New York: Contemporary Art

Make no mistake — the contemporary-art market is in the midst of a significant price correction. The default excuse for the failures at November’s evening sales is that estimates and guarantees negotiated in the summer might as well have been from another planet. Anticipating the newly cautious buyers, auction houses tried to offset losses on bets made earlier by pressuring new consignors to accept lowball reserves.

Sotheby’s led off on November 11 with an auction stuffed to the gills with material carrying guarantees. The session wasn’t exactly a bloodbath, but the house did take a financial drubbing, losing more than $25 million (the exact extent of the debacle will be known when the publicly traded company reports its fourth-quarter earnings later this month). The change in economic climate was evident in the uncharacteristically gracious, charm-school manner of the auctioneer, Tobias Meyer, who was more flexible than usual. Discarding his usual "Give me — !" refrain in favor of polite requests for "one more," Meyer navigated expertly through the minefield of overpriced lots.

The early part of the sale looked good. Alighiero e Boettis red embroidered-fabric world map Mettere al mondo, 1983 (est. $600-800,000), brought $866,500, and the San Francisco megacollector Donald Fisher paid $1,314,500 for Gerhard Richters 1991 Mirror Painting (Blood Red), in pigment on glass (est. $1.5-2 million). John Currins Lucas Cranach look-alike, Nice ’n Easy, 1999 (est. $3.5-4.5 million), set one of the three artist highs established that bumpy evening, going to an anonymous telephone bidder for $5,458,500. But the standout in the guarantee-free department was Yves Kleins grandly scaled relief painting Archisponge (RE 11), 1960 (unpublished estimate in the region of $25 million). The otherworldly work, done in the artist’s patented IKB shade of blue and encrusted with sponge coral and stones, fetched $21,362,500 from a telephone bidder, becoming the most expensive postwar work of the season.

The bittersweet sale of Philip Gustons Beggar’s Joy (est. $14-18 million) illustrated how guarantees — and the tangle of vested interests that come with them — distort the picture of the current market. The Abstract Expressionist masterpiece from the mid-1950s, distinguished by its ravishing palette of red, fleshy pink and smoldering grays exploding in densely layered brushstrokes, sold for a record $10,162,500 to the San Francisco art adviser Mary Zlot, who counts investment magnate and sfmoma patron George Roberts among her clients. Although the sum fetched represents a massive appreciation from the $1,707,500 that the painting’s consignor, the übercollector Donald Bryant, paid for it at Christie’s in 1996 and easily eclipsed Guston’s previous high of $7,296,000, it still fell far short of the overoptimistic estimate of $14 million to $18 million. Sotheby’s, which had guaranteed the work, lost millions by deciding to let it go at this comparatively low bargain price rather than keep it on its books. If the house really believed in its specialists’ valuation, it should have bought in the work and saved it for a better economic climate. But Sotheby’s, alas, was more concerned with its bottom line than with the artist’s reputation, which has now been clouded by the poor showing of this record-breaking work relative to its inflated estimate.

"I was disappointed the painting didn’t go much higher. I think it was just the accident of the financial situation," says Bryant.

Another accident victim was the guaranteed cover lot, Roy Lichtensteins problematic Half Face with Collar, 1963 (est. $15-20 million), from the collection of the famed dealer Gian Enzo Sperone. Strangely cropped, with the figure’s face cut off above the mouth, the painting died without a bid.

If the sale was a bust for the house and some sellers, it proved a romp for many buyers. Eli Broad was among the notable collectors who scooped up relative bargains. Broad nabbed four works at prices below their estimates: Jeff Koonss Wishing Well (est. $2.5-3.5 million), for $2,154,500, Ed Ruschas Desire, 1969 (est. $4-6 million), for $2,434,500, Robert Rauschenbergs little 1955 combine painting Bantam (est. $3-4 million) for $2,602,500 and, for $1,142,500, Donald Judds Untitled (90-14 Bernstein), 1990 (est. $2-3 million).

Seasoned American connoisseurs who had been priced out of the boom by a new breed of buyers reappeared, snatching up Ab-Ex and Pop works. A telephone bidder, for instance, paid $4,114,500 for Tom Wesselmanns Great American Nude #2, 1961 (est. $6-8 million), an oil and collage emblazoned with a poster image of President Kennedy and an embroidered Old Glory, which was consigned without a guarantee from the Harry N. Abrams Family Collection and underbid by the father and son team of New York’s Maxwell Davidson, among others.

"The market exists," says auctioneer Meyer, "and when the price was right for great objects, the audience responded and bought them."

That observation still held true at the Christie’s evening sale on November 12, which repeated its archrival’s roller-coaster ride of solid sums for outstanding works and outright rejection of overpriced material. The house had guaranteed close to half the lots in the sale. The unencumbered ones harvested huge prices. Joseph Cornells ethereal 1943 masterpiece Pharmacy (est. $1.5-2 million), a wooden box filled with glass vials containing a cornucopia of magical found objects, from seashells and fruit pits to a butterfly and a cork, sold for a record $3,778,500, for instance. And intense competition — which included bursts of bidding from the New York dealer Robert Mnuchin — greeted Yayoi Kusamas provocatively minimal No. 2, 1959 (est. $2.5-3.5 million), an abstraction composed of an obsessive latticework of tiny dots, which Ségalot bought for a record-shattering $5,794,500, making it the costliest work by a living woman artist. Like the high-yielding Guston at Sotheby’s the previous evening, the Kusama had been consigned by Bryant, but its original owner was the sculptor Donald Judd, a provenance that added gravitas to the work.

It is doubtful that the provenance of the sale’s cover lot — from the collection of the Metallica drummer Lars Ulrich — added much to its allure. Jean-Michel Basquiats pugnacious Untitled (Boxer), 1982 (unpublished estimate in the region of $12 million), reached $13,522,500 largely because of its scale (76 by 94 inches) and sheer wall power.

Christie’s had good fortune with the large, guaranteed 1986 Gerhard Richter work, Abstraktes Bild (710) (unpublished estimate in the region of $12 million), which sold for the auction’s top price, $14,866,500. But the house lost its bet on Brice Mardens Attendant 5, 1996-99 (est. $10-15 million). The rare-to-market abstraction in looping, late-de Kooning-like ribbons, was bought in at $7.5 million, a high-profile blow to the artist’s name.

The evening was kinder to some reputations than others. Those of late greats like Alexander Calder soared on the wings of exceptional prices, but the fortunes of two major living American artists barely held their ground as their works turned in mediocre performances. Koonss life-size 1988 sculpture Buster Keaton (est. $5-7 million) fetched just $4,338,500 from a telephone bidder, and Richard Princes 2003 Lake Resort Nurse (est. $5-7 million) brought a mere $3,330,500 from the Gagosian director Victoria Gelfand.

What would have seemed inconceivable just months earlier became stark reality in a changed market, as Francis Bacons Study for Self-Portrait, 1964 (unpublished estimate in the region of $40 million), flamed out at $27.5 million without attracting a single bid. "That sums up the market, right there," says the New York dealer Rachel Mauro. "It goes to show you there’s a real threshold out there."

Phillips de Pury & Companys 50-minute evening auction on November 13 put a sobering cap on the week, as the house struggled to unload mostly unexceptional property priced in the low to mid six figures. Uncertainty in the market or a lack of confidence in Phillips’s ability to sell led to a handful of last-minute withdrawals of high-value lots — including Prince’s 1999 Untitled (Tire Planter) (est. $120-180,000) and Currin’s 1993 Standing Nude (est. $500-700,000) — making the session seem even more mundane and puny. The house did manage to find a buyer for its cover lot, Donald Judd’s 10-part stack Untitled (77/23-Bernstein), 1977 (est. $4-6 million), which a telephone bidder purchased for $3,218,500 — an honest price, since the work wasn’t guaranteed and the consignor was motivated to accept a discounted reserve.

"In hindsight," says the Phillips director Michael McGinnis, "not giving consignors guarantees was the right strategy in this economy. We have to tighten supply and get tough on low estimates and reserves. If we do all that, we’ll have a successful spring."

"New York: Contemporary Art" originally appeared in the January 2009 issue of Art+Auction. For a complete list of articles from this issue available on ARTINFO, see Art+Auction's January 2009 Table of Contents.