Contemporary Art Auctions, Part III

The rich are different. They pay millions for condos at 15 CPW and the Plaza, then spend additional millions on weird art to hang on their expensive new walls.

Watching them spend their money is a fun spectator sport. Aside from entertainment value, though, I'm not sure their activity has much bearing on how the rest of us live - unless we happen to sell high-end condos or weird art.

Funny -- Generally most posters are obsessed with what the Wall Street world will do in light of real estate. This data is relevant to the market as the sale of luxury goods is an indicator of purchase power which relates directly to real estate. Also, I have been quite impressed by the smarts of many posters who discuss the economic ramifications of real estate options and have an excellent understanding of the math involved. Contemporary art may seem "weird" and foreign to someone who has never studied it, but I encourage anyone unfamiliar with the genre to take advantage of the incredible contemporary art collections in NYC at the Guggenheim, MOMA and other smaller museums and galleries. We are so lucky to live in a City with some of the greatest art in the world.

srb162: I'm a MOMA member, and take my children there frequently. I LIKE weird art. But in the context of the last 800 years of Western history, it's still weird.

My real point was about the buyers, not the art. They're in a different market segment from most of us - for real estate as well as decoration. The markets are connected, but I think the connection is fairly loose.

If things were so good in the art world, BID would not be near its 52-week low. There is no shortage of hype to make things look rosy.

mbz:

Two different things. What people are buying, if they're buying, and how much they're spending is ONE issue. How well Sotheby's manages its company, and public policy decisions relating to its stock prices are ANOTHER issue.

Okay, report number two.

Last night's sale at Sotheby's was absolutely INSANE!!! Although the sale had top-quality art and dealers predicted it would be a success, it went well beyond even the auction house’s expectations, bringing in $362 million, above the sale’s high $356 million estimate. This is a record haul for Sotheby's evening Contemporary Art sale. 18 artist records were set.

A 1976 triptych by Francis Bacon brought $86.3 million, becoming the most expensive work of contemporary art ever sold at auction and a retort to doomsayers who had predicted that the art market would falter seriously this season because of broad economic anxieties. "My Lonesome Cowboy," a sculpture by Takashi Murakami that was created in 1998 and sold for $18,000 at that time, sold last night (10 years later) for $15,161,000. This is an ROR for the entire 10 year period of 84,127%, or an annualized ROR over the entire 10 year period of 96%.

So two evening sales, and $710,000,000 sold. Last year at this time, the two night total was $630,000,000, a 13% increase in one year. I haven't totaled the day sales yet. Tonight is Phillips - we'll see how they do.

BID's value is a reflection of the art market. Period. One big sales does not make a market.

Anyone know what Sotherby's commission is on the $362 million sold? I would be interested to know. 5% maybe?

I have paintings going up for sale today so hope your right....A similear picture to mine sold 5X estimate...so im holding my breath

mbz:

Period.?!?!?

You are so very, very wrong.

First of all, Sotheby's sells art in over 70 catagories, and in over 20 countries. So looking at Sotheby's stock price, and then picking 1 of 70 areas in 1 of 20 countries and stating that the two are directly correlated is wrong. Different segments of the market, and different areas of the art market behave very differently from one another. The best you could say about Sotheby's stock price is that it's some sort of averaged 'fund of fund' situation.

Secondly, Sotheby's (and Christie's) have to regularly compete with each other for the best lots. They do this by offering advance guarantees to the sellers. If they miscalculate those guarantess, even a little bit, they can wind up with a fabulous sale that brings in record prices for the art they've sold, but is still a money losing proposition for them as a company and knocks their bottom line.

And when you say "art market," what "art market" are you talking about? The Impressionist art market? The Chinese Porcelain art market? The Antiquities market? The Baseball memorabilia market? The French and Continental Furniture market? The Books and Manuscripts market? The Jewelry market? Sotheby's handles all these markets, and many, many more. I'm only talking about the Contemporary Art market, and have two days of sales with over $900,000,000, 900 artworks (including days sales thus far), 20 new record prices for artists, and an $86,000,000 painting sold last night to back up my propsition - and we still have two days left this week for sales.

Period.

Good old malraux. The only person besides Terry McAuliffe who can whip his own self into a frenzy.

jsey9:

Sothebys take is as follows - 25% on the first $20,000, 20% on anything between $20,001 and $500,000, and 12% on everthing north of $500,000. In addition, on lower cost lots, they also geat a consignor fee of between 2%-6%.

mcfm85a:

ooooo - can say which lot it is, since you're anonymous here anyway? Good Luck!!!!!!

Good old Jerkstore. The only person besides George Bush who talks about things he doesn't know anything about.

Thanks Malraux. That's unbelievable. Based on those numbers they earn $161,000 on a $1M painting.

Malraux: Aren't commissions on the big-ticket lots highly negotiable?

West81st:

Commissions are most definitely not negotiable by the purchasing party. You buy it, you pay the commission, end of story, whether the purchase price at the hammer is $8,000 or $80,000,000.

For the seller, consignment fees are definitely negotiable, easily down to 0% for big ticket and/or highly desirable artworks.

Malraux: Sorry I worded the question poorly. I understand that the buyer has to pay the calculated commission according to the formula. But I thought that on the seriously high-end pieces, the houses actually pass a lot of that money through to the sellers (as a negotiated part of the consignment agreement), so their net commissions come out significantly below the nominal "commissions" collected from buyers.

I haven't followed the industry for a decade, and there has been a big price-fixing scandal in the interim, so my information may be stale.

newbie question, because i know very little about art: me and the better half were strolling around in soho the other day and stumbled into a gallery. i encouraged her to look around because i figured any time killed here meant less potential $$$ spent at all the stupid shops - implicit in that theory was that we had a 0% probability of spending money on art.

that's the set-up. we walk in and end up getting somewhat interested in a small lithograph print by Dali. now, comments about Dali and "how college-dorm-room of you" aside, i wanted to ask about investment potential of something like this. explicitly: how much potential is there in a $15K Dali lithograph given that lithographs are not "unique"?

i'd appreciate any insight on this (a) in general, or (b) Dali-specific. please do not hesitate to talk to me like a child that knows nothing about art, because, well, yeah.

jerkstore -- it's officieal: malraux won that little tiff. you bring up GWB, you're pretty much a done deal. call my mother a whore, but don't ever compare me to W.

West81:

The practice you are describing of kicking back some of the auction house's buyer's premium to a consignor of a particularly desirable work does happen, but pretty rarely, mostly because guarantees are so high nowadays. But in rare exceptions, the house will indeed share its buyers premium with a consignor in order to close the deal and get a spectacular item. But it's pretty unusual.

paul10003:

It's a REALLY, REALLY good thing you asked. Dali prints are NOTORIOUSLY difficult to purchase correctly, because 1.) at a certain point in his life, he actually signed blank lithographic sheets of paper and the images were printed posthumously, and 2.) there are many, many fakes out there. I would STAY AWAY from ANY Dali prints. They're not worth it, unless you're buying sheerly for decorative purposes, and I am sure that $15,000 to you does not qualify in that arena. And even for decorative purposes, most of them are just plain lousy as art. Dali was a great artist, but unless you're buyinhg the truly great work from the 1920's-40's (of which the great works are very expesive), I wouldn't get involved. It's a scam.

Lithographic prints, on their own, can be a really great way to collect works by major artists at a reasonable price point, and indeed can increase in value. Warhol, Johns, Rauschenberg, and many other terrific artists all did significant work in the print arena. But you need more information and knowledge before you throw down your hard earned money.

I concede nothing. While I despise Bush, it is mathematically impossible that he's the only person besides me who "talks about things he doesn't know anything about." Malraux himself proves this. As does Mitt Romney.

thank you malraux. that's very informative.

Okay, final report number three.

Phillips sale last night was one of their strongest ever, both in terms of quality as well as in $'s. The total of $59MM was right in the middle of the pre-sale estimate, with 86% of works sold, and interestingly enough, roughly about two-thirds of the buyers were from the US.

So, for the evening sales this week, we've seen $770MM sell, with about a 90% success rate. Dividing this amount by the 180 items that sold in the three evening sales, we get (a new record!) $4.25MM per average lot sold, which is quite remarkable.

When we add Christie's and Sotheby's day sale totals to the evening sale totals, we get a grand total of $980,000,000 for the three days of auctions. Last time around, we had a record total (at the time) of $850MM. So we're looking at a 15% increase over the record totals just six months ago. It's gotta stop at some point, but for now, the art market just keeps chugging along.

I guess mbz's assertion that Sotheby's stock price is a good correlative indicator of the Post War/Contempoary Art market just got blown completely to hell. Period.

paul10003:

DO NOT buy a Dali print. There are many tricky issues here. 1) Forgery 2) Prints made after Dali's death and without his direct oversight 3) a glutted market. Any Dali print that is marked at 15K sounds like a very bad purchase to me. I'm a curator/ art historian / buyer and I would never touch a Dali print in a million years.

kas242:

Your advice was congruent with mine above. What art market are you involved in? Contemporary? Would like to know who/what you're looking at/buying...

ok, thanks everyone for the help. so i shouldn't care that the seller has a certificate of authentication or anything like that?

Certficates of authentication in the artworld mean little (or nothing). They're the same as when you buy a piece of Rock n' Roll memorabilia or Sports memorabilia and the seller gives you a certificate - in most cases, they're not worth the paper they're printed on. Also, they have no recognized legal standing in any court of law.

paul10003:

http://www.phillipsdepury.com/auctions/lot-detail.aspx?sn=NY030108&lotnum=156&search=&p=13&order=

This set of Dali lithographs just sold yesterday (21 May) for a total of about $21,000. This set is from 1971, completely authentic, and from an edition of 250. Please note that the price quoted is for ALL TWELVE lithographs in the set! So you can see why someome potentially offering you a much more current single lithograph for $15,000 (with a certificate of authenticity) might not be a relaiable source.

malraux, thanks again for the info. the set of lithographs you linked doesn't include the one we were interested in, but that's really besides the point, and i completely understand now what you're saying. it seems to me the safest thing for me to do is stay away from Dali lithos. but i *would* like something nice to hang up on my wall that could also serve the dual role of being a good investment. if you ever have any suggestions (artists, links, etc.) for things under the $20K mark, please do let me know.

I would suggest a great website called Modern Art Obsession. It's lots of fun, and run by a guy who mainly collects photographs - but he does collect other media as well. The website is gossipy and bitchy at times (and hilarious), but is a nice source of general info on contemporary under 20K art. I would humbly also suggest the following Chelsea galleries (by no means a complete list) that would be nice places for a begining collector to find out more -

21st Street (between 10th and 11th) Casey Kaplan
22nd Street (between 10th and 11th) Andrew Kreps
23rd Street (between 10th and 11th) Perry Rubenstein
24th Street (between 10th and 11th) Marianne Boesky
26h Street (between 10th and 11th) Greene Naftali

In the L.E.S. you can try these galleries -

Feature (on Bowery)
Rivington Arms (on 2nd Street)
Lehmann Maupin (on Cristie)
Museum 52 (on Rivington)

If you ever have any question, feel free to ask!