A sculpture by Alberto Giacometti sold for $101 million. A picture of wildflowers by Vincent van Gogh went for almost $62 million. A painting of the American flag by Jasper Johns went under the gavel for $36 million. And that’s just this month.
Recent auctions at Sotheby’s in New York have brought astronomically high prices, and that’s priceless news to Philipp Herzog von Württemberg. “We are in the midst of a mega-boom,” the managing director of Sotheby’s Germany and chairman of Sotheby’s Europe told Handelsblatt. “It’s like it was before the financial crisis.”
Yet the auction house will soon find itself dealing with somewhat more modest bids, maybe $500 for a chest of drawers, or $1,000 for a photograph, as it begins a collaboration with the Internet auction house eBay. Starting next year, the website’s 145 million customers will be able to take part in Sotheby’s New York auctions, with the two companies planning to set up 18 art categories on their websites. The tie-up is expected to yield up to €400 million, or $499 million.
The auction industry is stunned by the tie-up. Why is the cultured, upmarket auction house teaming up with the online flea market, they ask? Mr. Von Württemberg has done the math. Last year, 36 million eBay customers purchased goods worth an estimated $8 billion in the collector’s items category. “If only two, three or five percent of that comes our way, then the collaboration more than pays off,” he said.
“If only two, three or five percent of [eBay art customers] come our way then the collaboration more than pays off.”
Sotheby’s is seeking to enhance its coverage of the low- and mid-price market through the partnership, as it currently generates most of its revenues from high-rolling bids. In the mid-1990s, the New York firm grossed more than €2.0 billion from a quarter-million bids. Today, sales are almost $6 billion on just 40,000 bids.
Mr. von Württemberg has no concerns about Sotheby’s image. When the agreement with eBay was announced, he said, some customers voiced concern, but the criticism has faded. Above all, Sotheby’s hopes to attract younger customers through the partnership with Ebay.
Last year, the activist investor Daniel S. Loeb acquired almost ten percent of Sotheby’s through his hedge fund, Third Point. At the time, he said the company is “like an old master painting in desperate need of restoration.”
But the collaboration did not come into being due to pressure from Mr. Loeb. His tone became friendlier a few months ago when he was allotted three seats on the company’s governing board. “It is always good to have new people with new ideas onboard,” said Mr. von Württemberg, “even when not everything can be implemented.”
Mr. von Württemberg thinks Sotheby’s biggest problem is the unequal rules on the export of publicly and privately owned art. “While the export of privately owned art is denied, publicly owned art remains unaffected,” noted Mr. von Württemberg. He would like to see private owners compensated for the export ban after a fixed period of time, as they are in France or Britain.
Mr. von Württemberg was also sharply critical of the auction this week of two Andy Warhol paintings by the casino operator Westspiel, which is owned by the German federal state of North Rhine-Westphalia. Museums and art experts described the sale as a “sellout.” The state, however, insists that they were unable to stop the sale because of legal reasons. “Shifting the blame to the auction houses doesn’t work,” said Mr. von Württemberg, “contracts can be changed.”
The author is a Handelsblatt correspondent in New York, specializing in economics. To contact the author: email@example.com