Art auction

Sotheby's New York City headquarters on York Avenue
Christie's New York City headquarters in Rockefeller Center

An art auction or fine art auction is the sale of art works, in most cases in an auction house.

In England this dates from the latter part of the 17th century, when in most cases the names of the auctioneers were suppressed. In June 1693, John Evelyn mentions a "great auction of pictures (Lord Melfort's) in the Banqueting House, Whitehall",[1][2] and the practice is frequently referred to by other contemporary and later writers.[1]

Normally, an auction catalog, that lists the art works to be sold, is written and made available well before the auction date.

Some of the best known auction houses are Christie's and Sotheby's. The oldest auction house is Stockholm Auction House (Stockholms Auktionsverk). It was established in Sweden in 1674.

History

Early days

Before the introduction of regular auctions the practice was, as in the case of the famous collection formed by Charles I., to price each object and invite purchasers, just as in other departments of commerce. But this was a slow process, especially in the case of pictures, and lacked the incentive of excitement. The first really important art collection to come under the hammer was that of Edward, Earl of Oxford, dispersed by Cock, under the Piazza, Covent Garden, on 8 March 1742 and the five following days, six more days being required by the coins. Nearly all the leading men of the day, including Horace Walpole, attended or were represented at this sale, and the prices varied from five shillings for an anonymous bishop's "head" to 165 guineas (gns.) for van Dyck's group of "Sir Kenelm Digby, lady, and son".[1]

Auction Room, Christie's, circa 1808.

The next great dispersal was Dr Richard Mead's extensive collection, of which the pictures, coins and engraved gems, &c., were sold by Abraham Langford in February and March 1754, the sale realizing the total, unprecedented up to that time, of The thirty-eight days' sale (1786) of the Duchess of Portland's collection is very noteworthy, from the fact that it included the celebrated Portland vase, now in the British Museum. Many other interesting and important 18th centurysales might be mentioned. High prices did not become general until the Calonne, John Trumbull (both 1795) and Bryan (1798) sales.[1]

As to the quality of the pictures which had been sold by auction up to the latter part of the 18th century, it may be assumed that this was not high. The importation of pictures and other objects of art had assumed extensive proportions by the end of the 18th century, but the genuine examples of the Old Masters probably fell far short of 1%. England was felt to be the only safe asylum for valuable articles, but the home which was intended to be temporary often became permanent. Had it not been for the political convulsions on the continent, England, instead of being one of the richest countries in the world in art treasures, would have been one of the poorest. This fortuitous circumstance had, moreover, another effect, in that it greatly raised the critical knowledge of pictures. Genuine works realized high prices, as, for example, at Sir William Hamilton's sale (1801), when Beckford paid 1,300 gns. for the little picture of "A Laughing Boy" by Leonardo da Vinci;[1][3] and when at the Lafontaine sales (1807 and 1811) two Rembrandts each realized 5,000 gns., "The Woman taken in Adultery", now in the National Gallery, and "The Master Shipbuilder", now at Buckingham Palace. The Beckford sale of 1823 (41 days, ) was the forerunner of the great art dispersal of the 19th century; Horace Walpole's accumulation at Strawberry Hill, 1842 (24 days, ), and the Stowe collection, 1848 (41 days, ), were also celebrated. They comprised every phase of art work, and in all the quality was of a very high order. They acted as a most healthy stimulus to art collecting, a stimulus which was further nourished by the sales of the superb collection of Ralph Bernal in 1855 (32 days, ), and of the almost equally fine but not so comprehensive collection of Samuel Rogers, 1856 (18 days, ).[1]

Three years later came the dispersal of the 1,500 pictures which formed Lord Northwick's gallery at Cheltenham (pictures and works of art, 18 days, ).[1]

Mid-19th century

Towards the latter part of the first half of the 19th century an entirely new type of collectors gradually came into existence; they were for the most part men who had made, or were making, large fortunes in the various industries of the midlands and north of England and other centres. They were not hampered by "collecting" traditions, and their patronage was almost exclusively extended to the artists of the day. The dispersal of these collections began in 1863 with the Bicknell Gallery, and continued at irregular intervals for many years, e.g. Joseph Gillott (1872), Sam Mendel (1875), Wynne Ellis and Albert Levy (1876), Albert Grant (1877) and Munro of Novar (1878).[4]

These patrons purchased at munificent prices either direct from the easel or from the exhibitions not only pictures in oils but also water-colour drawings. As a matter of investment their purchases frequently realized far more than the original outlay; sometimes, however, the reverse happened, as, for instance, in the case of Landseer's "Otter Hunt", for which Baron Grant is said to have paid and which realized shortly afterwards only 5,650 gns.[4]

One of the features of the sales of the 1870s was the high appreciation of water-colour drawings. At the Gillott sale (1872) 160 examples realized Turner's "Bamburgh Castle" fetching 3150 gns.; at the Quilter sale (1875) David Cox's "The Hayfield", for which a dealer paid him 50 gns. in 1850, brought 259 gns.[4][5] The following are the most remarkable prices of later years. In 1895 Cox's "Welsh Funeral" (which cost about ) sold for 2,400 gns., and Burne-Jones's "Hesperides" for 2460 gns. In 1908, 14 Turner drawings fetched (Acland-Hood sale)[4][6] and 7 brought (Holland sale), the "Heidelberg" reaching 4,200 gns.[4][7] For Frederick Walker's "Harbour of Refuge" 2,580 gns. were paid (Tatham sale) and 2,700 gns. for his "Marlow Ferry" (Holland).[4]

The demand for pictures by modern artists, whose works sold at almost fabulous prices in the 1870s, had somewhat declined by the early 20th century; but during all its furore there was still a small band of collectors to whom the works of the Old Masters more especially appealed. The dispersal of such collections as the Bredel (1875), Watts Russell (1875), Foster of Clewer Manor (1876), the Hamilton Palace (17 days, )—one of the greatest art sales in the annals of Great Britain—Bale (1881),[4][8] Leigh Court (1884), and Dudley (1892) resulted,[4][9] as did the sale of many minor collections each season, in many very fine works of the Old Masters finding eager purchasers at high prices. A striking example of the high prices given was the realized by the pair of Vandyck portraits of a Genoese senator and his wife in the Peel sale, 1900.[4]

Late 19th to early 20th centuries

In the last quarter of the 19th century and the first decade of the 20th, the chief feature in art sales was the demand for works, particularly female portraits, by Reynolds, his contemporaries and successors. This may be traced to the South Kensington Exhibitions of 1867 and 1868 and the annual winter exhibitions at Burlington House, which revealed an unsuspected wealth and charm in the works of many English artists who had almost fallen into oblivion.[4]

A few of the most remarkable prices for such pictures may be quoted:[4]

Between 1880 and the end of first decade of the 20th century the "appreciation" of the then modern continental schools, particularly the French, was considerbal; of high prices paid may be mentioned:[10]

High prices were also fetched by pictures of Daubigny, Marià Fortuny, Louis Gallait, Gérôme, Constant Troyon and Jozef Israëls. The most marked feature of the Edwardian art market was the demand for the 18th century painters Watteau, Boucher, Fragonard, Pater and Lancret; thus La Ronde Champêtre of the last named brought at the Say Sale in 1908, and Natoire's Le Reveil de Vénus at the Sedelmeyer sale, 1907.[10]

"Specialism" is the one important development in art collecting which has manifested itself between the middle of the 19th century and the Edwardian period. This explained the high average quality of the Wellesley (1866), the Buccleuch (1888) and the Holford (1893) collections of drawings by the Old Masters; for the Sibson Wedgwood (1877), the Duc de Forli Dresden Porcelain (1877), the Shuldham blue and white porcelain (1880), the Benson collection of antique coins (1909), and for the objects of art at the Massey-Mainwaring sale of 1904,[10][11] and the Lewis-Hill sale of 1907. Very many other illustrations in nearly every department of art collecting might be quoted—the superb series of Marlborough gems (1875 and 1899) might be included in this category but for the fact that it was formed chiefly in the 18th century. The appreciation—commercially at all events—of mezzotint portraits and of portraits printed in colours, after masters of the early English school, was one of the most remarkable features in art sales during the last years of the 19th century. The shillings of fifty years before were then represented by pounds. The Fraser collection (December 4 to 6, 1900) realized about ten times the original outlay, the mezzotint of the "Sisters Frankland", after Hoppner, by W. Ward, selling for 290 gns. as against 10 gns. paid for it about thirty years previously.[10]

The H. A. Blyth sale (March 11 to 13, 1901, 346 lots, : 10s.) of mezzotint portraits was even more remarkable, and as a collection it was the choicest sold in the first decare of the 20th century, the engravings being mostly in the first state. The record prices were numerous, and, in many cases, far surpassed the prices which Sir Joshua Reynolds received for the original pictures; e.g. the exceptionally fine example of the first state of the "Duchess of Rutland", after Reynolds, by V. Green, realized 1,000 gns., whereas the artist received only for the painting itself. Even this unprecedented price for a mezzotint portrait was exceeded on the 30 April 1901, when an example of the first published state of "Mrs Carnac", after Reynolds, by J. R. Smith, sold for 1,160 gns. At the Louis Huth sale (1905) 83 lots brought nearly Reynolds's "Lady Bampfylde" by T. Watson, first state before letters, unpublished, fetching 1,200 gns. Such prices as these and many others which might be quoted are exceptional, but they were paid for objects of exceptional rarity or quality.[10]

The Holland sale, in June 1908, realized (432 lots), a "record" sum for a collection of pictures mainly by modern artists; and that for the Rodolphe Kann collection (Paris) of pictures and objects of art, including 11 magnificent Rembrandts, Messrs Duveen paid in 1907. In every direction there has been a tendency to increase prices for really great artistic pieces, even to a sensational extent. The competition has become acute, largely owing to American and German acquisitiveness. By 1911 the demand for the finest works of art of all descriptions was much greater than the supply. By the early 20th century the turnover of one London firm alone had occasionally exceeded annually, which give an indication of the size of the art market at that time.[10]

Late 20th century

In November 1970, Diego Velázquez’s Portrait of Juan de Pareja sold for $5.5 million. The sale tripled the previous world record of a decade earlier. In May 1990, Vincent van Gogh’s Portrait of Doctor Gachet sold for $82.5 million.[12]

21st century

In November 2013, $142.4 million was paid for the 1969 triptych, Three Studies of Lucian Freud, by Francis Bacon.[13]

The highest price ever paid for an artwork at auction was Pablo Picasso's Les Femmes d'Alger (Version O) (Women of Algiers) that was sold by Christie's in May 2015 for $179.4 million.[14]

Contemporary market structure

The late 1980s were a boom period for art auction houses. However, in early 1990, the market collapsed. The USA overtook the EU as the world's largest art market[15] with a global share of 47 per cent by 2001.[16] Ranking second, the UK's world market share hovers around 25 per cent. In continental Europe, France was the market leader while in Asia, Hong Kong continues its dominance. France’s share of the art market has been progressively eroded since the 1950s, when it was the dominant location and sales at Drouot surpassed those of Sotheby’s and Christie’s combined.[17] In 2004, the global fine art market turnover was estimated at almost billion.[18] Art auction sales reached a record billion in 2007, fueled by speculative bidding for artists such as Damien Hirst, Jeff Koons, and Richard Prince.[19] The recent rise of the Chinese art market, both in terms of the size of its domestic sales and the international significance of its buyers, has, combined with a rich cultural heritage of art and antiques, produced a huge domestic market and ended the duopoly held by London and New York for over 50 years.[20]

Competitors

Christie's and Sotheby's are the leading auction venues. In 2002, LVMH acquired Swiss art advisory firm de Pury & Luxembourg and merged it with Phillips to form Phillips de Pury & Company, with the aim of breaking the duopoly at the top of the market.

Segments

Fine art auctions are generally held separately for Impressionist and Modern art as well as for Post-war and Contemporary Art. Pablo Picasso's works remain the most coveted lot as of 2004. In 2008 just over million of art by Damien Hirst was sold at auction, a world record for a living artist; however in 2009, Hirst’s annual auction sales had shrunk by 93%.[21]

Estimates

"Estimates" often reflect the consignor's ambitions as much as the auction specialist's considered opinion. They do not reflect commissions. To secure consignments, auction houses concede high estimates to suit the requirements of art owners.[22] Before an auction, interested buyers typically turn for advice to the auction house specialist who quotes the estimate and often recommends going beyond in order to secure the item.[23]

Commissions and Buyer's Premium

Auction houses operate contractually on behalf of sellers of goods, charging sellers a fixed commission (fee) amounting to a percentage of the “hammer price” for which a lot is sold.[24] Christie's published its commissions in September 1995, with its fees ranging from 20% on the least expensive lots to 2% on lots sold for over m; Sotheby's followed suit.[24] For Phillips de Pury & Company, final prices include commission of 25% of the first 20% of the next to million, and 12% of the rest, with estimates not reflecting commissions.[25] Objects sold are also subject to a further fee called the "buyer's premium", 15% being typical, with the term implying that by virtue of selling an object, the auction house performs a service for the buyer subject to remuneration. Thus, both the seller and the buyer of an object or lot sold by the major auction houses pay a fee. First implemented in 1975 by Christie's, the assessment of a buyer's premium is one of several auction-house practices to which art dealers object.[26]

Performance-based fees

Beginning in 2014, Christie's charged 2 percent of the hammer price of a work that meets or exceeds its high estimate. The fee does not apply to online only sales.[27]

Guarantees

An auction house may offer a guaranteed selling price, or "guaranteed minimum", a practice designed to give sellers confidence to consign works and to give potential bidders reassurance that there are others willing to buy an item.[28] Auction houses have offered guarantees since the early 1970s to encourage collectors to sell their artworks: The Art Newspaper reported that guarantees were first introduced in 1971 at Sotheby’s, when 47 Kandinskys and other works from the Guggenheim Museum were offered with a guaranteed minimum; similar arrangements followed in 1972 and 1973 for the Ritter and Scull collections.[29][30] A guaranteed amount is generally close to the lower estimate, with the seller and the auction house sharing any amount exceeding the guaranteed minimum.[31] In autumn 2008 when the market turned sour, Christie's and Sotheby's had to pay out at least million on works for which they guaranteed a minimum price but which failed to sell. In order to reduce their exposure to such losses, boost the market, and reduce volatility, the main auction houses now prefer that third parties take on this financial risk via "third-party guarantees" or "irrevocable bids": using this practice the auction houses sell a work to a third party for a minimum price prior to the auction and this selling price then becomes the “reserve” below which the artwork will not be sold. If bidding for specified works stops at the minimum price, which remains undisclosed, the "third party" acquires the lot; if bidding exceeds the reserve, the third party splits any profit from its sale with the consignor and with the auction house, the percentage going to each party varying with the deal.[32] These proportions, never disclosed to the public, are negotiated before an auction and specified in the contract signed by the auction house and the third party.[33]

Online sales

In 2003, Sotheby's abandoned its partnership with eBay after it lost millions through its various attempts to sell fine art over the internet.[34]

Controversy

In 2000, Christie's and Sotheby's admitted to a criminal price fixing conspiracy in violation of antitrust law, and each agreed to pay clients million in compensation for illegally coordinating the commissions they charged on sales between 1993 and early 2000.[34][35] Alfred Taubman, former chairman of Sotheby's, went to prison upon being convicted for his part in the scheme.[36] Sotheby's CEO Diana Brooks and her counterpart at Christie's, Christopher Davidge, confessed to the crime; Brooks implicated Taubman, who was fined million in addition to going to prison.[37] After Christie's announced it was cooperating with the government in the antitrust investigation in January 2000, clients of both auction houses filed hundreds of lawsuits against them; the suits were later consolidated into one class-action suit. That autumn, the houses agreed to a million settlement in the class-action suit, with Taubman saying he would pay million of Sotheby's million share.[24]

See also

Historical bibliography

The chief compilations dealing with art sales in Great Britain are: G. Redford, Art Sales (1888); and W. Roberts, Memorials of Christie's (1897); other books containing much important matter are W. Buchanan, Memoirs of Painting; The Year's Art (1880 and each succeeding year); F. S. Robinson, The Connoisseur; and Louis Soullié, Les Ventes de tableaux, dessins et objets d'art au XIX'e siècle (chiefly French).

Notes

  1. 1 2 3 4 5 6 7 Crane 1911, p. 268.
  2. ↑ Evelyn 1906, p. 303.
  3. ↑ Graves, p. 305.
  4. 1 2 3 4 5 6 7 8 9 10 11 Crane 1911, p. 269.
  5. ↑ "Sotheby's - Page Not Found". sothebys.com.
  6. ↑ Graves, p. 7.
  7. ↑ Graves, p. 252.
  8. ↑ Graves, p. 237.
  9. ↑ Graves, p. 80.
  10. 1 2 3 4 5 6 Crane 1911, p. 270.
  11. ↑ Catalog of items sold at the 1904 Massey-Mainwaring sale
  12. ↑ A History Of Insane Art Prices Digg.com Retrieved 16 November 2015.
  13. ↑ Vogel, Carol (November 12, 2013). "Bacon's Study of Freud Sells for $142.4 Million". New York Times. Retrieved November 12, 2013.
  14. ↑ "Picasso Painting Sells For Nearly $180 Million, Smashing Auction Record". BuzzFeed.
  15. ↑ Knelman, Josh (5 December 2011), "Art Theft: Not Such a Pretty Picture", Toronto Standard, retrieved 28 April 2012
  16. ↑ Bennett, Will (8 March 2002), "Red tape and taxes cost Europe lead in art market", The Daily Telegraph (London), retrieved October 2012
  17. ↑ Adam, Georgina (April 1, 2009). "Opinion: One-offs, but reassuring signs to the market—especially to Paris?". The Art Newspaper. Archived from the original on April 9, 2009.
  18. ↑ Art market trends 2004, Artprice, artprice.com, 2005.
  19. ↑ Reyburn, Scott (December 28, 2011). "Richter Tops Hot Artists as New Buyers Boost Billion Sales". Bloomberg.
  20. ↑ Clare McAndrew (March 14, 2013), US retakes top spot in art sales from China The Art Newspaper.
  21. ↑ "Hands up for Hirst - How the bad boy of Brit-Art grew rich at the expense of his investors". The Economist. September 9, 2010.
  22. ↑ Souren Melikian, When Auction Estimates Go Haywire, The New York Times, nytimes.com, October 7, 2011.
  23. ↑ Souren Melikian, Behind stellar sales of art market, a dangerous game, The New York Times, nytimes.com, January 18, 2008.
  24. 1 2 3 "Hammer houses of horror". The Economist. July 24, 1997. Retrieved 2012-11-20.
  25. ↑ Carol Vogel, Phillips Sale Totals Less Than Half the Low Estimate The New York Times, nytimes.com, November 13, 2008.
  26. ↑ Orley Ashenfelter & Kathryn Graddy, Anatomy of the Rise and Fall of a Pricefixing Conspiracy: Auctions At Sotheby’s And Christie’s, Journal of Competition Law and Economics, 1(1), 3–20, March 2005, doi:10.1093/joclec/nhi003.
  27. ↑ Melanie Gerlis (September 26, 2014), Christie's takes another 2% The Art Newspaper.
  28. ↑ Sarah Thornton, Financial machinations at auctions, The Economist, economist.com, November 18, 2011.
  29. ↑ Adam, Georgina; Burns, Charlotte (2 March 2011), "Guaranteed outcome", The Art Newspaper, retrieved 12 November 2012
  30. ↑ Feinstein, Roni (4 June 2010), "The Scull Collection", Art in America, retrieved 12 November 2012
  31. ↑ Melikian, Souren (18 January 2008), "Behind stellar sales of art market, a dangerous game", The New York Times, retrieved 12 November 2012
  32. ↑ Tully, Judd (22 September 2011), Assurance Policies: Third-Party Guarantees May Reduce Risk and Yield Rewards, Artinfo, retrieved 12 November 2012 Check date values in: |year= / |date= mismatch (help)
  33. ↑ Souren Melikian, Picasso Sells at Record Auction Price, The New York Times, nytimes.com, May 5, 2010.
  34. 1 2 Just the two of us - The duopoly in fine-art auctions is weakened but very much alive The Economist, economist.com, February 27, 2003.
  35. ↑ Commission rules against collusive behaviour of Christie's and Sotheby's, IP/02/1585, European Commission, europa.eu, October 30, 2002.
  36. ↑ Rohleder, Anna (November 14, 2001), Who's Who In The Sotheby's Price-Fixing Trial, Forbes, retrieved 2012-11-20
  37. ↑ Johnson, Caitlin A. (February 11, 2009), For Billionaire There's Life After Jail, CBS News, retrieved 2012-11-20

References

Attribution

External links

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