The news in the trade has certainly been anything but robust for the image and financial prospects of the industry. However, there seems to be an evolutionary movement of who is willing to try to challenge the current form of that process with a new imaginative approach. Leigh Keno, who is known as a dealer in high end Americana has initiated an auction firm that “will have no estimates, no reserves”. Sounds compelling!
The press release as reported in trade magazines states that he is aiming for inventory between $100 and $5,000 of value, however I have no idea what kind of seller’s commission or buyer’s premium will be in effect. His business model is based on the supposition that he will offer anyone who wants to sell an object the choice to sell outright, consign for private sale, or consign to his public auction. In my mind that should cover all the options for the seller, but I’m sure the devil is in the details as to exactly what option is best for the seller or Keno as the buyer/consignee.
I hope Keno will be quite cognizant of avoiding conflicts of interest. With these 3 options, it could get a bit tricky. But for a buyer, it appears that one big sham in the auction process, the secret reserve, is clearly being eliminated which will make for a fairer playing field. This major impediment to the auction process could be predicated on Keno’s understanding that chandelier bidding and other deceptive and fraudulent methods are being reexamined not only by the failed New York State’s legislative initiative several years ago, but by the public too. Big industry changes can start with small, successful ideas.
However, getting the 800 pound gorilla, the Sotheby’s/Christie’s duopoly to entertain this innovative yet honest process seems highly unlikely. Their ingrained attitude of being in control of both the buyer and seller is too much to relinquish. After all, they build their franchises on fraud, deception, conflict or interests, and political connection. When they were able to enforce the guaranteed revenue stream of the buyer’s premium in the 1970s on top of a seller’s commission, all bets were off; they then could write their own new rules to the auction game.
Most auctioneers have tried to emulate the success of the duopoly’s methods, but many have also recently failed. Certainly both Sotheby’s and Christie’s are now a bit gun shy about offering guarantees. We have seen several other auctioneers attempt innovative methods like disclosing reserve prices before a sale (Heritage Galleries) and question the “agency” of an auctioneer’s conflict of interest in ownership (Bonham’s)( 11/29/07 blog).
There are now cracks in what was once an impenetrable way of auction thinking. The successful movement of this process toward an open, unencumbered format will give confidence to the operations of all participants in the trade, and most importantly, to the greater public at large.