Friday, June 10, 2016

"The new approach reduces the risk that Sotheby’s ends up with too much artwork in its inventory -- a concern particularly in a slowing market." (UPDATED 2X)

Bloomberg reports that the auction houses are now paying fixed fees to third-party guarantors. The Art Market Monitor calls the story "laughable nonsense":  "The guarantee is a kind of loan and the guarantor deserves to be paid interest for making it."

UPDATE:  Felix Salmon:  "This is not manipulation, it’s transparency, and a welcome development."

UPDATE 2:  Tim Schneider:  "[The Art Market Monitor] argues—convincingly, I think—that ... critics are intentionally miscasting these arrangements as something more devious than what they are: fully disclosed insurance policies against a piece going unsold at auction ...."