Larry Schwartz
‘AT $100,000. ONE HUNDRED and ten. One hundred and twenty on commission. At 130. One hundred and thirty thousand. One forty on commission. At 140 thousand dollars on commission. Anyfurtherbidon?” The art auctioneer stands at the ornate timber rostrum in immaculate, dark suit and patterned tie. Every gesture is precise, calculated. He teases the bids along in an accent that is modulated, upper-class English. You might not guess he’s a local bloke. Nor does his demeanor suggest he’s flogging used goods.
In just over three hours on a balmy summer’s night in a converted 1920s theatre in the heart of upmarket eastern suburbia, artworks are being offered for sale at a rate of 50 seconds per item. Two thirds of 483 will sell, netting more than $2.8 million. The auction house takes about a fifth in fees from vendor and buyer alike.
Welcome to a languid confluence of business and art. Here you can sip chilled, white wine, bask in the fluorescence and admire fine artworks as if at an exhibition of sorts. Except that the aim is not just to admire but to own. And you might not walk away with the bargain you expect.
“You need four eyes and excessively strong perception and gut reactions as to whether that was a real or a phoney bid,” says Denis Savill, a Sydney art dealer who has practised as a (general goods) auctioneer and sold paintings for more than 20 years.
Auction night, with the auctioneer as lead player and the staff as stage hands, is somewhat akin to first night at a theatrical production, says Sotheby’s Australia’s director of pictures Mark Fraser.
But it’s hard to forget that the skyline is hand-painted and that, beneath the veneer, the fine art auction is yet another marketplace.
Eleanor Hart has been exhibiting her paintings for 30 years. A very occasional observer, she does not recognise any other artists among the investors and dealers in a crowd of more than 200 that seems “very manicured”; staff “groomed in the English manner”. This is bargain basement shopping in the guise of an outing to Georges, she says, unimpressed by the “gold-lamé touch”. She does not see it as entertainment.
Denis Savill makes it sound more like a blood sport. “Auction houses aren’t for the faint-hearted,” he says “It’s caveat emptor (let the buyer beware) … there is no cooling off period like private treaty. It’s there, hot; you’re on or you’re out. You can’t dispute it. With an auction, it’s full, final and finished. It doesn’t matter whether you’ve overpaid and you’re the only bidder and the auctioneer never had one real bid.”
All eyes tonight are on Justin Miller, 36-year-old managing director of Sotheby’s Australia. He stands there, confident and in command of his crowd.
Miller graduated in fine arts and anthropology at Sydney University, continued his studies in Paris then worked for Sotheby’s in London; he now has a key role in the auction house’s Australian operation.
He rated a mention recently in The Australian Financial Review’s business gossip column which said he had paid $2 million in a private deal for one of the Sydney gay community’s favorite watering holes, the Flinders Hotel. He had bought another pub, the nearby Beresford Hotel, a couple of months earlier but denied he would bid for a third, the Bentley Hotel. Robert Bleakley, executive chairman of Sotheby’s Australia, was the developer of a nearby property that contained “the trendy Verona cinema”.
Theirs would seem to be a lucrative line of work.
Part performance artist, part bargain-store spruiker, the fine art auctioneer uses suspense, vocal inflection and gesture not for the applause but the sale.
A timely glance in the right direction might find a nod to edge the bidding up beyond the reserve. Canvasses by Roberts, Streeton, Whiteley; bronzes by Rodin and Baldessin. The nature of the merchandise may make it seem glamorous. But the job is to sell.
“At $145,000 it is against you. One hundred and forty five thousand dollars only. One forty five…”
Auctioneers’ decisions on the winning bid is final. This has led to disputes in the past. Grievances have gone to court. But the auctioneer has invariably won the day.
The hammer hovers expectantly. The brow is raised. Another bid, perhaps? No? “All done.” The auctioneer gives a smart rap. “Well purchased,” he says.
The spectacle is not quite as interesting as in the art boom of the 1980s. Big name buyers who frequented the houses are more likely to bid through dealers or down the the telephone line these days. There are other practises, too.
Terry Ingram is an arts journalist who has been reporting on art auctions for The Australian Financial Review for 25 years. Sotheby’s and Christie’s, Ingram recently wrote, “indulge in the very elementary deception of pretending that objects have sold when they have not”.
A visitor to either firm’s rooms not familiar with auction practices “would be under the impression that almost everything was selling, even if it were not. The big auction houses no longer use fake bidding numbers but, except in New York, tend rarely to admit a work has not sold by calling out “passed”. Too many “passeds” could slow the sale and give the auction-goer the rightful impression that there are not lots of eager buyers huddled behind the pillars and the posts.
Nor might a visitor know that buyers pay the big houses, Sotheby’s and Christie’s, an extra 15 per cent on top of the “hammer price” for artworks selling for up to $50,000 and 10 per cent when the sale price is higher. (The smaller operations have a smaller fee.)
This buyer’s premium was introduced in Victoria in the late 1980s and Melbourne has become the main venue for art auctions largely because it was not permitted by the New South Wales Government until 1993.
Denis Savill was behind moves to boycott auctions at the time but failed to win enough support from other dealers. He still believes it is inappropriate that the auction houses, acting primarily for the vendors, should charge buyers a fee.
Vendors pay a varied fee up to 10 per cent. Because it is not fixed, they are able to negotiate deals to entice sellers. This is where the haggling takes place. Courted by rival houses, the larger collectors have the clout to whittle away at the fee. And whittle away they must. The market is extremely competitive. “I can go call on Mrs Smith in Camberwell,” says Jon Dwyer, who runs Joel’s painting section. “You go in and Christie’s may have been there already and two art dealers. I leave my card, and half an hour later a representative of Sotheby’s will turn up. We are all falling over each other for good quality pieces.”
Sotheby’s Justin Miller notes that there is a strong interest tonight “because there is so much going on with the Asian monetary crisis”. “Historically when we had the stock market crash in 1987, our business grew very steadily in the next 18 months as people put money into other forms of tangible investment,” Miller says.
“In the period ’91, ’92, ’93, we were having clearance rates of about 50 per cent to 55 per cent. That’s grown steadily since about 1994. Our major painting sale in August was 82 per cent … the signs are there that the art market is quite strong.”
“One forty five on my right,” Miller resumes his patter, punching the air jauntily with a silver pen in his right hand, a small wooden hammer in the left. Beside him are tables where colleagues take telephone bids. He stands against a backdrop of oils on canvas. Jeffrey Smart’s Dampier III will sell for $69,600 tonight; Brett Whiteley’s Little Orange (Sunset) $162,000; and Cecil John Brack’s The Scissors Shop remains unsold.
“At 145 on my right. At $145,000. And I shall sell to the person who is bidding at 145,000 on my right…”
The auctioneer is the standard bearer in the battle for the Australian art dollar that has set Sotheby’s and Christie’s, the two international firms represented here, battling for revenue at the top end of the market.
Directors of Christie’s International are reportedly considering a $1.2 billion takeover bid from the Swiss-owned investment firm, SBC Warburg Dillon Read, which is owned by the Swiss Bank Corporation. Observers say the takeover would significantly bolster the 231-year-old art auction house.
Roger McIlroy, managing director of Christie’s Australia says the two auction houses compete in a way that is “not dissimilar to Coca Cola and Pepsi Cola”. As with brands of cola, he says, “it’s all about marketing”.
Of the two, Sotheby’s (typecast in the industry as “dealers trying to be gentlemen”) has enjoyed the ascendancy through the 1980s and into the 1990s. But Christie’s (“gentlemen trying to be dealers”) has gained ground.
With a new management structure and market-oriented approach, says McIlroy, Christie’s is no longer a “gentlemen’s club”.
The two houses’ fortunes are reported as if it were the saga of long-time sports rivals eyeing the championship. From New York comes news that Sotheby’s achieved $US336.5 million total sales with 7.5 per cent growth in 1996. Christie’s recorded a 31 per cent growth in art auctions, netting $389.1 million in the same period.
At a recent sale, Christie’s netted a record $US206.5 million for artworks collected over 50 years by an American couple, Victor and Sally Ganz. The works were by artists including Picasso, Jasper Johns and Robert Rauschenberg.
“Christie’s promoted the Ganz sale with the determination of a Panzer division hitting the French border,” the critic and author Robert Hughes wrote in Time. “The success of the Ganz sale lay partly in the excellence of some of its contents, but largely in the adroitness of Christie’s promotion.”
Hughes contrasted this with the relative failure of the considerably less substantial Evelyn Sharp collection of modern art – “chopped liver compared with the Ganz foie gras – which fetched $US41.2 million, well short of the $57 pre-sales estimate, and precipitated a 6 per cent fall in Sotheby’s shares.
Sotheby’s Justin Miller notes that its share price rose soon afterwards. “Our various-vendor sale made about $US112 million and Christie’s various-vendor sale made about $US70 million. So in the end the two came rather close to each other.”
Art auction houses sell merchandise including rare books, classic cars, blue-ribbon residential and rural property, antiques, jewellery and furniture.
So while Sotheby’s Australia reported $72 million sales in 1996, a 30 per cent increase on the previous year, $16.5 million of it was from Australian and European paintings and tribal art. Christie’s Australia sold about $16 million paintings (it doesn’t deal in tribal art) in the the same period.
International connections have enabled the rival houses to overshadow locals including South Yarra-based Leonard Joel and Lawsons in Sydney, which had the local market pretty much to themselves until the late 1960s. The local houses have remained vigorous by not confining themselves to the priciest merchandise.
Dealer Denis Savill contrasts the style of a veteran auctioneer, such as Graham Joel, the old-style retired auctioneer and director of Leonard Joel, and the new breed who seem to reflect what he calls “the boutique, champagne culture we’re living in”.
“Joels used to get all the deceased estate matters in Melbourne. The big old families. The professional trusts. … If you went to a livestock auction 30 years ago, Graham Joel would have been perfect, perched among the … cattle and the sheep. Barking at people. I’m the boss. I’m king cock rooster here.
“In the real world of auction, that style of auctioneers … is extinct. There is more compassion, more finessing, more skill. You don’t have to be ruling with a rod of iron. You can actually do better with a feather duster.”
Leonard Joel’s Jon Dwyer believes Christie’s has overtaken Sotheby’s domestically as well as overseas. He says Sotheby’s has suffered bad publicity from incidents, including smuggling allegations that earlier this year resulted in the suspension of some senior staff.
To Joels’ Jon Dwyer, Christie’s has benefited from clever marketing and achieved good sales. It now has a better reputation. But this might be short-lived and Sotheby’s could soon regain its ascendancy.
It’s all part of the game…
More than 200 people gather in Armadale for the Sotheby’s auction. “It’s almost like a lucky dip,” says Mark Hughes, assistant director of the Sherman Gallery of contemporary art in Sydney. He’s never quite sure what he might purchase. Another Sydney dealer, Marlene Antico, says she deliberately sits in a corner towards the back to watch the other bids and waits before entering the fray. Others are here to observe the spectacle. Kevin Flanagan, a public servant from Canberra, has stopped to watch the proceedings.
Melbourne artist Eleanor Hart says there’s an ethos here that “doesn’t bear a lot of relationship to the real art world.”
Larry Schwartz Writer 