Auction houses say spring sales unhurt by scandal

Picasso's portrait of his wartime mistress Dora Maar, 'Bust of a Woman Seated in a Chair,' 1939, sold for $4.7 million at Christie's auction of 20th century art Tuesday. The painting brought the second-highest price of the night

May 13, 2000
Web posted at: 11:13 p.m. EDT (0313 GMT)

In this story: Fixing of commissions alleged Interest high, executives say Third player changes outlook RELATED STORIES, SITES

From staff and wire reports

NEW YORK -- Christie's and Sotheby's, the big guns of the high-stakes art auction world, may be operating under a cloud of scandal, but executives say you wouldn't know it by their annual spring sales.

Both houses, as well as a now more visible third player, Phillips, agree that a federal investigation and charges looming against Christie's and Sotheby's over fee-fixing is a major concern, but it has not had a big impact on sales.

GALLERY View the top-selling art from the auctions    VIDEO CNN's Frank Buckley reports on the federal probe into alleged fee-fixing by Christie's and Sotheby's Real 28K 80K Windows Media 28K 80K     AUDIO Christie's CEO Edward Dolman says he's pleased with the auction house's sales Monday and Tuesday 352K/28 sec. AIFF or 352K WAV sound Dolman stresses Christie's loyalty to its clients in the face of a federal probe into alleged price-fixing and collusion by it and Sotheby's 288K/28 sec. AIFF or 288K WAV sound

In its first major auction since the price-fixing scandal broke, Sotheby's sold Claude Monet's "Le Portail (Soleil)" for $24,205,750 on Wednesday, and saw good prices for works by Matisse and Toulouse-Lautrec. A Sotheby's executive said the federal investigation had obviously little effect on the buyers and sellers.

Christie's CEO Edward Dolman said business at his firm also had not suffered. "The success of our sales over the last couple of days, I think, are a testament to the faith our clients put in us," he said.

Fixing of commissions alleged

Sotheby's is being sued for allegedly conspiring with British rival Christie's International Plc to fix sales commissions. Dozens of civil suits have been filed by buyers and sellers of art, who allege they were overcharged.

Together, Sotheby's and Christie's control more than 90 percent of the $4 billion-a-year art auction market.

News of the fee-fixing scandal broke in January amid reports that Christie's was cooperating with federal investigators. It led to the resignation of Sotheby's Chairman Alfred Taubman as well as Diana "Dede" Brooks, its chief executive and the one-time doyenne of the business of selling art.

Coming "when we were gathering property for the sales," the scandal "certainly wasn't perfect timing," admitted David Norman, Sotheby's head of Impressionism and modern art.

"If these allegations are true, and again, nothing's been proved, it's a serious violation and it could affect the industry," said Judd Tully, editor-at-large for Art and Auction magazine.

"Everyone talked about it, (but) except for one instance when someone decided not to sell because of the investigation, it just hasn't knocked any buyers out," Tully said.

"The NASDAQ fluctuations are much more of a concern to me," Norman added. "I'm very, very wary of the stock market and the effect that has on the psychology of the buyers."

Interest high, executives say

Sotheby's had estimated that its spring sales of Impressionist and modern art, including a piece from Monet's famous water lilies series and a Picasso still life, would bring in $149 million to $206 million -- 15 to 20 percent less than Christie's predictions of $177 million to $236 million.

Sotheby's sold $104.5 million in paintings and sculptures Monday night. Including auction house commissions, it was the second-highest sale of various owners' art at Sotheby's in the past 10 years. Christie's grossed $177.4 million in art sales Tuesday and Wednesday.

Executives at both houses insisted they have seen no sign that client confidence has been damaged by the scandal.

"In terms of interest from buyers, there has been no difference whatsoever from past seasons," said Franck Giraud, the head of Christie's 19th and 20th century art departments. "Collectors look at art and the prices attached, and that's what's important to them."

Madison Avenue art dealer Richard Feigen agreed. "It's a matter of conjecture as to whether the Justice Department's investigation is affecting these sales," he said. "I would tend to think the supply is thin, and that the investigation really doesn't affect people."

Sotheby's Norman concurred. "We're in a market where good quality paintings seem to be increasingly hard to find. There's not much new," he said.

Norman thinks the two auction houses' sales estimates, which he said "were not very far apart," could have been reversed had a $25 million to $30 million Picasso gone to Sotheby's rather than Christie's, and was more attributable to Christie's offering what he saw as overly optimistic estimates.

"I think in some cases they overshot their estimates," he said. "We chose in many cases not to go as high. ... It was very competitive this season and Christie's plowed ahead, seeing us at a disadvantage. ... We had a lot more negative press."

Giraud disagreed. "I don't think we've been more aggressive this time around. ... At the end of the day one should compare the results. ... I'm quite confident that the estimates reflect today's market."

Third player changes sales outlook

Whatever numbers result for the two art world titans, it is Phillips that may forever change the outlook for future sales.

The No. 3 auction house, which was bought by luxury goods group Moet Hennessy Louis Vuitton in November, figures on a $100 million spring sale -- roughly 50 times its $2 million take last fall, according to International Executive Director Dan Klein.

LVMH Chairman Bernard Arnault "is spending a lot of money trying to buy their way into the first tier," dealer Feigen said. "It sounds like they're making big guarantees, and are obviously prepared to spend a lot of money."

Klein denied that Phillips was offering unusually large guarantees to clients. "I wouldn't say it's any more than any of the other houses," he said.

But he said LVMH and Arnault had provided the house the financial means to play in the big leagues for the first time. "We have the means of offering financial arrangements we have not had before," he said. The very idea of offering guarantees "wasn't a regular process for Phillips in the past."

Sotheby's and Christie's concede they lost some clients to Phillips. "Neither of us would give such high guarantees (as Phillips)," said Sotheby's Norman, which he said naturally led some consignors to go where top dollars were dangled.

"But I don't think that's going to be a lasting approach."

CNN's Frank Buckley and Phil Hirschkorn and Reuters contributed to this report.

Modern art sale grosses nearly $73 million at Christie's
May 10, 2000

Christie's
Sotheby's

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.