How Auction Guarantees Are Changing The World Of Art

Joe Weisenthal (0:11)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:17)

And I'm Tracy Alloway.

Joe Weisenthal (0:19)

Tracy, did you know we just had something in New York that's apparently called Giga Week?

Tracy Alloway (0:24)

See, now I don't know how to answer this question because we were sort of talking about it a few minutes before we started recording.

I am aware that there was a big, big art auction. I was unaware that it's actually called Giga Week.

Joe Weisenthal (0:38)

Yeah, I didn't realize that either. Like, I guess every once in a while, auctions, like big weeks of art auctions are kind of like Mardi Gras in New Orleans or something. They just suddenly just pop up and your feed just gets dominated by people who are at this event. You're like, oh yeah, this is happening again. So obviously in New York recently, we just had a series of gigantic art auctions.

And apparently because of how much money the art sells for during the course of the week, they call it gig a week because over a billion dollars of art gets sold.

Tracy Alloway (1:12)

Oh, okay, so lots of money flowing through those auctions. And there was one point of interest in particular, because I remember you actually tweeting about it, but the father of Treasury Secretary, Steve Mnuchin, he bought a pretty large, how do I describe it? A sculpture that resembles like a balloon bunny.

Joe Weisenthal (1:33)

Yeah, and I don't even think it was that large, although we can get into it. But yeah, so a balloon bunny sold for a ton of money. I forget how much.

It sold for a crazy amount. And the guy who bought it at the auction, although I guess he was just a dealer, so he bought it on behalf of someone else, was the Treasury Secretary's dad. But it was sort of like this perfect, zeitgeist, other moment thing, an insane amount of money for a sculpture of the Treasury Secretary's dad. So it seems like a good time to talk about the art world and the financialization of the art world and where it's all going and what it says about the state of the economy.

Tracy Alloway (2:10)

Ooh, I feel so cultured. This will be the most cultured episode of Odd Lots.

Joe Weisenthal (2:15)

That's probably true, because I don't think we've talked about this before. So without further ado, I want to bring in our guest. And it was actually from a tweet by our guest that the first time I saw the whole thing about Mnuchin's dad and making the big purchase. So Margaret Carrigan, she's the deputy art market editor at The Art Newspaper. It's from her tweet that I saw about the Coons Bunny sale.

Thank you very much for joining us.

Margaret Carrigan (2:41)

Thank you so much for having me.

Joe Weisenthal (2:43)

So what was that like being in the room when the Coons Bunny sold? And how much was it? And sort of tell us what that was all about.

Margaret Carrigan (2:51)

Well, being in the room, I have to say was pretty much business as usual. This has become very de rigueur to be selling art for that much money. Now, of course, I say that rather flippantly because I have to cover these all the time, but it wound up selling for just over $90 million.

And that's nothing to look down your nose at. The Coons Bunny work was actually really interesting because it sold for $80 million and with fees that came out to about $91 million, it was sold without a guarantee. Now that's kind of like a big deal for a piece that has that much worth behind it. More and more frequently, we're seeing the use of third-party guarantees by auction houses to basically offset the risk of selling these high-value works of art.

And this one, they were just kind of let fly by the seat of its pants to see how it did.

Joe Weisenthal (3:41)

Before we get into the question of guarantees and how all that works, I just want to talk about the bunny a little bit more. When I saw that it was sold for $91 million, I assumed it was one of these gigantic sculptures that's as big as an entire room or you'd need to add a wing to your house.

But it's not really even that big, right?

Margaret Carrigan (3:59)

No, it's only about three and a half feet.

Joe Weisenthal (4:01)

That's crazy.

Margaret Carrigan (4:02)

If it's appropriate, I'd love to give people a visual of this bunny. It looks like a balloon animal. And this is kind of something that the artist Jeff Koons is famous for. It's one of his most iconic works. It was one of only four ever made. So in that way, because there's a limited amount of these bunny sculptures out there, it had a lot of cachet.