about four weeks before a sale, as the catalog is going to print — their focus shifts to potential buyers. Top collectors and art advisers receive — or have had — advance notice of lots they might like or an early look at the auction catalogs.
“I’m continually on the phone to buyers, every day,” Rotter said. “As soon as I hear of something they want, I’d say: ‘There’s a great Frank Stella coming up. Get ready.’”
As the auction nears, prospective buyers might be wined and dined.
Sometimes it goes much further. In late September, Shaw flew to the US’ west coast to deliver high-quality reproductions of works by Edgar Degas and Henri de Toulouse-Lautrec to a client who wanted to see how they would look in his home.
He is actually taking Modigliani’s Portrait de Paulette Jourdain — estimated at between US$25 million and US$30 million to an Asian client.
“We’ll hang it and light it and let him see it within his collection overnight,” he said.
In Asia, Wong — who can often be seen juggling two or three telephones at a sale — is alerting her clients to works they might like in the catalogs.
“I will have had the text translated into Chinese first, so they will be able to read it. Then the key is keeping them interested, especially in the week leading up to the auction. I give them daily reports. The key is to impart as much information as I am allowed, so they can make informed decisions,” she said.
She is keen to provide price guidance.
“The client may ask, ‘What do you really think?’ I say I think it will go for X. It’s important to have that conversation with the buyer as to why it’s worth more, so they are not caught out on the phone when they have only a few seconds to decide,” she said.
Many collectors are perusing the catalogs on their own, of course.
“I see what’s there that, in one way or another, I want to be involved with — either for myself or if I want to aggressively advise a collector to buy it,” New York art dealer Robert Mnuchin said.
If someone is interested, “we talk about prices, but nine times out of 10, the collector decides the number and frequently not until the moment of the sale itself,” he said.
Other collectors approach an auction with a ceiling on what they are prepared to bid.
Lately, according to auction houses, between 10 percent and 15 percent of the registered bidders at contemporary art sales are new. The search for more is global. At the May evening sales of contemporary art, would-be buyers came from more than 40 nations.
Phillips, much smaller than Christie’s and Sotheby’s, is trying a new tactic this year with a sale of 20th-century art scheduled for Sunday — not a traditional auction night.
It fits the goal of hanging out what Damian Whitmore, Phillips’ new marketing director, calls a “newcomers welcome” sign.
“We’re all chasing the same people, but we have to be the most persuasive,” he said.
At the center of this activity is the auctioneer.
“I follow all of the discussions about what people are interested in. I convene senior specialists regularly to discuss interest and value,” Pylkkanen said.
On the day of an evening sale, he studies an “auction book” prepared by the bids department. It has a picture of each lot, with a full description, the reserve — the undisclosed price, set with the seller, that must be realized for a lot to sell — the guaranteed price (if there is one), absentee bids left for the auctioneer to execute, telephone bidders, other likely bidders and more.
“I’m an annotator,” Pylkkanen said, so he writes down his thoughts on, for example, an object’s quality, which might come in handy when he is on the rostrum.
He also studies the seating charts: As many as 1,000 people can sit at ticketed evening sales at Christie’s; 900, plus 100 standees, at Sotheby’s; and 420, plus 150 standees, at Phillips.
It is not easy. He has to multitask among bids in the book, in the room, in the overflow room, on the telephone and on the Internet — conveyed on a tiny screen on his rostrum.
“I have only 90 to 120 seconds for each lot, but it can be an incredibly meaningful moment in the buyer’s life,” he said.
With each lot, he starts the bidding “on what we call the right foot” to facilitate a sale.
“If the reserve is 10, you start the bidding at eight,” he said.
The next bid would be nine. If there is none, the auctioneer is allowed to announce a “chandelier bid,” a phony but legal bid on behalf of the owner, as a tactic to incite more bidding. The next bid from the audience is 10, the reserve, which is a winning bid — unless there are additional bids. If there was only one bidder, and the auctioneer started at seven, he could announce a chandelier bid at eight, the bidder would say nine, and the action would stop. By law, the auctioneer can use chandelier bids only up to, but not including, the reserve. Since the last bid was below the reserve, the artwork was “passed” or “bought in.” The auction house owns it if the lot was guaranteed; if not, it belongs to the consignor. Then it is on to the next lot.
As at a bad play, people might well leave mid-auction. So it is good to set conservative estimates, Pylkkanen said.
“Then they come in feeling that they may win the object, and when they have that idea in their head, it’s psychological; they go longer. They’re thinking about the celebration they are going to have [if they win],” he said.
However “if the room is quiet, I make sure the pace is up,” Pylkkanen said. “If lots are unsold, I pass them without making anything of it. There’s no shame in it. It might sell very well next time with different people in the room.”
“It’s like being a scuba diver or a skydiver; you’re always a bit nervous,” he said.
When it is all over, “I have a gin and tonic, no ice,” Pylkkanen said — and he lets the adrenaline drain.
The recent passing of Taiwanese actress Barbie Hsu (徐熙媛), known to many as “Big S,” due to influenza-induced pneumonia at just 48 years old is a devastating reminder that the flu is not just a seasonal nuisance — it is a serious and potentially fatal illness. Hsu, a beloved actress and cultural icon who shaped the memories of many growing up in Taiwan, should not have died from a preventable disease. Yet her death is part of a larger trend that Taiwan has ignored for too long — our collective underestimation of the flu and our low uptake of the
For Taipei, last year was a particularly dangerous period, with China stepping up coercive pressures on Taiwan amid signs of US President Joe Biden’s cognitive decline, which eventually led his Democratic Party to force him to abandon his re-election campaign. The political drift in the US bred uncertainty in Taiwan and elsewhere in the Indo-Pacific region about American strategic commitment and resolve. With America deeply involved in the wars in Ukraine and the Middle East, the last thing Washington wanted was a Taiwan Strait contingency, which is why Biden invested in personal diplomacy with China’s dictator Xi Jinping (習近平). The return of
Actress Barbie Hsu (徐熙媛), known affectionately as “Big S,” recently passed away from pneumonia caused by the flu. The Mandarin word for the flu — which translates to “epidemic cold” in English — is misleading. Although the flu tends to spread rapidly and shares similar symptoms with the common cold, its name easily leads people to underestimate its dangers and delay seeking medical treatment. The flu is an acute viral respiratory illness, and there are vaccines to prevent its spread and strengthen immunity. This being the case, the Mandarin word for “influenza” used in Taiwan should be renamed from the misleading
Following a YouTuber’s warning that tens of thousands of Taiwanese have Chinese IDs, the government launched a nationwide probe and announced that it has revoked the Republic of China (Taiwan) citizenship of three Taiwanese who have Chinese IDs. Taiwanese rapper Pa Chiung (八炯) and YouTuber Chen Po-yuan (陳柏源) in December last year released a documentary showing conversations with Chinese “united front” related agency members and warned that there were 100,000 Taiwanese holding Chinese IDs. In the video, a Taiwanese named Lin Jincheng (林金城), who is wanted for fraud in Taiwan and has become the head of the Taiwan Youth Entrepreneurship Park