Wednesday, April 01, 2009

Controversial New Buyer's Premium Plan

In a move to continue to generate as much income as they had during the boom of the art market, Sotheby's this morning announced a bold new buyer's premium strategy (Christie's is expected to follow suit shortly). Beginning May 3, 2009 (just in time for the highly anticipated Contemporary sales), in addition to the structured percentages they already charge [via Sotheby's website]


up to USD 50,000
above USD 50,000 - USD 1,000,000
above USD 1,000,000
25%
20%
12%

the auction house will levy a charge on each bidder based on how many times they raise their paddle during any session. While Sotheby's is arguing that this is designed to self-police the controversial practice known as "chandelier bidding" (I'm not sure how that would stop it, but...), it appears the goal is more to make money whether a lot ends up selling or not. The ADAA and other dealer organizations are expected to challenge the legality of this new strategy, but one arts law attorney I've spoken with said there is nothing illegal about the plan as presented.

Desperate times call for desperate measures, I guess...we'll see how this impacts auction participation at the Contemporary sales. For more information see this report.

10 Comments:

Blogger Julie Sadler said...

"a bold new buyer's premium strategy"
BOLD! Bold isn't the word!!! I know I am a stranger to life at the top, but I can assume that I would be seriously peeved if my auction house decided to charge me on a per bid basis.
Good luck with that!
That's what I say!

4/01/2009 09:40:00 AM  
Blogger Bromo Ivory said...

I am not sure about bids generated by the auctioneer would be prevented, but having a sliding scale of fees based upon the number of bids will generate more bids earlier, and may prevent non auction people from bidding just to push up prices.

But ... seems to me the amount being charged will be going up as well.

I did not that they aren't increasing any sort of transparency ...

4/01/2009 09:49:00 AM  
Blogger Bromo Ivory said...

Oh I didn't understand ... "...the auction house will levy a charge on each bidder based on how many times they raise their paddle during any session..."

Yeah that would stop chandelier bidding. But it could very well stop bidding altogether if you end up spending, say $10k on a painting you didn't get. Not that they are in any danger of having me bid on expensive art ... this would seal the deal.

It may not be good for auction houses, it will be VERY good for secondary art dealers like Gagosian.

4/01/2009 09:54:00 AM  
Anonymous A.K. said...

Well, at least they aren't charging for the ear-tug, head-nod, or nose-touch. Very funny, M. Poisson D'Avril. Nice post.

4/01/2009 10:03:00 AM  
Anonymous John and Jospehine Chandelier said...

Every time people talk about shady bidding practices, we are always blamed for this sort of ridiculous bidding. I must say while we enjoy watching auctions, we have never once placed a direct bid on any lot of pieces, and If I must extol our own virtues, we feel we shed much light on the proceedings and are hardly the forces for darkness that we are construed.

We have discussed many times the possible libel and slander lawsuits against reporters and auction houses who place the blame for ethically dubious bidding practices at our feet, I must say we have held out because we are simply above those scoundrels.

If Sotheby's and Christies wanted us to stop showing up, all they had to do was tell us rather than putting in elaborate economic rules preventing our participation. We'd be gone as quick as one switches off a light.

I hope this sets the record straight.

-J and J Chandelier

4/01/2009 11:10:00 AM  
Blogger Julie Sadler said...

THAT is hysterical.

4/01/2009 11:31:00 AM  
Blogger ruben said...

I thought one of the recession lessons was to teach people to stop being so greedy!

4/01/2009 12:08:00 PM  
Blogger zipthwung said...

I make a lot of money "chandelier bidding" I don't see it as unethical at all - quite the contrary, auctions aren't sticker sales - they are fevered battles for possession of valued commodities.

As such, anything that enhances the competitive sale experience is to be applauded.

As part of a team of "chandelier bidders" I help create a festive atmosphere that helps keep the gloomy gusses away.

SO it saddens me to think that the aution houses would curtail my ability to bid on stuff I don;t want, or to break up my consortium of collaborative bidders.

Shame on them for spoiling a good time. I predict this will keep real bidders away and leave the bureaucrats of bidding to turn the professionalized art world blue with their pedantic pinstripes.

4/01/2009 04:14:00 PM  
Blogger Tom Hering said...

I just read a report that one well known gallery has issued stopwatches to its staff, and will be decreasing an artist's share of a sale by 1% for each minute a collector stands in front a work. They plan to be quite open about this, using guilt (collectors hurting artists) to drive quick decisions / sales. I'll try to find the report again and post a link to it before this special day is over.

4/01/2009 06:38:00 PM  
Anonymous Anonymous said...

Very FUNNY!!!!

4/06/2009 08:31:00 PM  

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