When Cézanne’s Still Life With Curtain, Pitcher and Bowl of Fruit sold for $60.5 million to an anonymous buyer at Sotheby’s in May–the highest price ever paid for the artist’s work–it made news all over the world. But when casino mogul Steve Wynn sent his private jet from Las Vegas to New York to fetch the painting in late August, then hung it in his Bellagio Gallery of Fine Art on the Vegas strip, hardly anyone noticed.
According to Mr. Wynn, he was offered the painting months after the auction, a fact that raises questions about what really happened in the Sotheby’s salesroom on that May evening and whether or not the record-setting price was ever reached–or, if it was, whether Sotheby’s picked up part of the tab. And the Cézanne is not the only recent case of a cloudy high price for an artist’s work that is still on the books. Jean-Michel Basquiat’s Self-Portrait (1982), which was supposed to have sold last November at Christie’s for $3.3 million and set a new high price for the artist, was afterward discounted by the auction house for much less, according to well-placed sources.
Sales gone awry are the painful, dark secrets of auction houses. On a low level, they’re awkward: The sellers ultimately get the art back, the buyers who crap out go on the “no-bid” list, where they’re banned from bidding at that house or any house, since the auction firms share that kind of information. In the upper reaches of the market, it’s more awkward.
“It happens once a year with something big,” said one former auction house employee. The house can sue a winning bidder who backs out, which makes it look as if they don’t know how to run a credit check (which is supposed to prequalify a bidder). More often, they try to swing a deal. In 1989, Sotheby’s forced one bid-happy dealer to take a loan to make good on his purchases, which totaled more than $40 million. In 1997, the firm had another bidder who bit off more than he could chew and they tried to sell the work a few days after the auction to one of the other bidders.
“If the seller is a good client or has a contract for immediate payment [before getting paid by the buyer],” said the source, “the house has to eat it.”
“Auction houses don’t like to talk about these kinds of blips occurring,” said another source in the trade. “There’s a history of these from time immemorial.”
But here’s the rub: Prices reached at auction are never revised. Beyond being tools used to attract business, the record prices stand as the benchmarks of the artist’s value, what real estate brokers and art market traders call comparables–the values that they use to explain why someone should pay so much money for something.
With the current art market so hot–demand has far out paced the supply of exceptionally good works–the stakes have become much higher in every sale. New and younger buyers have been cropping up each season, flush with their latest dividends or options. Dealers and collectors alike have greeted ever-rising prices with glee; after all, their assets have just increased in value. And in attempts to keep pace, Christie’s and Sotheby’s are working furiously, even breaking into Internet auctions. But when auction sales are botched, inaccurate prices make the entire enterprise much less sharp and clear than the smack of an auctioneer’s gavel.
The Basquiat Self-Portrait dates from 1982, when the artist’s stylized, primitivist figures were still edgy and raw. A gnarled figure holds a crude arrow in his left hand, and few colors break the black-and-white monochrome. The Christie’s estimate was $400,000 to $600,000, but collectors and dealers felt it could easily bring $1 million. The then-standing record for a Basquiat was $596,500, paid in May 1998 for Unbreakable .
On the evening of the Nov. 12, 1998, auction, the overflowing crowd that had stuffed itself into the Park Avenue salesroom sat up straight for the Basquiat. Newsprint and real estate mogul Peter Brant dropped out of the bidding at $900,000, and by $1.6 million, the competition was between an anonymous Christie’s client on the phone and a man in an adjacent gallery, where the less prestigious overflow clients sit and watch the auction on a screen.
In a dizzying series of bids, the price jumped a slew of $50,000 steps, going straight from $1.75 million to $1.9 million, and then to $2 million. With the mystery man in the gallery bidding $2.1 million, the phone bidder lurched up to $2.5 million. “Three million in the gallery?” asked auctioneer Christopher Burge, eliciting laughter. “I’ll take 2.6.” Instead, he got $2.7 million from the man in the gallery.
The phone bidder upped the ante to $3 million. “All done in the gallery?” Mr. Burge asked, to which he got a reply from a Christie’s rep in the next room, “We’re thinking.” But it was done. The hammer came down at $3 million ($3.3 million with the auction house’s obligatory 10 percent thrown in), and the audience let out a series of whoops and whelps.
Within a day of the auction, the winning phone bidder was reported as Philip Niarchos, son of the late Greek shipping magnate, Stavros, who was also one of the great collectors of the century. And not long after that, Mr. Niarchos began to question his sanity, or at least that of the underbidder. According to a knowledgeable source, Mr. Niarchos refused to pay the $3.3 million, demanding proof that he had competed against a legitimate bidder–as his father had done at least once. (According to Art & Auction magazine, the underbidder was Bruce N. Whitman Jr., senior director of the little-known art investment enterprise, Passion of Art.) Unable to satisfy Mr. Niarchos that the buyer had the means to pay for the painting, said the source, Christie’s renegotiated the sale to Mr. Niarchos, for around $2 million.
After discussing the matter with others at the auction house, Christie’s spokesman Andrée Corroon couldn’t bring herself to say that the painting had sold for $3.3 million. “The painting is with the original bidder at the price he bid,” she said. Reminded that the final price was $3.3 millions he said, “I don’t have the results in front of me.”
The painting’s consignor was Paris dealer Marc Blondeau, who more than once had exhibited Self-Portrait . In a telephone interview, Mr. Blondeau declined to say whether he was the seller or an agent for the seller.
But on the subject of the final price, Mr. Blondeau commented, “What I can say is if there was confusion, it was resolved immediately. It is no longer an issue.”
Unlike the jazzy Basquiat, the Cézanne is a blue-chip work of wonderful rhythms and pairings in its composition. As of last May, the auction record for a Cézanne was $28.6 million, achieved by Sotheby’s in 1993. But privately, a few had sold in the $30 million to $40 million range, and in early 1997, Ronald Lauder, the chairman of Estée Lauder International, paid around $50 million for the artist’s Still Life, Flowered Curtain and Fruit (1900). With that sale, the bar was raised, and the auction houses were desperate to find another.
Sotheby’s wound up with the prize. In a consignment from the collection of the late Betsey Cushing Whitney came Cézanne’s Still Life With Curtain, Pitcher and Bowl of Fruit (1893-1894). The Whitney estate agreed to an alluring estimate of $25 million to $35 million, a lowball figure designed to get buyers interested in the painting.
At the Whitney sale at Sotheby’s on May 10, the bidding was as anguishing as the competition for the Basquiat had been mercurial. Sotheby’s chairman Diana D. Brooks was on the phone taking bids from Mirage Resorts chairman Stephen Wynn. (His identity wasn’t known at the time.)
Their competition was an anonymous client, also bidding by phone. Ms. Brooks cruised along with $1 million bids to $46 million, when Mr. Wynn hit the limit he’d set for himself before the auction. The auctioneer asked if Ms. Brooks would like another bid. She spoke into the phone and finally shook her head, No. A few moments later, Mr. Wynn had reversed his decision and pressed on to $54 million before quitting.
“I’m done,” Ms. brooks told the auctioneer, who quipped, “You said that before.” But she was out.
Immediately after the auction, Ms. Brooks said, “It was torture. It was $1-million-at-a-time torture.”
Yet, on Aug. 24, Mr. Wynn dispatched his private jet to New York to claim the Cézanne.
New York dealer William Acquavella, who has brokered purchases for Mr. Wynn and worked closely with Ms. Brooks, said Mr. Wynn was not the buyer at the auction. “He bought it from the person who bought it at Sotheby’s,” he said. “I arranged it.” He said he didn’t know why the original buyer was selling. “I didn’t ask questions–I just made the sale.”
Mr. Wynn told The Observer that he bought the Cézanne “in a private sale for an undisclosed price. That’s the sentence we all agreed to.” Getting a second crack at the painting, he said, “was really a shock–it just showed up! You gotta get lucky in life.”
Sotheby’s declined to comment on what happened with the auction buyer, but a source familiar with such matters said that most likely the winning bidder realized he’d gotten in over his head and wanted out.
Regarding canceled or renegotiated sales, one source in the auction trade said, “I think the public has a right to know about these things. They certainly hear enough about it when sales happen, and certainly not a whisper when sales are canceled.”
Six months after Basquiat’s Self-Portrait was recorded at $3.3 million, two of his other works were sold– Self-Portrait as a Heel, Part 2 (1982) brought $772,500 at Christie’s, and Grillo (1984) sold for $1.1 million at Sotheby’s–both above the artist’s high-water mark before the new record was set. Not long after those sales, Christie’s was involved in a private deal in which a Basquiat canvas changed hands for $1.5 million.
“I don’t buy the assumption that an anomalous price is necessarily going to pull up the price of everything else by an artist,” said Victor Wiener, executive director of the Appraisers Association of America. “But it’s very clear that auction houses have a burden of full disclosure. They have to disclose financial arrangements, they have to disclose reserves, they have to disclose ownership interests, they have to disclose when something doesn’t sell at auction. There should be reporting obligations” for recorded sales that develop problems, he said. “Otherwise, an appraiser in St. Louis is going to be operating under mistaken assumptions.”
In November, two more major Basquiat works– Revised Undiscovered Genius of the Mississippi Delta (1983) and Baptismal (1982)–are coming on the block, one at Christie’s and one at Sotheby’s, and both could easily slide past the $1 million mark if the $3.3 million price for Self-Portrait is used as the benchmark.
One of the star offerings in Sotheby’s Nov. 11 Impressionist and Modern Art, Part I sale is another Cézanne still life, Stoneware Pitcher , estimated to get in excess of $15 million. Six months ago, when Sotheby’s sold the Whitney Cézanne, Stoneware Pitcher was listed in the catalogue as a comparable, though smaller, still life. The painting was listed as “present whereabouts unknown.”
In announcing this November’s sale, a Sotheby’s press release states, “Following the success of the record-breaking sale of a still-life by Paul Cézanne from the Whitney Collection, which sold for $60.5 million, a second, smaller example will be offered in the Nov. 11 sale.”
The Whitney sale apparently lured the painting out of a discreet private collection by the possibility of a very high price.