A live auction of fine art at Sotheby’s.
It should come as no surprise that accessing fine art often comes at a price, and a pretty steep one we might add. There are very few museums that offer free admission on a regular basis, and paying for art, particularly rare pieces, can quite literally cost collectors millions.
It was the late pop artist Andy Warhol who once said, “Making money is art and working is art and good business is the best art,” merging the arts with business in a fashion that has been adopted by commercial artists, auction houses, and private collectors. Perhaps no organization knows how much money there is to be made from art right now than Sotheby’s, a leading auction house based in New York City. In an era where Christie’s, another famous fine art auction house, sold a painting for an unprecedented $142.4 million, it makes sense that competitors like Sotheby’s would want to up the ante to turn even greater profits.
According to Artnet, “Sotheby’s auction house is betting big on the latest global art market boom with financial filings showing the house is increasing its borrowing from corporate lenders in order to extend more guarantees to potential cosigners,” of the business strategy that Sotheby’s is currently employing. Artnet refers to Sotheby’s new goals as a “heightened risk position,” and points to the presence of hedge fund manager Daniel Loeb, who recently won three seats on the auction house’s board, as the guiding force behind the new business strategy.
With Sotheby’s financial results for the first half of 2014 on the rise, it seems as if this aggressive new strategy is already paying off. “Among the goals listed for the increased borrowing,” writes Artnet’s Eileen Kinsella, “are raising ‘the maximum permissible amount of net outstanding auction guarantees.” Kinsella also notes that these auction guarantees “are widely seen as a barometer of the outlook for the auction business,” which suggests that Sotheby’s is going to experience even more financial gain in the months to come.
In addition to its increased borrowing from corporate lenders, Sotheby’s is also looking to increase its presence in an online sphere. The auction house recently partnered with popular online auction site eBay, which will undoubtedly add to the company’s overall reach. “Our job is to be inclusive and to get the very best most exciting offering on both platforms that are reinforcing to one another,” explained Sotheby’s CEO Bill Ruprecht of the company’s expansion to online dealings.
With so much focus on improved business strategies and number crunching happening at Sotheby’s and other auction houses, it might appear as though the actual pieces of fine art are getting lost among the major corporate dealings. However, classic works from Claude Monet, Francis Bacon, and the Meiyintang collection aren’t going anywhere – they’re just getting more expensive.
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