An Auction House Scorecard

After decades of pristine respectability, Christie’s and Sotheby’s are as disgraced as dowagers in a paddy

wagon. Investigated by the U.S. Justice Department for a commission-fixing conspiracy, Christie’s has turned state’s

evidence, The top management at Sotheby’s has resigned. And the owner of Phillips, the third-largest house, is

sniffing around Sotheby’s. Is there no reserve on trouble for the big three?

Christie’s

Founded in 1766 in London by James Christie. Opened shop in New York in 1977; now in more than 41 countries. Has

never shaken its rep as the stuffiest of the auction houses, or as a finishing school for the offspring of the

Manhattan and London elite. Entry level is still dominated by young women, dubbed “Christie’s girls,” and most

auctions are still strictly black-tie affairs. In 1996, for the first time in 43 years, Christie’s sales numbers

beat its only rival, Sotheby’s, and have continued to do so.

Take: Worldwide sales for 1988 were $1.96 billion; 1999 sales estimated at over $2 billion, a record.

New Owner: François Pinault, 63. Fattest cat in France; net worth $6.6 billion. Self-made, buzz-cut high

school dropout. Got his start in timber. In early 1990’s, started buying chain stores. Recently reincarnated as a

luxury-goods tycoon. Apparent shyness toward the spotlight conflicts with his growing appetite for high-profile

companies, but he did have French President Jacques Chirac at his son’s wedding. In 1998, he paid $1.2 billion for

Christie’s. Later snapped up owner of Yves Saint Laurent and Oscar de la Renta. Saved Gucci from the mitts of

countryman and longtime nemesis Bernard Arnault, a couture titan and up-and-coming auctioneer. Gucci contretemps

brought the two to dueling libel suits, which were later dropped. Also in his portfolio: in France, the Printemps

department store chain; FNAC, France’s version of the Virgin megastore; and the discount mail-order catalogue La

Redoute. In the United States, interests in Vail and Beaver Creek ski resorts, Converse sneakers, Samsonite and

Chi-Chi’s, a chain of Mexican restaurants. Mr. Pinault has sparked worries that he will try to expand Christie’s

identity as a brand–Christie’s clothing, perfumes, dry goods, etc. He has mulled erecting a hotel in the London

headquarters.

Headquarters: The 315,000-square-foot Rockefeller Center headquarters opened last spring, with 21,000

square feet of auction room space and a 30-foot-high Sol LeWitt mural in the lobby, a show of support for

contemporary art, the newest and most competitive area for the auction houses.

Role in Current Scandal : “They’re the rats.” Effectively hung Sotheby’s out to dry when they reportedly

forked over documents and other materials related to the U.S. Department of Justice investigation, in exchange for

“conditional amnesty.” Under U.S. law, only the first party to cooperate is entitled to amnesty.

On the Way Out: Christopher Davidge, the 54-year-old former chairman known as the “Golden Hamster” for his

puffy blond locks. Resigned from the auction house last Christmas Eve after 34 years. Depending on whom you ask, he

left after giving the Feds documents relating to the collusion charges. Or he was ousted because of the

investigation, or because he had feuded with the board and Mr. Pinault over the direction of the company–or both. Or

you could believe London’s Mail on Sunday , which alleged that Mr. Davidge was pink-slipped because of a

torrid relationship with a 29-year-old Asian artifacts expert at Christie’s. Landed a multimillion-dollar,

golden-parachute gag order before jumping ship, and was said to be on holiday in Argentina when the two Sotheby’s

executives stepped down on Feb. 21.

Up-and-Comers: “Ed.” 40-year-old rugby-playing chief executive and managing director Edward Dolman.

Started as a porter in 1984. Moved to New York to oversee North and South American operations and was installed to

replace outgoing chairman Christopher Davidge in January. May return to London, from where Mr. Davidge ran things.

Also: Christopher Burge, the city’s most famous auctioneer. Played himself in The First Wives Club . Finally,

there’s young Prince William, who punched in for a brief work stint at Christie’s London last year.

Other Players: On the board: Hubert de Givenchy, the Earl of Halifax, John Lumley and other foreign

royals.

High Points: Two months before she died in 1998, Princess Diana sold 79 of her dresses at Christie’s, one

for $223,000. Marilyn Monroe’s “Happy Birthday, Mr. President” dress fetched $1.15 million. Fans paid $1,500 for a

Barbra Streisand tea set and $2,300 for her hair dryer. A pair of Wizard of Oz ruby-red slippers pulled in

$165,000 in 1988, the same year Christie’s auctioned off part of the estate of cult-film actor-actress Divine. Sale

in 1990 of Vincent van Gogh’s Portrait of Dr. Gachet landed $82.5 million, still the largest sum paid for a

single work of art at auction. Sale in 1997 of Victor and Sally Ganz’s art collection for $206.5 million, a record

for a single-estate sale, including a $48 million sale of Picasso’s Le Rêve . Other records: $8.4 million in

1996 for a Korean dragon jar (a record for an Asian work of art); $35.2 million paid in 1989 for Pontormo’s

Portrait of Duke Cosimo I de Medici (a record for an Old Master painting); $640,500 for a Honus Wagner T-206

baseball card (auction record for sports memorabilia) and $146,000 for John Travolta’s Saturday Night Fever

suit, presumably a record for a suit once owned by Gene Siskel.

Low Points: One of several houses duped by John Drewe, the masterful London con who manipulated fake

histories for his fraudulent classics. Took some grief for co-sponsoring the elephant dung, et al., at the Brooklyn

Museum of Art’s Sensation show. Deprioritized plans for an interactive auction Web site, deciding to hold out

reportedly because a Web partnership could dilute brand identity and increase potential for sales of fakes and-or

damaged goods. Everything moved in-house. We’re waiting!

On the Docket: In March, a subscriber’s set of James Audubon’s Birds of America series, expected to

pull in between $3 million and $4 million. Later this spring, an entertainment collectibles auction to include

another set of Judy Garland’s ruby-red slippers; might fetch over $1 million.

Mood Around the Water Cooler: An increasingly competitive and aggressive atmosphere. Hours have been

stretched and working weekends is pretty standard. Trust-fund kids who show up looking for an easy post-Ivy gig

leave shellshocked after a few months.

Forecast: The feeling in the art world is that the only thing slimier than Christie’s alleged collusion

was its willingness to sell its partner in crime up the river. Said one New York art dealer: “It couldn’t happen to

a nicer bunch of people.” To wit, cooperation is viewed as an admission of guilt and has brought on a class-action

lawsuit, currently being organized by former clients wanting commissions refunded. Even if things get sorted out

stateside, European and Australian investigators are only now looking into similar allegations.

–Jason Gay

Sotheby’s

Started as a bookseller. First official auction was in 1744. John Sotheby inherited the business in 1778. In

1917, they began peddling fine art. Now in over 38 countries, with over 100 offices. Splits 95 percent of the

world’s auction market with its only rival, Christie’s. Leads the way in the People -magazining of auction

houses, which peaked around the time of the Jackie O. estate sale. Still packed with Vassar girls and well-heeled

gents. In 1977, it went public. In November 1999, it entered a strategic partnership with Amazon.com Inc. that

resulted in the joint auction Web site Sothebys.amazon.com.

Take: $1.87 billion for 1998.

New Owner: The big question. The house is up for sale and has been before. A. Alfred Taubman, 75, the

largest shareholder (who, with a group of investors, paid $139 million in 1983 for a significant share–Mr. Taubman

now holds 22.5 percent), stepped down as chairman on Feb. 21. A shopping-mall king from Detroit, known for his

hands-off approach mostly because he didn’t know a thing about auctions when he bought in. Net worth estimated at

$860 million by Forbes . Still effectively the owner, but likely to be asked by the board to sell his majority

stake, either to cooperate with the Feds or to satisfy public opinion. Reportedly had offers from Web partner

Amazon.com, EBay.com and French acquisitionist Bernard Arnault, who already owns the third-largest auction house in

the world ( see Phillips).

Headquarters: Currently creating a 10-story art mall atop their offices on York Avenue near East 70th

Street. Can you say food court? Idea is to make the out-of-the-way place a destination. Its tony “international”

real estate company and its collectibles department will move in, and so will a heap of dusty art in off-site

storage. Maybe even some dealers.

Role in the Scandal: The target. Although Christie’s employees reportedly received a series of subpoenas

last year, the same was not true of Sotheby’s, which kept quiet while Christie’s turned state’s evidence. Raising

the question: Did they draw the wrong straw, or are they more guilty? Unlike Christie’s, which has gotten a new

chairman and a new owner within the last two years, Sotheby’s leadership has been in control during the entire

course of the Justice Department investigation. The implications: A sale is inevitable to convince public opinion

that it has reformed.

On the Way Out: Dede Brooks, 49, Sotheby’s president and chief executive since 1994. Went down with Mr.

Taubman after a 21-year career there. She was the auction house, running it day to day, acting as spokesman

and auctioneer and house mother. Brooks loyalists are shocked by the notion that she would have been involved in

collusion with Christie’s and wonder if the illegal activity took place at some level beneath her. Others say,

considering her style, how could she not have know everything? Also: Tiffany Dubin, Mr. Taubman’s stepdaughter, left

for the Action Channel last year. Ms. Dubin led the house in its plunge toward contemporary memorabilia sales, her

specialty being vintage clothing–i.e. shift dresses and bell-bottoms. She got out just in time.

Up-and-Comers: A new chairman will come with a new owner. Internal candidates are hard to identify right

away, considering the dominance of Ms. Brooks.

Other Players: Two figureheads have arisen, but neither is likely to be permanent. Michael Sovern,

68–former president of Columbia University, personal friend of Sotheby’s board member Henry Kravis and trustee of

President Bill Clinton’s legal defense fund–was named chairman. He’s Mr. Damage Control. William Ruprecht, formerly

senior vice president, replaced Ms. Brooks as president and chief executive. He joined the company in 1980. Became

managing director of Sotheby’s North and South American division in 1994. His favorite line to staff is, “I don’t

work for the Department of Justice.” Other high-profile board members: Sharon Percy Rockefeller, the president of

WETA, the Washington D.C. public broadcasting company, and Conrad Black, the Canadian media mogul.

High Points: “Jackie’s junque,” as someone dubbed the sale of First Lady Jacqueline Kennedy Onassis’

estate, which took in $34.5 million. The estate of Pamela Harriman, the U.S. Ambassador to France, got $8.7 million.

Also: a preserved slice of wedding cake from the nuptials of the Duke and Duchess of Windsor for $29,000 in 1998 and

a Tyrannosaurus rex skeleton for $8.4 million in 1997. Way back in 1811, Sotheby’s sold the library of Napoleon.

Most expensive single item it ever sold: Pierre Renoir’s Au Moulin de la Galette for $78.1 million in 1990.

Other notable items: Vincent van Gogh’s Irises for $53 million.

Low Points: Right this minute. With the one-woman show in the figure of Ms. Brooks off the premises,

Sotheby’s is a vacuum.

On the Docket: Unlike last spring, when Sotheby’s auctioned off the estate of Mr. and Mrs. John Jay

Whitney for $170 million, there is no major estate sale coming up this spring. In fact, other than the annual

Impressionists sale set for May, there’s nothing notable on the schedule, which may have to do with a crisis of

confidence among consumers based on all the bad press.

Mood Around the Water Cooler: One Sotheby’s staff member said managers are begging people not to quit over

the mess. And Mr. Ruprecht has tried to buttress confidence by holding staff meetings to discuss the upcoming spring

auction season, an important aspect of Sotheby’s fiscal year. Several other employees said there had been no

discussion about the antitrust investigation at all.

Forecast: There’s been no comment on a sale. All planning now is short-term. Analysts say that if Mr.

Kravis took over, it’s likely he would take the company private, restructure things and then make a killing on a new

I.P.O. Then again, if Mr. Kravis wanted Sotheby’s, he’s been in a good position to buy it–and at a much better

price–for years and hasn’t. He has also had a former KKR guy, Kevin Bousquette, inside Sotheby’s as chief operating

officer, so he knows the company’s entrails. Mr. Arnault would likely merge Sotheby’s with Phillips to create one

huge concern to compete with Christie’s. The thought of EBay or Amazon taking it over does not bode well for the

city’s fine art market.

–Kate Kelly

Phillips

Started as a bookseller. First official auction was in 1744. John Sotheby inherited the business in 1778. In

1917, they began peddling fine art. Now in over 38 countries, with over 100 offices. Splits 95 percent of the

world’s auction market with its only rival, Christie’s. Leads the way in the People -magazining of auction

houses, which peaked around the time of the Jackie O. estate sale. Still packed with Vassar girls and well-heeled

gents. In 1977, it went public. In November 1999, it entered a strategic partnership with Amazon.com Inc. that

resulted in the joint auction Web site Sothebys.amazon.com.

Take: $1.87 billion for 1998.

New Owner: The big question. The house is up for sale and has been before. A. Alfred Taubman, 75, the

largest shareholder (who, with a group of investors, paid $139 million in 1983 for a significant share–Mr. Taubman

now holds 22.5 percent), stepped down as chairman on Feb. 21. A shopping-mall king from Detroit, known for his

hands-off approach mostly because he didn’t know a thing about auctions when he bought in. Net worth estimated at

$860 million by Forbes . Still effectively the owner, but likely to be asked by the board to sell his majority

stake, either to cooperate with the Feds or to satisfy public opinion. Reportedly had offers from Web partner

Amazon.com, EBay.com and French acquisitionist Bernard Arnault, who already owns the third-largest auction house in

the world ( see Phillips).

Headquarters: Currently creating a 10-story art mall atop their offices on York Avenue near East 70th

Street. Can you say food court? Idea is to make the out-of-the-way place a destination. Its tony “international”

real estate company and its collectibles department will move in, and so will a heap of dusty art in off-site

storage. Maybe even some dealers.

Role in the Scandal: The target. Although Christie’s employees reportedly received a series of subpoenas

last year, the same was not true of Sotheby’s, which kept quiet while Christie’s turned state’s evidence. Raising

the question: Did they draw the wrong straw, or are they more guilty? Unlike Christie’s, which has gotten a new

chairman and a new owner within the last two years, Sotheby’s leadership has been in control during the entire

course of the Justice Department investigation. The implications: A sale is inevitable to convince public opinion

that it has reformed.

On the Way Out: Dede Brooks, 49, Sotheby’s president and chief executive since 1994. Went down with Mr.

Taubman after a 21-year career there. She was the auction house, running it day to day, acting as spokesman

and auctioneer and house mother. Brooks loyalists are shocked by the notion that she would have been involved in

collusion with Christie’s and wonder if the illegal activity took place at some level beneath her. Others say,

considering her style, how could she not have know everything? Also: Tiffany Dubin, Mr. Taubman’s stepdaughter, left

for the Action Channel last year. Ms. Dubin led the house in its plunge toward contemporary memorabilia sales, her

specialty being vintage clothing–i.e. shift dresses and bell-bottoms. She got out just in time.

Up-and-Comers : A new chairman will come with a new owner. Internal

candidates are hard to identify right away, considering the dominance of Ms. Brooks.

Other Players: Two figureheads have arisen, but neither is likely to be

permanent. Michael Sovern, 68–former president of Columbia University, personal friend of Sotheby’s board member

Henry Kravis and trustee of President Bill Clinton’s legal defense fund–was named chairman. He’s Mr. Damage Control.

William Ruprecht, formerly senior vice president, replaced Ms. Brooks as president and chief executive. He joined

the company in 1980. Became managing director of Sotheby’s North and South American division in 1994. His favorite

line to staff is, “I don’t work for the Department of Justice.” Other high-profile board members: Sharon Percy

Rockefeller, the president of WETA, the Washington D.C. public broadcasting company, and Conrad Black, the Canadian

media mogul.

High Points: “Jackie’s junque,” as someone dubbed the sale of First Lady

Jacqueline Kennedy Onassis’ estate, which took in $34.5 million. The estate of Pamela Harriman, the U.S. Ambassador

to France, got $8.7 million. Also: a preserved slice of wedding cake from the nuptials of the Duke and Duchess of

Windsor for $29,000 in 1998 and a Tyrannosaurus rex skeleton for $8.4 million in 1997. Way back in 1811, Sotheby’s

sold the library of Napoleon. Most expensive single item it ever sold: Pierre Renoir’s Au Moulin de la

Galette for $78.1 million in 1990. Other notable items: Vincent van Gogh’s Irises for $53 million.

Low Points: Right this minute. With the one-woman show in the figure of Ms. Brooks off the premises,

Sotheby’s is a vacuum.

On the Docket: Unlike last spring, when Sotheby’s auctioned off the estate of Mr. and Mrs. John Jay

Whitney for $170 million, there is no major estate sale coming up this spring. In fact, other than the annual

Impressionists sale set for May, there’s nothing notable on the schedule, which may have to do with a crisis of

confidence among consumers based on all the bad press.

Mood Around the Water Cooler: One Sotheby’s staff member said managers are begging people not to quit over

the mess. And Mr. Ruprecht has tried to buttress confidence by holding staff meetings to discuss the upcoming spring

auction season, an important aspect of Sotheby’s fiscal year. Several other employees said there had been no

discussion about the antitrust investigation at all.

Forecast: There’s been no comment on a sale. All planning now is short-term. Analysts say that if Mr.

Kravis took over, it’s likely he would take the company private, restructure things and then make a killing on a new

I.P.O. Then again, if Mr. Kravis wanted Sotheby’s, he’s been in a good position to buy it–and at a much better

price–for years and hasn’t. He has also had a former KKR guy, Kevin Bousquette, inside Sotheby’s as chief operating

officer, so he knows the company’s entrails. Mr. Arnault would likely merge Sotheby’s with Phillips to create one

huge concern to compete with Christie’s. The thought of EBay or Amazon taking it over does not bode well for the

city’s fine art market.

–Kate Kelly