Sotheby’s and Christie’s are both giant, international auction houses that found their beginnings in the 1700s. Both have connections to royalty and billionaires. Yet even if you’re deeply involved in the world of art auctions, it can be a little hard to tell the difference between the two.
Below, we found the history of the two giants; and the few things that set these competitors apart.
Brief Overview: Sotheby’s
According to Sotheby’s own Our History web page, it was founded in 1744 by Samuel Baker. Baker was an entrepreneur, publisher, and bookseller whose first auction was titled Several Hundred scarce and valuable Books in all branches of Polite Literature. Opening this auction up in London, it earned £826 at the time.
Baker and his successors all formed connections with major libraries that helped them sell rare items. When Napoleon died, they sold the books he took with him in exile to St. Helena.
In the mid-1950s, Sotheby’s caught up with new changes by creating an impressionist and modern art department. They acquired great viewers such as Queen Elizabeth II. She visited their 1957 Weinberg Collection: a series of impressionist and post-impressionist artwork previously owned by Dutch Banker Wilhelm Weinberg.
In 1964, Sotheby’s expanded itself by buying Parke-Bernet, the USA’s largest fine art auction house at the time. Today, it’s noted as the oldest and largest international firm of fine art auctioneers in the world. It has 80 locations across the globe and sees an annual turnover of about $4 billion.
Brief Overview: Christie’s
Christie’s also saw its start in London. Christie’s Timeline shows that James Christie made his first sale in 1766 in a saleroom in Pall Mall, London. By 1778, he had built his way up to negotiating art sales with Catherine the Great.
By 1786, Christie’s sold the library of the famous Dr. Samuel Johnson, creator of the Dictionary of the English Language (1755). This collection included insightful books on a variety of topics including but not limited to medicine, law, math, and theology.
In 1824, The National Gallery was founded in London. It opened its doors with many purchases from Christie’s. New York’s MET museum also made its first connection to the London market through Christie’s, sending them its first lot for sale there in 1958.
Today, Christie’s boasts a worldwide influence with locations in Europe, Asia, Africa, and the Americas.
Business: The Devil in the Details
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After reading the history of both houses, you can say that they both have major connections that helped them skyrocket to success in common.
Artsy writer Don Thompson has written about the business side of each house, calling the two a duopoly. However, what makes them unique is that they both offer massive benefits to buyers to attend auctions. Christie’s, for example, offers buyer rebates and incentives like first-class tickets to attend their events. Since Sotheby’s knows that Christie’s is its main competitor, it has no choice but to offer similar benefits.
Until July 2019, they differed in what kind of institution they are. Scott Reyburn of the NY Times paper has explained that Christie’s is privately owned by French billionaire François Pinault, while Sotheby’s was a publicly listed company.
The private nature of Christie’s means that it’s legally allowed to only reveal its final sales to the public. Christie’s has guaranteed minimum prices for pieces through 3rd party agreements, but they aren’t obligated to show these deals to the public.
Sotheby’s, on the other hand, was held accountable to release information to its shareholders. Shareholders could thus openly complain when they were unhappy with returns on capital.
David A. Schick, the managing director of Stifel Financial, commented on their unique business models to the NY Times, “I don’t know of another example [of their model]. In most duopolies, the companies are big and they’re both public. It has probably created a lot of fuzzy, illogical comparisons.”
However, in June, French-Israeli telecom businessman Patrick Drahi made an offer to buy Sotheby’s for $3.7 billion. This means that Sotheby’s can be more flexible in its deals now that it doesn’t have to justify expensive guarantees or other benefits to shareholders. But this gives comfort to their buyers who would rather not be scrutinized by the public eye.
Sotheby’s new model is still going through approval by shareholders and the law. It’s expected to close its fourth quarter of sales for 2019. After that, it will adopt its new private curtain; and perhaps we’ll be able to compare Sotheby’s and Christie’s like apples and apples.
Specialties: Furniture, Books, Jewelry, and other Antiques.
According to Forbes writer Anna Rohleder, both auction houses are known for excelling in different areas.
Sotheby’s excels in American furniture and photography. Christie’s excels in European furniture, books, and manuscripts. Both of them market themselves for having fantastic jewelry collections. Yet, due to their similarities, who people choose to buy and sell to largely comes down to “who’s nicer” when they meet them.
Even recently, both auction houses held space-themed sales to celebrate the 50th anniversary of the moon landing. Our article, Why is the Apollo 11 Lunar Module Timeline Book Important? talks about the star of Christie’s auction: a book that’s been to the moon. Sotheby’s had a star of its own: a well-conserved collection of tapes of the first lunar landing. Sotheby’s succeeded at selling the tape collection for $1.8 million. Unfortunately, Christie’s could not say the same. The Timeline book was expected to go for $7-9 million, but had to be bought back to the owner for $5 million because no bidder reached the minimum price.
Auction Rates: The Swinging Price Tags for Buyers and Sellers
Due to the nature of selling by auction, the prices that each painting, necklace, or mirror goes for varies wildly. Luckily, if you want to determine how much it would cost to be a cosigner or buyer, you can reference a few rules of the auction houses.
Christie’s buyer premium schedule (as of February 2019) has posted new commission rates for its hammer prices. They vary by location and apply to every category except wine, which has a different fee table. What they do all have in common are thresholds attached. For example, in London, buyers will be charged a 25.0% fee on items sold up to £225,000. If the item is worth £3,000,001+, that percentage goes down to 13.5% of the price. This means if you bought a historical masterpiece for the 3 million mark, the fees could add up to a total of about £3.5 million.
Sotheby’s followed suit with its adjusted buyer premiums in February 2019. Their prices are on par with Christie’s in London, placing 25.0% fee for up to £300,000 and 13.9% on £3 million + items. A glance across the board makes the two look like copies- With just a few differences in color and format attached.
In both auction houses, the item’s owner has a “reserve”, or a minimum price they’re willing to sell their lot for. In Christie’s, if the lot doesn’t sell, then they will pay the cosigner the reserve price and become the new owner. If it just sells for less than the reserve, then they will pay the cosigner the difference between their minimum and the hammer price. It’s also worth noting that while cosigners are paid for their lot across all auction houses, they can also have various fees on shipping, insurance, and more, attached.
We recommend checking for how local laws affect auction prices in your area. Especially if you’re in the EU, your purchase of artwork may have royalty fees attached to its artist.
Recent Sales: Pop Culture and Ancient History
As of this month (July 2019), Sotheby’s and Christie’s have made remarkable sales in different areas.
Sotheby’s sold a collection of the rarest sneakers made by Nike, Adidas, and Air Jordans. Canadian Entrepreneur Miles Nadal bought nearly the entire lot for $850,000. The only shoe pair left behind was the 1972 Nike Waffle Racing Flat Moon Shoe, which is expected to sell for $160,000.
Meanwhile, Christie’s sold one of the few statues of King Tut that exist for $6 million. This sale has generated controversy, however. The statue was previously owned by Prince Wilhelm von Thurn and Taxis, who kept it in the 1960s and 1970s before it was sold to a gallery owner in Vienna. The Egyptian government believes that the statue was stolen from the Karnak Temple near the ancient city of Luxor in the 1970s. Christie’s has issued a statement on the situation, noting that they will provide a transparent track of purchases for the future.
The Best Auction House: A Continuous Clash.
As the “duopoly” of auction houses, Christie’s and Sotheby’s only real competition right now is each other.
There is a 3rd auction house in the game. Phillips, which was also founded in the same era in 1796, is known for helping artists spark their careers. It’s a smaller rival, but it has recently talked about emphasizing quality over quantity in its contemporary art department.
Perhaps Sotheby’s and Christie’s will want to say the same, soon.