$179m Picasso record
May 13 2015
Video: Christie's
Christie's have set a new world record for a work of art sold at auction: $179.3m for Picasso's Women of Algiers. More here at the BBC. I was asked to comment by a few news outlets, whom I suspect were looking for a 'it's an outrageous price' sort of line. But a market's a market, and if more than one person wanted to bid on the painting, so be it. It's a fair price, for an important picture.
The question of who bought it, however, is interesting. Especially if it was the guarantor. The picture, as stated in the catalogue, was a guaranteed lot:
On occasion, Christie's has a direct financial interest in lots consigned for sale which may include guaranteeing a minimum price or making an advance to the consignor that is secured solely by consigned property. This is such a lot. This indicates both in cases where Christie's holds the financial interest on its own, and in cases where Christie's has financed all or a part of such interest through a third party. Such third parties generally benefit financially if a guaranteed lot is sold successfully and may incur a loss if the sale is not successful.
So it's not entirely clear here if Christie's guaranteed the lot solely with its own cash, or in partnership with a third party. Marion Maneker of the Art Market Monitor has this excellent overview of how Christie's are using guarantees to pretty much knock Sotheby's (and other dealers) out of the market. It seems to be working, so far, but of course is a risky strategy.
But regular readers will know that I've previously focused on just what these guarantees mean (here, for example). If a third party guarantor bought the Picasso, then are we entitled to wonder if the picture really did sell for $179.3m? The way Christie's guarantee system works, some guarantors are not only able to bid on their own work, but are entitled to a fee (or effectively a discount) depending on what the picture makes. So it's possible that the eventual sum that the buyer (if it was a guarantor) pays to Christie's will not actually be $179.3m. Of course, the fee or discount will be sizeable, but perhaps not in relative terms. In other words, someone somewhere still paid an extraordinary price for a Picasso this week.
