A nthony Calnek (AC): Welcome to this special roundtable discussion, recorded at Sotheby’s offices in New York and London in September, at the start of the autumn season. We have also added in a few observations in November following the New York marquee auctions.
Joining us from London is Anders Petterson, founder of ArtTactic, the research firm that is pioneering the use of data to help make sense of the art market. In New York, we have the collective wisdom of three of Sotheby’s most senior executives, who live and breathe the $1m+ market. Brooke Lampley is global chairman and head of global fine art; Mari-Claudia Jiménez is chairman, president, Americas and head of global business development, and David Schrader is chairman, global head of private sales. Every day, Brooke, Mari-Claudia and David work with leading collectors involved in this fascinating market, on both the buying and selling sides.
Let’s start our conversation with Anders, who will give us a snapshot of current market conditions. Note that all auction sales data is drawn from the three major auction houses: Sotheby’s, Christie’s and Phillips. Private sales data and bidder information comes only from Sotheby’s.
Anders Petterson (AP): First of all, economic conditions have continued to be challenging. Inflation has remained stubbornly high, as have interest rates. This has had a direct impact on the global art market, and especially the $1m+ market, which saw a 29.5% decrease in auction sales in the first half of this year. But the picture is quite nuanced: most of the decline came at the top end of the market, made up of lots selling for more than $20m. This was largely because fewer big single-owner collections – which often have the most valuable lots – came to auction. Meanwhile, the $1m to $5m market was roughly even compared to the same period in 2022, and the $5m to $10m market actually saw an 18% increase.
In the second half of 2023, the top end bounced back to a significant extent, with many single-owner collections coming to market. While we are still not at the levels seen in the peak years of 2021 and 2022, the bellwether New York marquee auctions at Sotheby’s, Christie’s and Phillips came in 29.8% higher than the May round. In total, they hammered at $1.56 billion, against a low estimate of $1.51 billion. Furthermore, 22 lots hammered above $20 million, compared to just 13 in May.
AC: Let’s continue on that final point. Are we seeing trophy lots return as a major force at auction?
Mari-Claudia Jiménez (MCJ): Absolutely. We keep close track of the most significant collections globally, and many will come to auction in the next few years. I expect that mega-collections – those worth $500m and above – will start to become the norm. That’s because the generation that collected at that level, often known as the “Silent Generation”, were born before the Second World War and are now passing. The Emily Fisher Landau Collection, which came to auction at Sotheby’s in November, was just one of many in the pipeline.
“Gen X collectors are overtaking Baby Boomers as the most active bidders in the $1m+ market”
AC: Speaking of generational change Anders, you found that bidder demographics are changing rapidly?
AP: Yes, Sotheby’s bidder information shows Gen X collectors are overtaking Baby Boomers as the most active bidders in the $1m+ market, and they were the most important demographic in the first half of 2023. They account for 40% of bidders, up from 36% in 2022.
Brooke Lampley (BL): People have been reluctant to believe that younger buyers have become such a force, but their spending power is really significant. The $1m to $10m range is the entry level for a lot of Gen X buyers. It can be their first port of call, and then many escalate over time to higher and higher spending levels.
David Schrader (DS): There’s just a greater comfort in that price zone than there used to be.
AC: David, what is happening in the private sales market relative to auctions?
DS: We’ve seen a good amount of strength in the market below $10m. I think there would be quite a lot of appetite for the $50m+ market – which is where you find the incredibly rare masterpieces – if we could locate the inventory. Most very valuable artworks are coming to auction rather than being sold privately.
AC: Why is that?
BL: We give collectors multiple options. As a seller, if you feel that there is a really deep market for an artist at a particular moment, you have a compelling case to choose the auction room. On the other hand, private sales can perform better for particular artists when there is a more selective or discriminating market. Sometimes you can achieve a premium for a work with a smaller connoisseurial group of buyers, in which case private sales are attractive.
MCJ: Typically, the big estates I was talking about almost always sell at auction because of fiduciary and tax obligations. That said, there are certain circumstances in which they will go for private sales. For example, if there’s a “blockage” in the market because of multiple examples of similar works by the same artist, or a collection with so much depth in a particular artist or period, that it can’t be absorbed all at once.
DS: Totally agree.
AC: Anders, was the drop in auction sales at the high end felt evenly across the board during H1?
AP: When we look at the collecting categories they all went down, with one exception: Old Masters saw an increase of 26% between the first half of 2022 and the first half of 2023.
AC: Well, I can’t help but mention, Mari-Claudia, that when we did our panel in New York in June on the $1m+ market and you were asked to look into your crystal ball, you came out quite presciently with a prediction that Old Masters would be the sector of the market to watch. It seems you’ve quickly been vindicated?
MCJ: Obviously my psychic abilities are really impressive! But seriously, if you compare Old Masters to Contemporary or Impressionism, these works seem relatively inexpensive. So I think people are looking at Old Masters as a value proposition. For less than $5m you can acquire a great work that is 500 years old, while in the Contemporary market you often have to pay much more for something painted in the past decade.
DS: Brooke, when we spoke in London in March you observed that collectors are pretty “category agnostic” today. They really want the best in class, whether that’s an Old Master painting, a watch, a car, a Jasper Johns or a Picasso. The category lines are starting to blur and fade out.
AC: Let’s turn to that elite group of artists who power the $1m+ market. This edition of our report provides an in-depth analysis of the 50 artists who are the dominant figures. As you’d expect, it includes many of the most established artists in the canon, from Picasso, Monet and Magritte to Andy Warhol and Gerhard Richter. But it also features a strong group of women artists, such as Yayoi Kusama, Helen Frankenthaler and Joan Mitchell, younger painters like Adrian Ghenie and Cecily Brown, and Chinese artists, including Zhang Daqian and Liu Ye. Anders, how did you decide which artists made the cut?
AP: We spent a lot of time thinking about what it means to “power” the market, and we arrived at a ranking that encompasses five dimensions. The most obvious is total sales value, but we also thought a sustained auction presence over a five-year period was critical, so identified those artists who appear most frequently at the highest level of the market, giving it liquidity. We also counted the average price realised, the confidence of bidders and market momentum.
DS: We’ve seen a flight of collectors out of speculative markets and into more established areas. In a time of uncertainty, which we’ve been in for almost a year, there is a turn to quality and blue-chip artists. These markets tend to have the greatest liquidity, geographical diversification and number of bidders.
AC: Panellists, how do you think collectors who are already trading in the $1m+ market, or are considering entering it, can use this data?
MCJ: We all know that the art market has never been as transparent as the financial markets, so any information we can give our clients in terms of trends, analysis and insight will allow them to make more thoughtful and educated decisions about their purchases, whether they see them as an investment or are pursuing a passion.
AC: One of the most exciting things about this report is that it includes a wealth of data from Sotheby’s about bidders that has never been shared publicly at this granular level. We are supplying easy-to-read charts based on this data for 50 artists.
BL: The data in the report shows that our collectors, even the youngest ones, are interested in the entire span of history. Education is such an important factor in the art market, and people are learning about art history in many different ways today. And they are experiencing trends that incorporate different artists from throughout history.
AC: Brooke, on the subject of younger collectors, what is bringing them into the art market?
BL: The practice of collecting art is more visible today than ever before. As Mari-Claudia pointed out, there were many people in the Silent Generation who formed significant collections, but it wasn’t as widespread a phenomenon. Fifty years ago there weren’t art fairs of the kind that are so common today. Private collectors generally did not go to auctions: the sales were frequented by the trade, who acquired works that they sold on to collectors. I think there has been a great effort to make people feel included in the art world and to make it accessible, both by galleries and auction houses.
DS: If you go back to auctions just 10 years ago, there was no western art being sold in Asia, or vice-versa, and very little European art outside of works by established masters sold in America. That has changed, and now auctions in all locations have much greater representation of artists from around the world.
BL: People are also motivated to celebrate, support and endorse the art of their time and artists they believe are culturally significant. For younger generations, putting your money where your mouth is can be extremely important. Their auction purchases are saying: “I don’t just believe in these politics, I want to actively support them.” For example, when a work by Kerry James Marshall was bought for $21m in 2018, it set an auction record for a work by a living African American artist. I think the buyer, who is a very well-known cultural figure, intended the purchase to be seen as a political statement that said: “This work is worth a lot, and it will continue to be worth a lot. I believe in it.”
When people ask me if the rise in the value of works by women artists is a bubble that is about to pop, I always look at them and say: “Do you think they have achieved equity?” I don’t. I think that’s true for an increasing number of people, who are collecting as a way to express their passion for causes and social issues. Your passion doesn’t just have to be for the object, but for what it stands for.
DS: Another consideration is that many of these top artists have wider cultural significance: think of Kusama’s art appearing on LVMH bags, or the KAWS collection for Uniqlo. Artists have gone from the museum directly to the heart of popular culture.
MCJ: People buy what resonates with them.
AC: For decades the art market was famously resistant to the digital revolution. Now all auction houses and galleries have apps and lots of digital content, but it was really through the livestream auctions we implemented during the pandemic that we were able to reach truly massive audiences. I wonder if you think that digital access is one of the reasons why we’re seeing younger people entering the market?
MCJ: There’s no question that digitisation has had a huge democratising effect. In the past, younger people were often too intimidated to cross the threshold into Sotheby’s. They are now coming in largely through digital channels, and the increased focus on luxury categories has also been a huge source of new, younger clients. Auctions that are more celebrity or pop culture-focused, such as our Freddie Mercury sale, have had a similar effect.
AC: This report is filled with all sorts of useful data for collectors, but we all know that is only part of the story. Let’s talk for a minute about the importance of expertise in filling out our understanding of artists. Brooke, what exactly do we mean by “expertise”?
BL: We mean both a deep knowledge of the artist’s work, generally from an art historical perspective, as well as market knowledge. Within each artist’s market we can begin to understand how different types of work perform, and who the collecting audience is for each.
DS: Working in a global auction house like Sotheby’s gives us an amazing opportunity to understand the market in a unique and deep way. The sheer volume of works we see, the conversations with collectors we have and the works we price – we want our existing and future clients to benefit from all the expertise we accrue.
AC: Let’s wrap up with a look at the season.
BL: This fall we really leaned into the passion we have been seeing for collections that tell great stories about people’s experience with buying art, their proximity to artists, their education, and how the unique synergies and dialogues that they forge in their collections can be so inspiring to others.
The collection of Emily Fisher Landau, who died earlier this year at the age of 102, was of huge interest because she was a titan of museum patronage and really contributed to the vision of art history that we see in museums today. Over several decades, Fisher Landau put together a particularly inclusive and more equitable presentation of 20th-century art than many of her peers. She was collecting works by women and men in equal measure, so you don’t just have amazing works by Picasso, Warhol and Ruscha, you have Agnes Martin, Barbara Kruger, Nan Goldin and Ana Mendieta. It’s a vision of 20th-century art much different from the one we’ve seen many times before – one with a female twist. And it achieved amazing results.
When we present a powerful new perspective like Fisher Landau’s, collectors can learn a lot from it. I love to see them being inspired by the legacy of a great collector, and then go on to make new, different and bolder choices for themselves.
Next: Bidder analysis