Sotheby's Raises Commissions to Buyers as Auction Sales Boom
2007-01-18 12:53 (New York)


By Lindsay Pollock
     Jan. 18 (Bloomberg) -- Sotheby's has raised the commission
charged to buyers on big-ticket auction purchases worldwide.
     Sotheby's informed employees by e-mail on Jan. 12 and has
posted the fee increase on its Web site under ``Buyer's
Premium.''
     Previously the buyer's commission was 20 percent on the
first $200,000 bid at auction, and 12 percent on the balance of
the total bid. Now buyers will be charged 20 percent on the
first $500,000, or an additional $24,000, and 12 percent on the
balance.
     ``While this change will only impact a very small
percentage of the lots we sell worldwide,'' wrote William
Ruprecht, Sotheby's chief executive officer, ``it will further
strengthen our business and our ability to compete in this
challenging marketplace.''
     In the wake of record auction sales at Sotheby's and
archrival Christie's, charging collectors and dealers more for
their purchases is a way to increase profitability.
     The last time Sotheby's increased its buyer's commission
was in January 2005. The auction house then raised fees from 20
percent on the first $100,000 to 20 percent on the first
$200,000. Within weeks Christie's raised its commission to match
Sotheby's.
     This time around, Christie's hasn't announced any plans to
raise its fees. ``As the world's leading art business, we will
make our own decision about our own rates based on our own
assessment of our business needs,'' Bendetta Roux, a company
spokeswoman, said in a statement.

                       Hungry Collectors

     In a booming art market, where important artworks are in
scarce supply and collectors' appetites are strong, the auction
houses are frequently forced to charge little or no seller's
commission in order to win consignments. Increasing fees for
buyers is one way to compensate.
     Art consultants and collectors didn't seem fazed by the
news.
     ``I don't think it's going to keep people away from the
auction market,'' said Miami-based art consultant Lisa Austin.
``You'll hear some squawking, but there's a group of collectors
that buy exclusively at auction. I think for them they are
spending such immense sums that this won't factor.''
     New York-based dealer and collector Eric Steiner said he
wasn't concerned. ``It's just a matter of adjusting how much
you'll bid.''

--Editors: Schatz (jjb).

Story illustration: For more information on the auctions,
visit http://www.christies.com/ and http://sothebys.com/. For
more cultural news from Bloomberg, see {MUSE <GO>}.

To contact the writer of this story:
Lindsay Pollock at [email protected]

To contact the editor responsible for this story:
Manuela Hoelterhoff in New York at +1-212-617-3486 or
[email protected].

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CHRS LN <Equity> CN

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