The Back Room: The Fineberg Flop

This week in the Back Room: an autopsy of spring’s most pivotal sale, a Henry Street gallery surprise, another modern master under the misconduct microscope, and much more—all in a 7-minute read (2,056 words).

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Top of the Market

The Fineberg Flop

To take a guarantee, or not to take a guarantee? That is the question, or so it seems, in the aftermath of Christie’s evening sale of the Gerald Fineberg collection.

In last week’s Art Detective, our colleague Katya Kazakina performed a full post-mortem on the pivotal auction, which ended with a hammer total of $124.7 million against an estimate of $163 million to $235 million.

In examining just where the Fineberg heirs erred, here’s what went wrong—and what we can learn from it in this new phase of the business cycle…

 

Confident to a Fault

Eschewing a guarantee that sources said topped $200 million, the estate instead pushed hard to secure what Katya calls “an aggressive enhanced-hammer deal,” by which it would share a big chunk of Christie’s buyer’s premium. Yet that amount totaled only about $37.4 million after the dedicated Fineberg evening and day sales in New York.

And “aggressive” is indeed the operative term. With no guarantees or irrevocable bids, lot after lot sold for less—sometimes far less—than the presale estimates set months earlier.

While the estate and Christie’s agreed to lower reserve prices mid-sale, the former stood firm on refusing third-party guarantees. The result? Several buyers scored bargains on blue-chip artists while the heirs swung and missed.

In fairness, the estate’s full payout is still accumulating. More lots from the Fineberg collection were offered in Christie’s Hong Kong auctions at the end of May, and still more will appear in the house’s New York design sale in June and other, yet-to-be-announced events, according to Christie’s.

Yet it’s hard to imagine the final accounting looking favorable compared to the juicy guarantee that Fineberg’s descendants turned down to roll the dice.

 

Misreading Seller Psychology

On its face, an auction house that agrees to share the upside with a consignor is an auction house that saves a healthy heap of cash. But that reading underestimates the demotivating effect an enhanced hammer deal can have on auction house employees.

With their extensive labor and up-front cost in putting together a sale, including logistics and financial outlays for little stuff like packing, shipping, installing, and insuring hundreds of works, staffers at every level might be left feeling undervalued by such an arrangement.

That could mean less effort made to make sure every component of the auction excels. No one would blame staffers for this… except for the sellers.

As one executive at a rival auction house explained, “Working for two percent is, theoretically, not that exciting.” The Fineberg heirs might have learned this lesson the hard way.

 

Over-marketed But Underwhelming

Christie’s went overboard to play up Fineberg’s eye as a curator in the lead up to the auctions, creating a narrative that, as one observer told Katya, made it sound “like it’s the Mona Lisa coming for sale.”

But that tack backfired. In reality, some dealers who worked with Fineberg knew him as more of a haggler than a visionary. He often preferred decent works at a discount rather than bravura works for a price.

Plus, advisor (or “wheeler-dealer,” depending on your perspective) Michael Black was perhaps the most prominent force behind Fineberg’s choices. And while the collection spanned a century, many of those choices were only made during the last three to four years.

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The Bottom Line

While the estimates in the Fineberg sales were out of step with the quick-changing market, many of the worst mistakes could have been avoided with a little humility and an embrace of all the tools at the sellers’ disposal.

Yet even the screaming bargains in the Fineberg evening sale underscored art’s resilience as an asset class. Smart investors love nothing more than to pounce on a short-term deal for something with long-term value.

Some other works, including some that Black advised Fineberg on, also did incredibly well in Christie’s day sale. Grace Hartigan’s  (1957), purchased in 2019, fetched $1.2 million, 12 times the low estimate of $100,000. Lee Krasner’s 1975 , also acquired in 2019, sold for $1.2 million, more than twice the low estimate of $500,000. And Lynn Drexler’s , which brought $1.4 million in the day sale against a low estimate of $150,000, was a true highlight among all the lots sold this spring—as well as one of the last pieces Fineberg ever bought.

These bidding wars proved that, even in a correction, there is still strong demand for the right works at the right prices. In that sense, the overarching takeaway from the Fineberg auction might be as simple as… don’t be greedy.

The auction houses, for all their opacity and occasional grandstanding, are performing a valuable service. Sometimes, the wisest move is to bite the bullet, pay up, and actually listen to their advice.

[Read More]

 

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Paint Drippings

The latest Wet Paint tracks what appears to be Jack Pierson’s new gallery space on Henry Street, and gets into the funny story of how Allan Schwartzman’s advisory firm got its phone number mixed up with a popular uptown lunch spot…

Here’s what else made a mark around the industry since last Friday morning…

 

Art Fairs and Gallery Weekends

• Bart Drenth resigned as TEFAF’s global managing director less than six months after ascending to the post—and less than a week after his anti-woke tweets were chronicled in Wet Paint. (Artnet News)

• Frieze Seoul announced that over 120 galleries will exhibit at the fair’s second run this fall, again at COEX in the city’s Gangnam district. But several galleries, including Pilar Corrias, Xavier Hufkens and LGDR, are not reprising their attendance.
• Gallery Weekend Beijing returned this year to fuller scale than last year’s rendition (but not quite to 2019 levels), with over 150,000 visitors flocking to the 798 Art District to see presentations from 40 galleries and non-profit institutions. ( Artnet News)

 

Auction Houses

• Sotheby’s finalized a deal to acquire the historic Breuer Building on Madison Avenue for just over $100 million, according to sources familiar with the deal. The auction house plans to make the Breuer its new flagship site in 2025, months after the Frick Collection’s lease ends in August 2024. (Artnet News)
• Our By the Numbers recap found that Christie’s Post-Millennium and 20th/21st century evening sales in Hong Kong on May 28 generated mixed results. The premium-inclusive HK$889 million ($113.5 million) sales total was up less than 20 percent by value from last fall’s equivalent auctions despite offering nearly one-third more lots by volume. (Artnet News Pro)

• The second auction of artwork and furnishings belonging to Ann and Gordon Getty is set to take place this June at Christie’s New York, following the blockbuster first installment focused on works from their opulent Greco-Roman style estate last October. (Artnet News)

 

Galleries

• This week’s gallery representation news includes Xavier Hufkens taking on the estate of Leon Kossoff, Venus Over Manhattan tapping in abstracted-poodle painter Susumu Kamijo, Kendra Jayne Patrick adding painting-on-paper specialist Ada Friedman, and Esther Schipper joining Gladstone Gallery in representing Anicka Yi. (, )
• François Ghebaly is planning to open its fourth space in Rome, adding to the gallery’s two locations in Los Angeles and one in New York. (Wet Paint)
• Regen Projects named Magnus Edensvard, former proprietor of the multi-city gallery Ibid. Projects, its newest director. ()

 

Institutions

• Paris’s Quai Branly extended the tenure of president and curatorEmmanuel Kasarhérou. Kasarhérou arrived to the institution from theTjibaou Cultural Center in Nouméa, New Caledonia, and became the firstKanak person to head a major museum in France. ()
• The board of the Humboldt Forum in Berlin re-upped Hartmut Dorgerloh, who has led the institution since 2018, for another five-year term.()

• As part of a €2 billion ($2.2 billion) aid package, Italy plans to raise the price of tickets to state-run museums by €1 each during the high season to help restore cultural heritage sites damaged by floods in the Emilia-Romagna region. ()

 

Tech and Legal News

• ARTEX MTF announced that it will list and trade fractionalized shares of Francis Bacon’s (1963). The painting, valued at around $55 million, will be offered to the investing public for $100 per share this summer. ()
• Sotheby’s second sale of NFTs from the bankruptcy estate of hedge fund Three Arrows Capital is scheduled for June 15, with 37 pieces estimated to sell for $5 million. The first seven NFTs from the collection all exceeded their pre-sale high estimates, taking in more than $2.4 million last month.(Artnet News)
• After pleading guilty in February to money laundering charges, Daniel Elie Bouaziz was sentenced to 27 months in prison, followed by three years supervised release and a $15,000 fine, for selling cheap reproductions of works purportedly by Andy Warhol, Jean-Michel Basquiat, and Roy Lichtenstein at his Palm Beach, Florida, galleries. (Artnet News)

[Read More]

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“He was fascinated with Hitler. As a child, he pushed his friend from a 15-foot bridge and ate cherries while they were injured.”

—@That_Art_History_Girl via TikTok, leading the Gen Z charge to cancel Salvador Dalí. (Artnet News)

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Data Dip

Whether you slice the list by value or by volume, most of the 15 priciest artworks sold by gavel this April changed hands in the back-to-back evening auctions at Sotheby’s Hong Kong. The sales marked the house’s 50th anniversary in Asia.

According to Alex Branczik, senior director and chairman of modern and contemporary art for Asia at Sotheby’s, no lots by Western artists were included in the evening sales commemorating the house’s 40th anniversary in the region in 2013.

Ten years later, the equivalent auctions showed just how much tastes have changed…

• Of the 15 priciest works traded at auction in April 2023, 10 appeared in Sotheby’s Hong Kong’s anniversary evening sales on April 5, generating a combined $101.3 million after fees.
• Bidders spent more than three-quarters of that premium-inclusive total ($78.3 million) on works by artists of Asian heritage, led by the $32.1 million sale of Zhang Daqian’s (1973) in the single-lot sale that kicked off the evening.
• The remaining $23 million was generated by one lot each from three Western artists: Pablo Picasso ($11.9 million), Joan Miró ($6.4 million), and Gerhard Richter ($4.7 million).

This sales split is a useful reminder of the state of play in Hong Kong, if not the larger Asia Pacific: global taste has most definitely taken hold, but a strong preference remains for artists with roots in the region.

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Thanks for joining us in the Back Room. See you next Friday.