The deal that’s set to shake up the industry
Since the late Eighties, the auction rooms have edged ahead in terms of power
In the age-old battle between the auction rooms and the dealers, the perception is that, since the art boom of the late Eighties, the auction rooms have edged ahead in terms of power and influence. Previously, they were principally the place for dealers to buy stock and sell on to private clients.
Nowadays, private clients go to auctions and outbid dealers. Sellers, therefore, believe that the salerooms get the best prices and it has become something of a foregone conclusion that when a collector of note dies, their collection goes to auction. Think of the $835million David and Peggy Rockefeller collection (2018), designer Yves St Laurent’s $484million collection (2009) and Barney Ebsworth’s $318million collection of modern American art (2018), all of which went to Christie’s, and Alfred Taubman’s $377million mix of old masters and modern art that was sold at Sotheby’s in 2015.
But this perception of the balance of power experienced a major tremor last week when the executors of the estate of the American collector Donald B Marron, who died last December, announced that his 300-strong collection stuffed full of high-grade works by Matisse, Picasso, Rothko, de Kooning, Twombly and Richter and valued at between $350million and $450million, which everyone assumed would come up for auction in May, would instead be handled by three of
New York’s major art galleries – Pace, Acquavella and Gagosian.
Even hardened market observers were taken by surprise. “The deal is a complete game changer,” says Philip Hoffman, the chief executive of The
Fine Art Group, which advises collectors in acquiring, selling, investment and valuation. “We have watched as the auction houses have built their business at the expense of the dealers. This reverses that momentum.”
One can only imagine the shock for Sotheby’s, Christie’s and Phillips, which had all been pitching against each other for the business, offering a reported $300million in guarantees (I contacted Christie’s whose spokesperson told me they didn’t comment on business that they don’t handle). But just as an auction seemed inevitable, Pace Gallery’s president Marc Glimcher thought “enough is enough”. He spoke to his father, Arne, to Larry Gagosian and to William Acquavella and suggested they get together to propose an alternative scenario.
Glimcher points to a number of factors that he believes could have tipped the balance in the trio’s favour.
“The first is that we know the collection intimately,” he says. “Between us, we put it together over six decades. The auction houses don’t have that knowledge and expertise.” They also, he adds, “conceived a more dignified approach”.
“With auction sales, it’s all about numbers. We offered a more respectful experience, not disclosing individual prices, publishing a book about the collection without estimated prices, and curating an exhibition about Marron including many of his donations to museums. Importantly, we will not be shopping around for guarantors as the auction rooms do.
We have guaranteed the whole collection ourselves. It’s never been done on this scale by dealers before.”
Here we see the change that Hoffman describes: the increasing number of guarantors for the top auction lots are usually speculative collectors or dealers hoping to make a profit if something sells for more than they have guaranteed it. But Glimcher believes that art that has been repeatedly assessed for guarantees by auctioneers and their clients is “tired” by the time it gets to auction, and consequently worth less. Instead, the three dealers reportedly put in a bid involving a guarantee of $400million. They were, in other words, more confident than the auction rooms.
It is known that private dealers can get higher prices than auctioneers. In 2016, for instance, it was reported that the hedge funder Ken Griffin paid $500million privately for two paintings by de Kooning and Jackson Pollock – far above their auction records.
Last year, the Art Basel and UBS global art market report calculated that dealer sales amounted to $35.9billion, compared with the $29.1billion of public auctions (plus more than $1billion of private sales by the auctioneers). Many are sceptical of the dealer sales figures because they are difficult to verify, but next year’s report will include an approximation of the Marron sale in the dealer’s column, which will be interesting to see.
We will miss the razzmatazz of a public Marron auction, along with knowing how much everything sells for, and guessing who is buying. For now, we have to accept Glimcher’s assertion that, by the time of the May auctions at which it was anticipated that the Marron collection would play a starring role, “most of [the collection] will be sold”.
Going through the dealers may be more respectful, but it will be less transparent.