Collecting 101
More on Auctioneers and Auctions on Land and at Sea
by
Anayat Durrani
Collection Series Part IV
Art auctions come in all shapes and sizes. The most well known are, of course, Sotheby’s and Christie’s. But there are many medium-to-smaller sized auction houses scattered throughout the U.S. and in other countries that cater to the art market. And there are also cruise line auctions, held on cruise ships at sea.
Since 1972, Pacific Galleries has been conducting premier auctions of antiques and fine art. They hold auctions every six weeks at their Seattle location. The items to be sold at auction can be previewed Friday through Monday before the sale and in their online catalog. Pacific Galleries retains a professional research team that includes experts in decorative arts, furniture, jewelry, rugs and fine art. All their auctioneers are trained in house.
“We only use employees of the company as auctioneers because we want them to share our philosophy and ethics,” Lynn Kenyon, general manager of Pacific Galleries and editor of Fine Interiors magazine told Fine Art Registry™. “All of our auctioneers are trained on the floor.”
As a company that has been in the business for over three decades, Pacific Galleries do not hire outside auctioneers, Kenyon says.
“Out-of-house auctioneers generally receive a percentage of the sale, so they have a personal incentive to earn the best prices and can be tempted to falsely raise bids,” she says.
All of the auctioneers at Pacific Galleries are licensed and bonded. Kenyon says they have “zero tolerance for phantom bidding or selling to the highest amount against absentee bids.” At their auctions, a veteran auctioneer at the podium monitors their auctioneers as they begin auctioning on the floor.
“Of course, the buyers continually monitor and evaluate auctioneers, from the old to the new ones,” adds Kenyon.
Considered the Northwest's premier auction house, O'Gallerie is the largest auction house of its kind in the region. Family owned and operated in Oregon for more than 30 years, they specialize in the appraisal and sale of fine art, furniture, antiques, rugs and carpets, collectibles, decorative objects and other items.
They conduct three-session auctions ten times each year, where they offer about 1,000 lots of items. Most of their auctioneers are hired as full time employees.
“Since auctioneering is a very small part of any auctioneers’ schedule, they usually have other roles when working full time, such as department heads, catalogers, appraisers, etc.,” says Thomas D. O’Grady, President and CEO, auctioneer and evaluator at O’Gallerie.
O’Grady told Fine Art Registry he considers auctioneering schools “old school” and not necessary. In fact, his father Dale who started the business in 1972 had no auction experience and taught himself to be an auctioneer. Today, at O’Gallerie, auctioneers are trained in-house and apprentice with senior auctioneers.
“We monitor all our auctioneers closely, holding them to the highest level of integrity. [This is done through] customer feedback and regular management performance reviews,” says O’Grady.
Leslie Hindman Auctioneers, located in Chicago, have the reputation as the Midwest’s leading fine art auctioneers, with buyers worldwide. Founded in 1982, sold to Sotheby’s in 1997 and reopened in 2003, Hindman auctions everything from contemporary paintings and fine jewelry to French furniture and rare books and manuscripts.
They hold regularly scheduled auctions and have a team of specialists who work with a worldwide network of consultants and representatives who appraise and market property. Before auctions take place, they provide printed auction catalogs, online auction catalogs for their international clients, and all of their auctions are conducted in real time on eBay Live Auctions. They also have free public gallery previews several days before auction and encourage potential bidders to find out as much information as possible on a lot’s condition, provenance, or find additional photographs when available before placing a bid.
Hindman trains their auctioneers in-house, and all of their auctioneers are full-time employees.
The art market has had its share of shady dealings. There have been cases of auctioneers and even auction houses taking part in illegal practices. However, Hindman assures that none of her employees would ever be a party to anything unethical. The company states that it espouses a practice of obtaining the highest prices while ensuring the highest standards of integrity and customer service.
“I am present and involved in every sale and I monitor what goes on at every sale,” says Hindman.
Auction Rings
In his book, Art Crime, John Conklin described auction rings as “groups of dealers, frequently organized on the spot, that agree to keep bids low on a specific lot by designating one of their members to bid up to an agreed-upon maximum price.” He explained that prices are kept lower than normal if the bidding were truly competitive. If one member of the ring obtains the piece, the group meets in another place after the sale and will then hold a second auction among themselves, with bidding starting slightly above the price paid at auction.
The winning bidder in the second auction is called a "knockout" in England, and the knockout pays each member of the ring “an equal share of the difference between the winning bid in the knockout and the price the piece was bought for at auction,” explained Conklin. Therefore, the winning bidder will have purchased the piece for a lower price than it would have cost at an open sale.
Conklin cited a case that is a variation of the auction ring that took place in London in 1985. A group of wealthy dealers conspired to bid on one or two lots of Old Masters paintings, in an effort to keep the prices low. Rather than hold a knockout auction on the spot, they agreed they would later share the profits from the sale of the pictures. Conklin said that auction rings have been illegal in Great Britain since 1927, but those who take part rarely face criminal prosecution.
Conklin said that auction rings are more often “in smaller auction houses and estate sales than they are in large auction houses, which routinely protect themselves against such collusion through secret reserves that ensure that objects will not be sold for less than their actual market value.”
Auction rings are more commonly found at “out-of-the-way-auctions” where there are not too many bidders who are knowledgeable about the real value of objects up for auction. He said at those types of auctions, auctioneers have even conspired with dealers by ignoring bids from audience members who are not part of the ring.
“Dishonest auctioneers have also omitted pieces from catalogs or previews so that potential bidders not in collusion with them will not know everything that is being offered for sale,” explained Conklin.
Auctions At Sea
According to its website, Plymouth Auctioneering (www.plymouthauctioneering.com), the auctioneer recruitment arm for Park West Gallery, “the world's largest privately held auction company,” provides art auctioneers to sixty-three cruise ships from eight major cruise lines worldwide.
“Michelle,” who prefers to remain anonymous, is a Park West-trained art auctioneer and has worked on all major cruise lines. She says the process toward becoming an auctioneer for Park West starts with two weeks of training at their gallery in Michigan by a team of staff, which includes a visit by Park West owner Albert Scaglione. The training continues throughout the year for all auctioneers for as long as they remain with Park West.
Candidates for Associate Auctioneer positions do not necessarily need an art background; they are trained in fine art auctioneering for cruise ships and report to the Principal Auctioneer onboard. The website says they have a “performance based opportunity” to be promoted to the lead Auctioneer position in about six to twelve months.
Auctioneers live and work on various cruise ships for four to five months at a time, and return home for a break for 4-5 weeks. Auctioneers travel up to 10 months a year. They earn a commission based income that according to the website has the potential to garner six figures, “potentially the highest in the industry.”
Michelle says, to her knowledge, licensing of auctioneers working at sea is not required because they are working in international waters. However, those working on land are licensed. She says Park West routinely monitors their auctioneers through visits by the sales manager, and video recordings of the auctions, that are sent to the head office.
“All the auction staff is armed with everything they need to get started,” says Michelle. “The rest is up to them.”
There is much more to be said about cruise line auctions and a number of articles on the subject are available on the Fine Art Registry website.
Collecting 101, Part I:
The Joys and How To's of Collecting Art, Antiques and Collectibles
Collecting 101, Part II:
The Engine That Drives the World of Collecting
Collecting 101, Part III:
Auctions and Auctioneers, and Some Tricks of the Trade
— Anayat Durrani
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December 12, 2007
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