Bidders and Buyers
by Christiane Meixner
Throughout the last twelve months we have repeatedly introduced you to our so-called Shorties: concise texts about collecting that have made the BMW Art Guide by Independent Collectors a lively travel companion. One at a time, we presented them here on the Blog to discuss subjects that make the art world such a manifold, controversial and inspiring place at once.
Today, we have the last one lined up for you, covering an institution that is frequently responsible for art news headlines: the auction house. Also in 2014 we have witnessed some skyrocketing auction sales, such as Francis Bacon’s Three Studies for a Portrait of John Edwards that went for 71 Million Dollars, or Barnett Newman’s Black Fire I that was sold off for 84.1 Million. If you want to know more about the way auction houses dictate prices and to understand why they are considered "kingmakers“ in the art world, read on below.
Auction houses like Sotheby’s and Christie’s are important players in the art world. The sensationally high prices their houses see offered for paintings and sculptures make the most dramatic entrance into the public mind. In 2010, a bronze sculpture by Alberto Giacometti was auctioned for nearly 75 million euros; nearly 100 million euros was paid for a version of Edvard Munch’s The Scream in 2012. These two record sales at Sotheby’s London and New York, respectively, pack a financial punch which contemporary art is simply not yet able to match. Nevertheless, both of these auction houses are considered “kingmakers” in contemporary art. If multiple collectors compete for to the same lot, prices quickly surge. The auction house price can thus signal an immediate increase in value for the entire oeuvre of an artist’s work. It also thereby dictates new gallery prices. Indeed, the power of the auction house has solidified in recent years—but not without its critics. “Art auctions were originally a purely intermediate trade, forming the main shopping source for the art market,” writes Dirk Boll, European director at Christie’s, in his book Art for Sale, which recalls the origins of auction houses. The audience has changed completely. Meanwhile, in many cases, the only bidders who can keep up with private collectors are large galleries, often in order to stabilize prices of their artists. When Damien Hirst decided, in 2008, to auction off 223 of his works at once at Sotheby’s in London, his gallerist Jay Jopling bid on them. Such a market does not tolerate failures. As a consequence, auction houses sometimes guarantee some sellers fixed sums for works in demand. If the high price deters buyers, the works go into temporary storage. These methods may be contentious, but auction houses provide critical information on the valuation of an artist’s work on the market.
Christiane Meixner has been working as a freelance art critic since 1986 for a variety of magazines and newspapers. Since 2008 she has also served as a freelance editor of Der Tagesspiegel’s ”Art & Market“ section.