Hold your breath….and the winner is: The Duopoly. It really is a “can’t miss”, as Sotheby’s and Christie’s are in such a dominant position in the industry that they should and could adapt to the legislation without much of problem. You probably wouldn’t even notice the reserve is disclosed, and wouldn’t care if you were a buyer. The first thing this legislation can accomplish to the benefit of the auctions is eliminate any conflict of interest in their biggest transactions, beside the deception.
If I can do the arithmetic correctly, when they have an ownership interest in high value auction lots, it can bring a lot more income than just taking consignments on lower value items. The duopoly understands this by their recent acquisitions of dealers with specializations in the field of art and Sotheby’s stated goal of eliminating lower valued lots. They know and are well prepared to weather the potential change possibly caused by this legislation. Beside, opening up the secretive reserve can benefit their auction productivity too. After all it’s still about the merchandise, and nobody can match the duopoly’s PR skills and good will to draw a crowd of willing buyers. Sellers, your only fear is fear itself (sound familiar). If you don’t bring the right goods to market, nobody will be interested, so why try to manipulate the market with deception; that’s why goods ARE bought in.
Auctioneers are not deceptive people; they are just doing business “as usual” because nothing has tested their limits. They are great at what they do, and have raised the public’s awareness of what valuable things are lurking in the closet, so has the PBS Roadshow. Auctioneers can use the internet, and not just a showroom to disseminate their consigned goods. The seller has never before, in the history of auctioneering, had such available resources at their disposal. Who can lose?
To be quite honest, I don’t see some sort of sea-change in dealers ever becoming any kind of challenge to the auction industry. It just requires too much committed capital among too many dealers to cover so many fields that only independent auctions and the duopoly specifically can cover. But invested capital deserves the highest profit. Auctioneers, as well as dealers and collectors know that should be the case. Everyone will be able to compete on a level playing field to sell. Pricing will be transparent, and it may well even give consigners an alternative to getting a better price by not being held to the auctioneer’s methods, which might not get them the best selling price.
This brings me to the point of who should really benefit from this legislation; buyers and sellers, dealers and auctioneers, collectors and museums, the credibility of the decorative and fine arts industry. I don’t thing any legislation or government intervention should tilt toward a buyer or seller in a manner that favors either. Pubic policy should promote equilibrium in a marketplace that can allow benefits to all participants. Now, if I wasn’t always investing back in my own inventory, I would think about Sotheby’s stock… (It’s cheap, and a winner!!)