State of the Art Market

Every November, the auction house trifecta Sotheby’s, Christie’s, and Phillips, bring the world’s wealthiest people together in one room to participate in a performance that happily separates them from their millions. Last Wednesday night, Christie’s started off the season with their Post-War and Contemporary auction that racked up a total of $325.3 million within 2 hours. To art professionals, these auctions are business as usual, and it is understood that the final prices serve to establish the health of the global art market and calibrate the current value of artist’s works. However, to art world novices, the act of spending tens of millions of dollars at the drop of a hat, or rather, the raise of a paddle, is surreal. Even to art auction veterans, it is still surreal. I admit though, that watching these auctions raises my heart rate as I watch collectors surrender into bidding wars for the chance to own these artworks that for only a brief moment were accessible to the public.

On Wednesday evening, I watched the auction from the press box, and felt nostalgic for the days when this was my life- as a recent graduate from Sotheby’s Institute of Art. Coming back now after pursuing other experiences, I began to take in the action with a fresh new perspective. As the well-dressed bidders began trickling in, the equally fashionable specialists in the front of the room stood in their designated areas, facing both the crowd and the master of ceremonies with palpable anticipation for the start of the show. Leading with three of their youngest artists, the auction started off strong, selling a Rashid Johnson painting — completed only last year — to a phone bidder at $720,000, well above the $200,000 high estimate. Dana Schutz’s “Shooting on the Air” followed up, selling to an in-person bidder for $900,000, and finally Romanian artist, Adrian Ghenie’s “The Lidless Eye” racked up $1.335million (with fees) to another bidder on the floor, doubling its high estimate of $600,000. The subsequent lots all sold within the estimated ranges, with the exception of the highly marketed “Hurting the Word Radio #2” by Ed Ruscha, that reached a new record for the artist at $52.5 million with fees.

This shows that interest in new artists is strong, and hype over young talent is trumping established artist prices, unless the established artwork is part of an iconic collection, or also has significant historic value. After Ed Ruscha’s painting reached the new record to a phone bidder, the momentum in the room slowed down somewhat, and it was still only at lot 7. An Alex Katz painting, “Alex, Ada and Vincent” was the first to pass at $1.4 million, unable to reach the low estimate of $2 million, and the David Hockney painting “Sur la Terrasse” sold barely above the low estimate at $25.75 million to a phone bidder after the auctioneer reluctantly accepted bid increments of $250,000. The Ellsworth Kelly “Red Curve VII” sold above its $7 million estimate at $8.4 after the auctioneer stated there was “lots of interest”, but then the work by art world heavy weights Gerhard Richter, Francis Bacon, and Brice Marden all successively sold for less than their low estimates. What does this mean for their market? Apart from the excitement for the early lots, it seems as though collectors are generally acting with more caution. A Bloomberg article earlier this month compared the mood with the auctions that took place in the wake of the financial crisis in 2009.

After Cy Twombly’s “Untitled” at lot 19 and Andy Warhol’s “Big Electric Chair” at 20 sold to phone bidders, Larry Gagosian left the room, stage right, from his front row seat. By lot 24, more people started shuffling out of their seats, and that is when I realized that unlike a theater, there was no real place for people to walk out discreetly. The room was packed with seats with only a middle aisle for access. This is the same set up for auctions ten years ago when I was researching auction house practices for my thesis at Sotheby’s, and it is most likely set up in this way for the same psychological reasons that turn an art auction into a theatrical performance. For press, you bypass coatcheck, and immediately walk up the stairs behind the check-in counter, undetected. As a bidder though, you walk through the main entrance, past the exhibition halls to register your paddle, pick up a water bottle on the way to the grand staircase, and make your way up to your seat. Known bidders will usually be allocated in the front of the room, potential bidders in the middle, and art advisors or speculators are usually near the back. That means that the more well-known you are, the grander your entrance and exit, as you have to pass by everyone else. However, if you want to be discreet, there is little chance for that, as the back is roped off for press, and there are no breaks between the blocks of seats for people to walk across. By lot 25, Joan Mitchell’s “Plowed Field” selling below the $12 million low estimate at $11.5 million, there was a lot of confusion in the back of the room as to how to get out. I couldn’t help but imagine a situation where everyone would have to suddenly leave. That would be, what you would say in Spanish, a desmadre. Fortunately, that didn’t happen.

The rest of the sale continued in this way, a bunch of Tanseys, de Koonings, Dubuffets, all selling within their estimated range, and people steadily filtering out every 5 lots or so. Filipino art collector Robbie Antonio very visibly walked out after de Kooning’s lot 45, and as more people climbed over seats to make it to the side exit, the back of the room had the appearance of a private club as acquaintances recognized each other and high fived or shook hands on the way out. By lot 53, the auctioneer was speeding up, and there was the sense (at least I sensed it) that people were ready to go home or to dinner, or to whatever next event they were going to. Ultimately, the evening ended with an anticlimactic sale to an absentee bidder at the low estimate of $600,000, which is $735,000 with fees. Kind of sucks to be the last lot.

All in all, however, $325.3 million is a pretty healthy number despite anxiety over an oncoming recession, presidential impeachment hearings, and the tariff wars with China.