Peter Wilson, Sotheby’s Maestro Coverup

In reading the Sotheby’s published commentaries of the life and career of Peter Wilson (Sotheby’s Maestro), there is no denying his creativity and methodology to change an industry.  It was also the start of a time with endless possibilities for a stodgy way of doing business.  The Post-World War II landscape of Europe vs America for taste and money, was wiped clean. His opportunities were in delivering a better product, in a better way with a good bit of PR, which never hurt.

 With all the accolades and anecdotes about his life by the many colleagues and professional acquaintance I found it stunning that no one mentioned his role in the implementation of the buyer’s premium in the mid-1970s.  With all the showmanship attributed to his demeanor and control of an auction room, it all came down to money, and Sotheby’s not going broke or be overextended.  It seemed that he had no shame spending money to do what he wanted. However, Peter Wilson was complicit as anybody in the premium’s creation and operation, having a willing partner with their competitor,  Christie’s.  Why wasn’t this titanic sea change in the auction revenue stream commented and recognize as an achievement in any of these commentaries?

 The buyer’s premium was created to separate the dealers from the retail trade and it has worked magnificently.  It had a build in price increase mechanism that worked flawlessly for over 40 years.  It became the auction industry standard of non-negotiable revenue paid by a buyer, and today, auctioneers wouldn’t have it any other way. Honestly, the reason I bought the book was to learn more about the intrigue and thinking of when the premium was first implemented in London.  From my perspective, the best version of the whole episode was from an incredible account by Peter Spira, in his insightful autobiography, Ladders and Snakes.  As the Chief Financial Officer for Sotheby’s in London, he was careful not to implicate his boss in any collusion with Christie’s; not so for Mr. Taubman unfortunately.

 As an anecdote to the book, I would like to give my one and only meeting of Mr. Wilson.  It must have been in the late 70’s and we were just starting to establish a relationship with Sotheby’s through Robert Woolley, who was the head of Sotheby’s decorative arts division in New York.  Robert was enamored by Newel’s immense size, quality, and diversity of decorative arts and he knew it might be something that Wilson should keep on his radar. I believe Robert also brought Gerald Bland who ran the English department too.  As Wilson walked around our warehouse he remarked, “how did all this incredible stuff end up in New York.”  One piece in particular that caught his attention was a chaise in the form of a crocodile that was vintage Brighton Pavilion; his eyes lit up.  I got the sense that he loved nothing more than to be in his element, decorative and fine arts items.

 To bring the Peter Wilson story to a close, Sotheby’s has continued to advance and reshape the auction house role. Today, irrevocable bidding would be like introducing a secret reserve price.  In the end, the book is very entertaining and a last gasp of how the industry operated, with only a telephone or face to face.  The Internet has now taken on a dominant role as pricing continues to get more transparent.  How things were done, with a purpose, and where they morph has and will kept this industry evolving quite dramatically. In fact, Sotheby’s recently announced that they were getting rid of the buyer’s premium for online sale only; what comes around goes around!

The Art and Antiques Fair, Little Has Changed

It was enlightening to read a review of the latest version of the “venerable art fair La Biennale Paris.” In all fairness, I’ve never been to it, but I can only imagine the setting and the aura of walking down the aisles of such an austere event. An article about the fair was written by Ted Loos in the New York Times which also referenced antiques dealers as “now been discarded, least it sound musty and fusty”. Yes, I can agree, but the show must go on and filling booths and attracting fair goers is still the end game.

It’s been a fascinating last decade and a half for antiques dealers, but not so much for the art fair format. The Biennale use to be known as the Biennale des Antiquaires. The antiques dealer of the “musty and fusty” type is long gone, as the effects of style and taste changes, and competition created by the internet have altered the relationship between buyers and sellers in the industry. Art and antiques shows have experienced almost imperceptible variations in form and function. Jewelry and art now dominate the standard booths that use to exhibit 18th and 19th Century decorative arts; contemporary designs draw more interest than the traditional period forms. The events at the marque locations such as the Park Avenue New York Armory, Grosvenor House, Biennale, or Maastricht enjoy the same consistency and purpose as a Triple Pier Show or Brimfield. The show format is all about dealers in large numbers showing a limited amount of their individual inventories at a specifically timed event.

Constant pressures on art and antiques shows are related to the financial overhead and the cost of mounting a fair against the pool of dealers who look to the format to survive. The ultimate success of shows is driven by attendance and sales. If dealers sell and there is growth in gate turnout then the industry can use the results a barometer of the present market. But with the many competitive shows vying for a limited number of dealers, how can you really tell where the market is going?

Shows of the upper strata tend to push the social scene as much as the business at hand, so add the “glitz” factor into the hype. That’s not the formula for attracting a younger, affluent market of consumers, but it’s a tried and true format that is etched in the calendar of social events. Other more mundane shows attract the casual collector who is entertained by the diversity of works to be seen and opportunities to buy.

So now the fall season is upon us and the fair schedule is in place. The likelihood of who exhibits and who attends to look, buy, or be seen hasn’t really changed. You can’t shop the show on the internet like you can an auction catalogue or a dealer web site. If you don’t go the show it’s like missing a baseball game, the experience has moved on to the next game/fair. In baseball, the players on the teams change over the years and rules get modified, but the format is still the same. For fair attendees, dealer participants change as rookies replace veterans. These are incremental changes but the structure and purpose is consistent. Unless there is some new wrinkle in the format, the fair’s predictable process and presentation will always limit its appeal.

Remember The Buyer’s Premium

I guess if you live long enough you can see everything.  I believe I have witnessed in my career in the art and antiques industry the most seminal decision by an auctioneer to voluntarily forgo the buyer’s premium.  Sotheby’s, you not only see the handwriting on the wall, but now realize new potential in how the market can work.  Offering no buyer’s premium to online sales only, is the most significant auction method change since it was first introduced in the mid 1970s.

In the press release, Sotheby’s acknowledged the economics of the decision to test the waters where there is least resistance and the greatest pool of buyer.  Presently, this is not the marketplace for million dollar works of art, those buyer’s premiums are sacrosanct for the milking of billionaires in the live action dramas of the public performance sale.  Cracking the complete abandonment of the buyer’s premium as opposed to reducing it represents a new business model.  Sotheby’s is developing a prototype that relies on the more traditional seller’s commission.

The implications of this are intriguing because their present line up of online only auctions includes Contemporary Art, jewelry and watches, prints and Old Masters.  Where’s the decorative arts?  This is my immediate question as to which areas Sotheby’s sees the potential markets.  In my experience, the buyer’s premium had the most devastating on furniture and decorative arts dealers, who are practically non-existent at the higher end. However, if their little experiment starts to win over consignments and costs are contained with the technology, Sotheby’s could create a competitive ripple effect on buying at auction.

This brings me to the present dealer fee (commission) that is imposed by 1stdibs.  Pressure to create revenue from the seller is the traditional method for most transactions.  If auctioneers like Sotheby’s attempt to rely on seller commissions only, as in their proposed online sales, then 1stdibs is their template for this.  1stdibs, through its technology operates world-wide and sells without ever owning an item.  Buyer’s pay nothing, the sellers (like myself) pay it all.

While 1stdibs is still searching for a healthy bottom line, Sotheby’s makes an enormous profit.  And if the “competition” gets wind of what is going on, Christie’s will have to have an answer (usually match the latest salvo).  What is very interesting in todays present online auction process is the standardization of the present buyer’s premium and extra fees for using online auction services like Invaluable and Live Auctioneer.

It’s an exciting time to be in this business, just when I thought it was never going to improve.  Taste and money are always changing and evolving into different forms and styles.  Great inventory opportunities abound for both dealers, auctioneers, and retail purchasers.  The selections have never been so plentiful, except at the very top, where no one wants to be except perhaps a museum or billionaires. The end of the buyer’s premium is like the fall of Communism; it had its run but it was always flawed.