Tuesday, September 29, 2009
Auction houses become private dealers as power shifts from seller to buyer
The steady transformation of the big international fine art auction houses into private dealerships continues apace. The process has been going on for some time with the acquisition by auction houses of leading dealerships in the fields of Old Masters and Contemporary Art. But the fall of Lehman Brothers last year has punched a hole the size of the Grand Canyon into vendor consignments, forcing the auctioneers into conducting more and more private transactions. How this will affect the future of art price databases, which rely on the steady availability of public auction prices?
This morning, Bloomberg calculates that the forthcoming London contemporary art auctions, to be held by Christie's and Phillips de Pury during the week of the Frieze fair, are estimated to realise £20.8 million ($33.1 million). That contrasts with the equivalent sales last year, which carried a low estimate of £107 million, in other words around 80% down.
But interestingly, Bloomberg also reports that private sales transacted by Christie's outstripped its auction sales in the first half of 2009. "Christie’s had £133.1 million in private sales in the first half of 2009," writes Bloomberg's Scott Reyburn.
An artist friend asked me recently why Christie's had bought the London dealership Haunch of Venison. There's the answer. Foreseeing the imminent decline of the public auction market and knowing the extent to which buyers and sellers privilege discretion over transparency, the auction houses have steadily strengthened their foothold in the lucrative private sales arena. The risks of consigning works to public auction have multiplied in just a matter of months. The discreet private alternative starts to look very attractive.
Art market analysts have been predicting the seismic shift of power from seller to buyer for some time. It will be interesting to see how it shakes down during Frieze week and beyond.
The days when one could look to the auction arena for a relatively reliable indication of market activity are drawing to a close. What this says about the future of art price databases — hitherto the main source of data for market analysts — is another matter.
Market transparency recedes even further into the distant horizon. Does that matter?
Li Songsong (b. 1973) Cuban Sugar (2006)
To be offered by Christie's in London on 16th October 2009