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May 30, 2008

Christies and Sotheby's are INCREASING the Buyers Premiums!!

YES..my little MAO-ettes The greedy "nice people" over at ..Christies and Sotheby's are both raising their already outrageous auction buyers premiums!

Greedy_pig_auction_houses_at_trough As if the last round of rate increases were not stupid enough... ?

This seems totally crazy to MAO, given we're in the middle of a recession with Art fairs, and art dealers shutting down everywhere .. 

But, we guess the auction houses are feeling overly secure enough to start ripping off charging their clients even more !!! 

As we say on wall street,

Bulls make money, bears can make money, but pigs get slaughtered.

So here's the bad news..

Effective 2 June 2008

Country & Saleroom Location(s) Premium Threshold
United States Los Angeles
New York

Wine Sales only
25.0%
20.0%
12.0%
20.0%
Up to $50,000
$50,001 - $1,000,000
$1,000,001 and above
No threshold

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I think auction houses might get a short term boost as more sellers are willing to part with things. You always hear that the issue is lack of great product comming up for auction.

One other off the subject question I have is this... savings rates, debt levels, investment flows are piling wealth into non western markets, which makes one wonder if the western art's position at the top of the art market will continue.

Its no secret that the auction houses are opportunistic and greedy so I am not surprised in the least that they are upping their fees. Forget sustainability, the $$ of the here and now is all the auction houses are interested in

Nicholas Forrest
http://www.artmarketblog.com

Recently submitted stuff to auction, one of which failed to sell the others lackluster ...although similar works sold for more than double the reserve 1 to 2 years prior. Lots of factors involved but I'm sure the massive premiums were a factor in this as well as the number of recent auctions that have had large amounts of buy ins.

I will definitely be paying more attention to reserves and my risk/cost if I consign stuff in the future and you better believe that I will be bidding slightly less than I would now than when premiums were in the 15-20% range just a few years back.

It's going to hurt the sellers and much worse it's going to hurt the artists (especially young artists) whose auctions showings will be weak and or deteriorate thanks to the endlessly increasing fees.

Do the math!

Secret Reserve = bid rigging
The ever RISING/non-negotiable buyer's premium = price fixing
Sotheby's + Christie's = Duopoly
Bid Rigging + price fixing + Duopoly = antitrust (as is The Sherman Antitrust Act)

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