The Back Room: Auctioneers Unleashed
This week: deregulating NYC's auctions, an online sales surge, dumpster-diving for greatness, and much more.
Every Friday, Artnet News Pro members get exclusive access to the Back Room, our lively recap funneling only the week’s must-know intel into a nimble read you’ll actually enjoy.
This week in the Back Room: deregulating NYC’s auctions, an online sales surge, dumpster-diving for greatness, and much more—all in a 6-minute read (1,656 words).
Top of the Market
On Tuesday, we learned that New York City has quietly killed a set of regulations developed over the past three decades to promote transparency and fairness in the auction sector. The move presents major new uncertainties in a trade already infamous for its secretive, freewheeling nature.
City Council members ratified the rollback last summer. While it will not technically be complete until June 15, almost all of the most consequential guardrails already disappeared last month.
According to the New York Times, which broke the story, the deregulation is part of a broader effort to aid a variety of industries still trying to rebound from the pandemic, such as laundries, sidewalk cafes, and arcades.
But unlike these other businesses, New York auction houses can pull in billions of dollars in revenue annually. That’s a dramatic upgrade from the 1980s, when the city began regulating the sector following multiple lawsuits alleging that auctioneers had acted against sellers’ interests.
Why do this now? “Representatives for the city told the New York Times it had received very few complaints about the auction industry in recent years, and that they believe broader consumer protection laws will suffice to keep bad actors in line,” Eileen Kinsella wrote.
That could prove true. But to understand the stakes, let’s look at the most important regulations voted out of existence.
Each of the deregulations below already came into effect on April 10, with one noted exception…
- Licenses No Longer Required: Operating as an auctioneer in NYC used to demand securing a license from the city. As of June 15, however, anyone who wants to hold sales under the hammer can do so legally without local certification.
- Financial Interests No Longer Disclosed: Auctioneers are now free of any legal obligation to divulge when they or third parties have direct monetary stakes in offered lots, such as house guarantees or irrevocable bids. That could mean the end of the auction-catalog symbols and verbal announcements disclosing financial interests at the start of live sales.
- Estimates No Longer Constrained: Auction houses previously had to set every low estimate above the lot’s reserve price to give bidders a clearer understanding of the threshold at which the consignor would actually sell. Not anymore.
Chandelier Bidding No Longer Capped: Rules used to hold that auctioneers could only call out imaginary bids to spur demand up to a lot’s reserve price. That prohibition is now gone, theoretically permitting auctioneers to try upping the value of their commission by countering actual bids with fake ones even above the price at which a lot would sell.
How Is the Industry Reacting?
Eileen wrote that responses from several advisors, art-law attorneys, and other experts outside the auction houses “ran the gamut from the equivalent of a verbal shrug to serious concern about whether a lack of transparency could damage client confidence and harm the market.”
One specific red flag: Most global auction hubs (including London and Hong Kong) followed New York’s trade-specific regulations in the absence of local counterparts. The worst-case scenario, then, would be that Gotham’s rollback leads to an international backslide in best practices under the hammer.
However, reps from Christie’s, Sotheby’s, and Phillips each released statements essentially pledging to continue upholding the same high standards of ethics, fairness, transparency, and client service as they had before NYC’s regulatory sunset. Will lower-level houses follow their lead?
The Bottom Line
Don’t expect much to change at next week’s major spring auctions. The symbol-packed catalogs have already been published (even if just online), and procedural minutiae will be under maximum scrutiny because of the recent media coverage around the sector’s deregulation.
The long-term picture is murkier. Even if scores of bad actors strike immediately, it could take years to reimpose rules due to New York’s pandemic-backlogged court system and slowfooted municipal bureaucracy. (Remember, it took almost a year after last summer’s vote to actually strip away these regulations.)
So let’s hope the city council’s bet pays off for everyone involved in the global art trade. If not, at least there may be job openings for us in a bunch of freshly founded NYC laundromats.
Your trusty Wet Paint scribe is taking a break this week. Here’s what else made a mark around the industry since last Friday morning…
- The India Art Fair returned after two years with a focus on attracting new buyers. Prices started as low as $200, and reported sales reached up to $45,000 at Jhaveri Contemporary. (Artnet News Pro)
- Market highlights at the latest Art Brussels included sold-out presentations of works by Abdelkader Benchamma (priced from €4,000 to €45,000/$4,200 to $47,800) at Galerie Templon, and by Koenraad Dedobbeleer at Clearing. (Artnet News Pro)
- Christie’s hopes to fetch $180 million for 1,500 works of art and design from the collection of San Francisco connoisseurs Anne and Gordon Getty this October. (Artnet News)
- Sotheby’s has doubled its footprint in Brussels thanks to a new gallery and office space, which is now displaying pieces from Belgian collections slated for private sale and auctions in Paris, Cologne, and London. (Press release)
- An Asian private collector won Zhang Daqian‘s Landscape After Wang Ximeng (1948) for HK$370 million ($47.1 million) at Sotheby’s Hong Kong, a new auction record for the artist and for any Chinese ink painting. (Press release)
- PPOW has taken on Bronx-based multidisciplinary artist Shellyne Rodriguez (included in the gallery’s now-on-view Independent booth) and the estate of Jimmy Desana, which used to be repped by Salon 94 in the pre-LGDR era. (Wet Paint)
- Almine Rech added Ivory Coast-born, U.S.-based Ouattara Watts to its roster, with plans to debut a solo show in Brussels in 2023. (Watts is also still repped by Karma.) (Press release)
- Gagosian and White Cube collaborated to mount two nearly identical Andreas Gursky shows in New York and Bermondsey (respectively) at the artist’s request; works are priced from €400,000 to more than €2 million ($421,000 to more than $2.1 million). (Financial Times)
- Sheena Wagstaff, chair of the Met’s modern and contemporary art department for nearly a decade, will step down this summer. (ARTnews)
- MOCAD officials decided to “rescind their offer of employment” to Cara Courage three months after naming her executive director, per a MOCAD spokesperson. The former head of Tate Exchange joined the institution in February after the ouster of then-director Elysia Borowy-Reeder. (Detroit Metro Times)
- The Kimbell Art Museum in Texas revealed itself as the winning bidder for Chardin’s record $26.8 million still life of strawberries this March. But France’s use of cultural heritage law still gives the Louvre two years to buy the work for the same price. (Artnet News)
NFTs and More
- The U.K.’s High Court ruled that NFTs are property separate from the underlying asset they link to, yet attorneys disagree over the decision’s international significance. (Artnet News)
- Bored Ape Yacht Club creator Yuga Labs raised $320 million in a sale of virtual land related to their forthcoming metaverse game, Otherside—and triggered one of the highest-ever spikes in gas fees on the Ethereum blockchain. (Bloomberg)
The Revolution Was Digitized
The onset of the pandemic forced technophobic auction houses to drag their operations into the 21st century, and the system upgrade may have forever changed the game for online-only sales.
- Last year, the Big Three houses, along with Bonhams and Artnet Auctions, generated a combined $1.5 billion in online-only sales, up 35 percent year-over-year.
- Sotheby’s, which invested heavily in tech infrastructure pre-pandemic, led the pack by generating $778.5 million in online-only sales in 2021. Christie’s placed second, with $620.8 million.
- Phillips landed in last place among the five sellers, with just $15 million—less than both Bonhams and Artnet Auctions.
To find out how much art sold across all auction types in 2021, which countries bounced back fastest from the pandemic, and more, click through to download the Spring 2022 Artnet Intelligence Report.
“They were saying it will probably be on the wall of a hedge fund guy or in the desert in Arabia. I remember being offended that speculation centered on men, and nobody thought that a woman would either have the money or the balls.”
—Elaine Wynn on the narrow-minded market watchers who failed to consider that she could be the buyer of a $142.4 million triptych by Francis Bacon in 2013. (WSJ Magazine)
Work of the Week
Francis Hines’s Untitled, from the Mutagenesis Series (No. 805)
Selling in: “Francis Hines: Unwrapping the Mystery of New York’s Wrapper”
Closing date: June 11
In the 1970s, U.S. artist Francis Mattson Hines was known for fabric-wrapping several New York City structures (a là Christo and Jeanne-Claude), including the Washington Square Arch in 1980. But his work as a sculptor, painter, and illustrator never caught on in the art market, and he eventually retreated to Connecticut, where he died in obscurity in 2016.
A year later, a local mechanic named Jared Whipple found hundreds of Hines’s artworks in a dumpster used to clear an abandoned barn that likely served as the late artist’s studio. Whipple and a friend hauled dozens of the works back to his warehouse for further inspection, sparking five years of research that transformed Whipple into a de facto scholar of the long-forgotten Abstract Expressionist.
Now, with the blessing of Hines’s family, 31 of the recovered works are on exhibition—and selling fast. Dealer Hollis Taggart opened a solo show at his Southport, Connecticut space last night, as well as a small “focused presentation” in his Chelsea headquarters.
By press time, 23 of the 30 paintings on fabric-wrapped panels had already sold, for prices between $12,500 and $35,000 each. That leaves only seven paintings (including the one featured here) and one sculpture (priced at $55,000) up for grabs. So if you think Hines could be the next great rediscovered genius, you still have a chance to get in early… but you’ve also got competition.
Thanks for joining us in the Back Room. See you next Friday.
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