Sotheby's Says Contemporary Bet Was Won by `Hard Work' Not Luck, Yazzy's at www.williamverdult.com

According to Bloomberg, Sotheby's bet on demand for art by Francis Bacon and Jeff Koons was won by hard work, not a lucky spurt in buying, said Tobias Meyer, contemporary-art chief for the world's second-largest auction house.

``We worked hard at getting the right pieces'' for a Nov. 14 sale, one of a series of autumn auctions, Meyer said in a Nov. 16 telephone interview from New York. ``Before accepting anything we asked, Are these objects extraordinary?''

Sotheby's guaranteed prices to sellers of 36 contemporary works valued at $174 million to $220 million at the sale, and sold 33 of them for $216 million before fees, said JMP Securities analyst Kristine Koerber. U.K. artist Bacon's bullfight picture and self-portrait made up $70.5 million of the total for guaranteed art, she said in an e-mailed report.

Guarantees shift the risk of a price drop from the seller to the auction house, which pays an agreed minimum even if a work doesn't sell. Sotheby's shares plunged 35 percent after a Nov. 7 Impressionist sale missed its estimate and led to a $14.6 million loss on guarantees.

Sotheby's stock rose 18 percent from its Nov. 12 low after Sotheby's biggest-ever contemporary sale, which totaled $315.9 million with fees.

``They were lucky,'' said New York art dealer Richard Feigen, whose clients include Paris's Louvre museum. ``The contemporary- art market is flooded with liquidity but it won't last forever.''

Other parts of the U.S. economy are ``gasping for liquidity,'' Feigen said. The slump in global credit markets may force banks and other lenders to cut loans by $2 trillion and trigger a ``substantial recession'' in the U.S., according to Goldman Sachs Group Inc.

Managing Risk

The performance of Sotheby's shares shows how closely they are tied to the company's ability to manage risk. ``My guess is they will be more careful next time,'' said dealer Feigen.

The Nov. 14 sale was one of four main evening auctions of Impressionist to contemporary works by Sotheby's and Christie's International, the top two art sellers. Sotheby's contemporary auction, with 78 percent of the low value guaranteed, was the only one that neared its top estimate.

Three evening sale totals were nearer their low valuations, indicating some of the art was a tough sell. London jeweler and collector Laurence Graff said he bought $40 million of paintings by Andy Warhol and Jean-Michel Basquiat -- actively traded artists who are mainstays of the auction and dealer business -- mostly at or below their low estimates.

Sale `Challenge'

Preparing for the sale, ``We challenged ourselves,'' said Meyer. ``We turned down four Rothkos, three Basquiats and several Richters,'' among other second-tier works by well-known artists. ``We went after the best'' art by John Chamberlain and Donald Judd, he said.

The screening process came out of May's New York auctions, when two Mark Rothko and Bacon works ``shattered every expectation'' at Sotheby's, yet two Jackson Pollock paintings failed to sell and Sotheby's struggled with other works, he said.

Meyer pursued the Bacon images for November's sale, flying to see the sellers and offering guarantees, because he was convinced ``they were worth going after,'' he said. A catalog for a Bacon show in Dusseldorf last year said the bullfight picture was owned by the Viktor and Marianne Langen Collection.

``It's really about finding masterpieces,'' Meyer said.

Koons's Heart

U.S. pop artist Koons's ``Hanging Heart'' object is ``an iconic image of international meaning,'' Meyer said. ``It's about love and happiness.'' The pink heart earned Koons the title of the auction world's most expensive living artist, deposing Britain's Damien Hirst, when it sold to dealer Larry Gagosian for $23.6 million with fees.

Three out of four Hirst works at Sotheby's sold near their low estimates.

Presale estimates exclude fees. Auction houses add commissions, which they've raised in recent years, when publishing final prices and records.

Sotheby's contemporary-art guarantees paid off because of reforms adopted after its mishaps a week earlier, such as starting the bidding at lower prices, said New York-based private dealer Christopher Eykyn.

``They clearly made serious efforts to encourage buyers to take part by being as accommodating as possible to potential bidders, and by lowering reserves where necessary,'' Eykyn said in an e-mail. ``Those efforts appeared to generate bids on works which otherwise might have struggled. It was the right policy.''

Meyer said auction-house specialists sat among the other bidders at Sotheby's sale, making the room livelier. Usually, in- house experts are at a long table of telephones against the wall.

Freud, Prince

At Christie's Nov. 13 sale, Koons's ``Diamond (Blue)'' went to Gagosian for $11.8 million, below the low estimate even after adding fees. Lucian Freud, Richard Prince and Zhang Xiaogang set records at Christie's $325 million auction.

Sotheby's stock closed Friday at $38.03, down 24 cents in New York Stock Exchange Composite trading. The low reached on Nov. 12 was $32.35.

Sotheby's, with its main salerooms in New York, is incorporated in Wilmington, Delaware.