Issue #150  10/20/2008
The Auctions and The Market: a Quick Overview From New York City

If everybody's thinking the same thing, then nobody's thinking.

- George S. Patton

By Alex Novak

A lot of our readers have been wondering about the effects of the economic difficulties on the photography market and the recent photo auctions in New York City. While I have written several pieces with my prognostications, it was interesting to see those predictions hit virtually right on the mark during the wildest swings that the international stock markets have ever seen. (See: "On the Economy" at http://www.iphotocentral.com/news/article_view.php/157/148/885 , and "Photo Market: Up? Down? Or How about Like the Movie--Sideways?" at http://www.iphotocentral.com/news/article_view.php/150/141/824 ).

I certainly don't profess to have a crystal ball, but I think a bit of commonsense, a dose of rationality and an understanding of history help. The first thing I should point out is that--contrary to common belief--the auctions are NOT the market. They are just the most visible part of the vast iceberg. None-the-less, they are fascinating to monitor in such times.

No, the world did not come to an end when the hammers came down at the various auction houses. And, no, prices didn't drop--at least not so much that one would notice. Yes, buy-ins (those lots that went unsold) were up considerably, especially at Christie's where the material was often mediocre and overpriced, and there were just too many lots. And the totals were down just a bit, more reflecting the material on offer than anything else. Excluding Swann, which has its auction tomorrow (see: http://www.swanngalleries.com/full.cgi?index_id=395&sch_id=415 ), the total take for the four houses, which held auctions this past week, was still about $16-3/4 million--not bad, when you consider the nausea-inducing dives and climbs of the stock market over this past week. And, not bad, when you consider the last minor recession's figures in the fall of 2002 which just managed to top $10 million (including Swann's total then), and when buy-ins (unsold lots) at the regular multi-owner sales at Christie's were a whopping 53%, Swann 49% (including adding 3% of the sales after the auction!), Sotheby's 41% and Phillips 32%. As you will see below, the latest buy-in rates were actually quite modest compared to the 2002 figures, although certainly higher than they've been in more recent auctions.

I also think the huge new buyers' premiums at all the auction houses are taking a toll on sales and consignments. It is very difficult to make a purchase (or a sale) when the house takes from 35-40%+ of the total, right off the top when you total sellers' fees and buyers' premiums. These increases also have absolutely no validity except for pure greed on the part of the auction house's management, who are killing their golden goose. The concept that inflation necessitates an increase in the buyers' premium from the original 10% (yes that's what it was back in the early 1980s) to 25% today (for the top three houses; 20% on the other two) is false. Inflation itself actually raises the prices on art and photography more than the average inflation rate, and therefore also on the take of the house, without the auction houses having to increase their percentage of the take. The increased buyers' premiums are finally being factored into the buyers' decision-making process, and many items now just look too high only because of this huge premium increase. Frankly, this makes it easier for dealers and galleries to compete both selling and taking items on commission for resale. The auctions have just grown too greedy and expensive for buyers and sellers alike--and at the most inopportune time for the auction houses.

I would suggest to our readers that buying from reasonable galleries and dealers, whether at shows, over the Internet, or privately is the most efficient and intelligent way to go for many, if not most items, at this time. So is consigning good work for sale. As an alternative, you might seek out slightly smaller auctions which are less greedy about their percentages, although the second tier has also moved up its percentage to 20% recently--a major mistake in my estimation. They could have taken away more share of market had they stayed at the lower rates.

If the big auctions go back to their traditional role of providing a facility for liquidating work at lower margins, they will have a place in this market; otherwise the market may pass them by and find more equitable methods to achieve liquidity. That would mean though that they would have to tightly control costs, invest intelligently in the right areas and be able to withstand some stock market pressures for quick quarterly returns (that's a problem for Sotheby's, in particular, which is listed on the exchange). I have seen little inclination or ability to do so from the managements of these companies, whose expansions into other areas have actually hurt their core businesses. As one example: when you compete directly with galleries, you can't expect those galleries to be as supportive of your efforts as they were in the past. For instance, I wonder what New York City photo dealer Edwynn Houk thought about Phillips de Pury & Co. taking away Annie Leibovitz and representing her work now exclusively. I think Leibovitz and Phillips have made a long-term mistake on this one, but for different reasons. Phillips already represents the estates of photographers Helmut Newton and Guy Bourdin.

I also wonder what White Cube really felt about Sotheby's recent massive sale of Damien Hirst's work, or what that flooding of the market will eventually do to Hirst's future pricing (not that he cares, admittedly).

If I were a collector, I might think hard and long about buying an artist whose hype exceeded their actual value in the market and to their position in art/photography history. If I were a dealer, I might reconsider placing all my chips on bidding for clients at these auctions, if those same auctions can then steal away the top artists your gallery invested in while building those very artists' reputations. And, if you are an up-and-coming artist in need of good dealer support to build your reputation, I think you might find it more and more difficult to get that, given that dealers only recoup their investments from very few of their overall group of artists, and that is now in danger of being co-opted by the auction houses, who are NOT known for supporting non-established artists.

Back to this set of auctions: while some of the most overinflated material at these auctions did suffer some spectacular buy-ins, there was no panic discounting. Quite the contrary: I actually overheard Sotheby's expert Chris Mahoney tell one prospective after-bidder that while he would take offers as usual, "this was not a garage sale." There were few real bargains to be had, except perhaps the William Eggleston collection at Christie's and the Robert Mapplethorpe images of Lisa Lyon at Phillips. These are two of the groups that come to mind that I thought were still somewhat undervalued at these sales--largely because most of the material had not come up previously and been run up. Not surprisingly they both sold very well indeed.

In fact, one of the most puzzling things to me about this auction season was that--contrary to the rumors--it looked like most reserves were set extremely high at these auctions, and so were estimate ranges. Many more lots would have sold, but the reserves were often right at the low estimate or just a single increment below, although on some of the more overestimated lots there seemed to be much lower reserves. That's always a bad strategy these days, because the auctions have driven buyers out of the room and on to the phones, so few bidders are available to actually hear the lower reserves for the higher priced pieces. It looked like the estimates were often based on the last sales records, which clearly were not going to be bested this time out on those run-up priced images by Penn, Frank, Avedon, Horst, Adams, Arbus and others. The more reasonably priced and interesting images by these fine photographers did indeed sell, as they should; but those high six-figure prices (or just overpriced lower ones) on late printed and readily available photographs in large editions did not hold up well this time around. There were, of course, exceptions, but the line of willing buyers to overpay has evaporated, although there are still plenty of buyers for reasonably priced quality works.

I will be reporting on more of the action details over the next few weeks, but here are some of the overall results and my quick analysis.

Christie's chose what might have been the exact wrong moment to launch its first Contemporary Photographs sale. The first auction to kick off the week, it had a little rough sledding. It did just break the million dollar mark and sold just barely 58% of the lots. Only one lot topped the hundred thousand dollar mark: lot 61 Hiroshi Sugimoto's Seascapes (3 silver prints) at $110,500, which was $10,000 under the low estimate. It sold to a U.S. collector. Several observers noted that the material in this sale was somewhat erratic, although I thought it was overall a decent first effort.

Christie's best auction, as noted above, was the Bruce and Nancy Berman collection of William Eggleston photographs, the second sale in a series from these L.A.-area collectors. This sale easily beat its high estimate value and sold 90% of the lots, bringing in nearly $3 million on a mere 54 lots. Five lots broke over the hundred thousand dollar mark (and one other just missed). Lot 144, the Los Alamos portfolio of 75 dye transfer prints, sold for an astounding $1,022,500--more than the entire take for Christie's Contemporary Photography sale. That lot was the only million-plus lot of this auction week--heck, it was the only lot to make it over $400,000! Christie's claimed a world auction record for Eggleston for that result, but I don't feel portfolios count. Still it was quite a strong showing.

Christie's regular multi-owner sale brought more down-to-earth results. For the 256 lots on offered, Christie's eked out just a little more than $3.4 million with a sell-through percentage just shy of 54%. Its top lot was an Irving Penn (lot 403, Black and White Vogue Cover) at $266,500, which sold to an Asian woman in the room, who was buying for her family's collection. She bought a number of lots, including a beautiful hand-colored Southworth & Hawes ¼-plate daguerreotype of flowers for a whopping $110,500 (good for a tie for fifth place in the sale). She and just a couple of other bidders in the room helped salvage this sale for Christie's.

For my taste, this auction had little focus and most of the material was fairly mediocre. When auctioneers say to me that they can't sell lower priced items, what they should say is that they can't sell THESE kinds of lower priced items.

Some of the more notable buy-ins that went unsold included: lot 211 (estimated at $150,000-250,000), a weak Carleton Watkins album; lot 221 ($60,000-80,000), Irving Penn's Frozen Food (with String Beans), although it sold at Sotheby's for a $70,000 hammer price; lot 235 ($90,000-120,000), Penn's Cuzco Children (neg. 263) in a silver print; Lot 244 ($50,000-70,000), Penn's Dusek Brothers; lot 269 ($90,000-120,000), Eugene Atget's Saint-Cloud, a late printing-out paper print that was quite nice, but overpriced; lot 281 ($70,000-90,000), Robert Frank's Bonjour, Maestro, Mabou; lot 310 ($50,000-70,000), Ansel Adams's Special Edition of Fine Prints: Photographs of Yosemite; lot 311 ($90,000-120,000), Adams's Portfolio Four: What Magic Word; lot 311 ($40,000-60,000), Diane Arbus's A Girl in a Hat at Central Park Lake, NYC; lot 345 ($100,000-150,000), Adams's Portfolio Three: Yosemite Valley; lot 351 ($30,000-50,000), Adams's Monolith, Face of Half Dome; lot 356 ($25,000-35,000), Adams's Mount Williamson, Sierra Nevada; lot 357 ($40,000-60,000), Adams's Clearing Winter Storm; lot 371 ($50,000-70,000), Penn's The Angel; lot 387A ($60,000-80,000), Richard Avedon's Andy Warhol and Members of the Factory; lot 392 ($50,000-75,000), Walker Evans's Second Avenue Lunch; lot 396 ($20,000-30,000), Robert Frank's Venice, 1949; lot 398 ($30,000-50,000), Evans's Pabst Beer Sign, Chicago; lot 422 ($90,000-120,000), Edward Weston's Elbow (this was a MoMA print of the month club issue that was a bit yellow at the edges and was totally overestimated); lot 424 ($20,000-30,000), Hoyningen-Huene's Horst Torso (late and small print that was well overestimated); lots 426 and 427 ($20,000-30,000 and $50,000-70,000), two Stieglitz Equivalents that were mediocre and overpriced; lot 441 ($20,000-30,000), Hoyningen-Huene's Divers, Paris (late and small platinum print on cotton cloth); lot 443 (estimate $30,000-50,000), Horst's Odalisque I, another one of those platinums on cotton. If these lots had sold at just the low estimate (plus premium), Christie's would have tacked on over $1.6 million more to the auction's totals, making it a $5 million sale.

No wonder Christie's eliminated its trade credit facility, but added a credit card option (up to $150,000 in person--as if anyone has a credit card company that will extend that much credit any more). I know that I will shop less at Christie's because of that change. Other houses have not made any changes in their credit policies.

The Christie's public relations machine had poor Matthieu Humery, the new head of the New York Photographs Department, saying the following about this sale: "Today's sale witnessed solid results for master photographers Irving Penn, Diane Arbus, Garry Winogrand and Edward Weston." Hmmm.

Over at Sotheby's the air in the room seemed to have disappeared at its evening sale of its multi-owner auction. Perhaps we just missed the absent Denise Bethel (out with a bad case of the flu) on the podium. Her replacement was a game young man, who was actually a decent auctioneer, but seemed to be rowing upstream in molasses. There were also no big blockbusters in this sale and the room was quiet and somber, although there certainly were more people here than at Christie's.

Still there was more interesting material on offer here. While the overall sell-through wasn't all that impressive at 68.8% with a total of $5,666,312, this auction still did much better than Christie's multi-owner sale on nine fewer lots. Despite that, most observers felt that more of the material would have sold here in past auctions than this past week. It was also true though that the failure to sell (or sell well) could at least partly be attributed to the material just missing a bit of that illusive magic that comes with truly great prints and overaggressive estimates based on a steep trajectory from past successes.

The top lot (#21) of the night (and auction) was a 1930 Man Ray of Jacqueline Goddard that sold to the Bluff Collection Limited Partnership for $374,500 over an estimate of $250,000-350,000. The second highest price went to lot 26, an early print of Ansel Adams's Moonrise, Hernandez, NM, which sold to American collector Jack Hastings for $362,500 (estimated at $200,000-300,000). Andrew Smith, the Santa Fe, NM dealer who specializes in Adams's work, said about this sale, "For the vintage Moonrise, which was a wounded photograph with significant pre-restoration problems and a clumsy restoration, to sell for over $360,000 is a sign of strength for Adams's rare important prints." There was a tie for the third highest print of the sale. Lot 7, the cover lot, was Edward Weston's lovely and rare Tina on the Azotea, 1924, which went to a phone bidder for $302,500. That price was also matched by Richard Prince's Girl Friend on a Motorcycle (lot 54), which went to another phone bidder. Nothing else even broke the $200,000 mark here. And when was the last time you saw a print in the evening sale here that had a two-page spread devoted to it and sold for a hammer price of only $5,500 (lot 31, Doris Ulmann's Group of Boys, SC)?

While the evening lacked any pizzazz, the day session seemed a bit more average (not spectacular, but it rarely has been of late). It did bring the sold level up a bit, which needed some help after the evening's more problematic buy-ins. While Sotheby's did a little better on some of the big names than Christie's, there were many of the lots from these artists that failed to find bids, including: lot 3 (estimated at $30,000-50,000), Ansel Adams's Clearing Winter Storm; lot 5 ($30,000-50,000), Tina Modotti's Calla Lilies printed later by Manuel Bravo; lot 6 ($30,000-50,000) Dorothea Lange, Taos; lot 9 ($60,000-90,000), Clarence White's Portrait of Alfred Stieglitz; lot 13 ($30,000-50,000), Hoyningen-Huene's Divers, Paris (late and large platinum print on canvas); lot 14 ($150,000-250,000), Edward Steichen's Portrait of Auguste Rodin; lot 15 ($50,000-80,000), Heinrich Kuhn's Portrait of Edward Steichen; lot 16 ($60,000-90,000), Karl Blossfeldt's Blumenbachia Hieronymi; lot 17 ($150,000-250,000), Imogen Cunningham's False Hellebore; lot 20 ($100,000-150,000), Laszlo Moholy-Nagy's Marseille; lot 28 ($100,000-150,000), Paul Strand's Growing Iris, ME; lot 29 ($70,000-100,000), Edward Weston's Egg and Bone; lot 32 ($50,000-100,000), Dorothea Lange's Demonstration, San Francisco; lot 41 ($30,000-50,000), Robert Frank's Paris and the Chairs, etc.; lot 42 ($120,000-180,000), Robert Frank's London (Hearse); lot 43 ($250,000-350,000), Irving Penn's Asaro Mudmen; lot 48 ($100,000-150,000) Diane Arbus's Child with Toy Grenade in Central Park, NYC printed by Neil Selkirk; lot 59 ($30,000-50,000), Ansel Adams's Winter Sunrise, the Sierra Nevada, from Lone Pine; lot 112 ($100,000-150,000), Steichen's Portrait of G.F. Watts; and lot 203 ($150,000-250,000), Irving Penn's Cuzco Children in a platinum print. If these lots had sold at the low estimates, Sotheby's would have been able to tack on another $2 million plus to its totals.

The Sotheby's pr machine had Denise Bethel, who--as noted above--was actually absent for this sale, couch her remarks about the Sotheby's auction more conservatively than Christie's expert: "Given the current uncertainty in the financial markets, we are more than gratified by these results." As well they should be.

Over at Phillips, it just seemed to be a little more exciting, and, while I do not like their auctioneer (he rarely announced buy-ins or passes, as he is legally required to do so in New York State), he did drive the energy level up. Of course, having a lot of commission, phone and audience participation helped. The auction here sold $2,345,625 and had a sell-through rate that was 70%, which is quite good for this house in any market.

As I noted earlier, all of the Robert Mapplethorpe images of Lisa Lyon (from the model's own personal collection given to her by the photographer) sold well here. Only three out of the 15 lots sold under the low estimate--and two just barely. Some soared well over even the high estimate, including one that "fetched the second-highest price for a Lisa Lyon photograph", according to Phillips's Charlie Scheips. Scheips wrote a fine essay to introduce the pieces. He had interviewed Lyon for the essay and told me how emotional she was and how difficult it was for her to sell the pieces now. Her personal connection to the photographer was a strong one. Here was also another example of a key trend in contemporary art: two art forms mixing to create a greater gestalt--Mapplethorpe's photography and Lyon's body sculpture/performance art.

The top two spots in this sale were for more modest items: Peter Beard's Lolindo Lion Charge at $86,500, which went to a phone bidder; and tied for second were Cindy Sherman's Untitled #106, which sold for a record (for this image) of $62,500, and Irving Penn's Two Guedras, Morocco, which sold for the same $62,500. All prices included the buyers' premiums.

But there were some buy-ins of note here too, despite their much lower reserves, including: lot 9 (estimated at $60,000-90,000), Edward Steichen's Triumph of the Egg (but in a mediocre print); lot 15 ($60,000-80,000), Edward Weston's Nude on Sand, Oceano (in a creased and damaged print); lot 23 ($20,000-30,000), Horst's Calla Lily in a late printed platinum; lot 92 ($30,000-50,000), Irving Penn's Cuzco Family, Peru, Christmas; lot 95 Penn's Three Dahomey Girls ($30,000-50,000); several Peter Beard's including lot 101 ($25,000-35,000), Beard's Rungstedlundj Wamba Doorway, and lot 202 ($22,000-28,000), Elephant Reaching for the Last Branch on a Tree; lot 149, the cover lot ($120,000-180,000), Helmut Newton's large Charlotte Rampling at the Hotel Nord Pinus II, Arles; lot 165 ($25,000-35,000), Steven Klein's Case Study #13 no.13 (just lucky, I guess); lot 170 ($20,000-30,000), David Lachapelle's I Buy Big Car for Shopping; three out of four Larry Sultan lots (estimated variously $7,000-25,000); lot 185, the back cover lot ($70,000-90,000), Thomas Ruff's Substrat 7 III; and Wang Qingsong's two big prints, lot 195 ($25,000-35,000) and 196 ($15,000-20,000), which Phillips was apparently selling directly from the artist--or rather, not selling.

Bloomsbury had its first New York City auction on Friday. Its offices are just around the corner from Christie's. The material here wasn't the most exciting that I have seen, but then it wasn't terrible for a first outing. The house sold just about 52% of its lots and totaled about $710,000.

The top lot of the sale was lot 21, Helmut Newton's Saddle 1 (just another example of outrageous sexism from this good, but crass commercial photographer). Estimated at $60,000-80,000, the image sold for an astounding $102,000 with Bloomsbury's more reasonable buyers' premium of 20%. The number two selling image here was the cover image, Ruud van Empel's World #7, which brought $42,000, which was the low estimate plus the buyer's commission.

There were some big, but expected, buy-ins here, including the Russian album consigned by dealer G. Ray Hawkins, which had a ridiculous estimate of $800,000-1,200,000. Other big unsold lots included: lot 16 (estimated at $30,000-40,000), Sally Mann's Deep South #7 (two of these also went unsold at Phillips); and lot 100 ($40,000-60,000), Marcel Monnier's Mission du Capitaine Binger (overpriced).

Just one further piece of advice: my mentor in all this is not the Gagosians of the world but that cautious and sly old fox, Warren Buffet. He had some very interesting things to say in a very recent New York Times opinion piece that can easily be applied to today's photography art market (and remember photographs have the added advantage of being a hard asset that appreciates without the possibility of disappearing and that also look pretty good on the wall):

"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation's many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

"Today people who hold cash equivalents feel comfortable. They shouldn't. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts. Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky's advice: 'I skate to where the puck is going to be, not to where it has been.'"

He is also voting for Barack Obama.