Christie's International has announced new commission and higher premium structures.
Although the auction house says its action will "benefit both buyers and sellers", it is hard for this observer to see how. Effective as of March 31, 2000, Christie's will charge a buyer's premium of 17.5% on the first £50,000 ($80,000) and 10% on any amount over £50,000 ($80,000) on property sold in the firm's principal salerooms. That's a hike of 2.5% on the first $50,000 and a hike of 7.5% on the next $30,000. The rate hike comes just in time to hit the April photographs auction in New York and the May photographs auction in London.
Incredibly, Edward J. Dolman, Christie's new chief executive officer, claims "Christie's new owner and new management has been considering a change in our commission and premium structure for some time. Its announcement has simply been accelerated by the recent events (see above story for the "events" currently involving Christie's problems with commission and premium structures)."
That's the bad news. The good news? It would strike me as highly unlikely, but not impossible, any auction house will follow suit any time soon. Sotheby's is staring at Department of Justice action and a civil class action suit over alleged collusion with Christie's. What neither house needs right now is for their actions to confirm the rightness of these actions. Just think of what impact hiking rates in tandem once again just after criminal and civil actions are announced might have on a judge or jury. And if Sotheby's doesn't follow suit, Christie's is virtually assured of losing market share to Sotheby's and other auction houses like Swann and Phillips.
Christie's claims its "new" consignor's commission will be calculated on annual purchases as well as sales--something that high rollers have reportedly been doing for years in any case.
Christie's claims it has instituted what it calls "significant reductions in the consignor's commissions charged to consignors of property. At almost all levels of aggregate transactions, from £60,000 ($100,000) through £3 million ($5million), the commission charged to all private, trade and institutional clients will be lower than on the current schedule." However, the auction firm provided no details of what this structure would be and didn't indicate what impact it would have on areas that were traditionally negotiated such as illustration fees, insurance and buy-ins.
According to Christie's, clients who purchase or sell £3 million ($5million) or more in any calendar year will receive special terms that will be negotiated on a case-by-case basis. I know of no one except London's mysterious L080 from the Jammes sale who would have qualified this past year in the photographic arena for this "largess".