Wheel and Deal ... in Works of Art Paintings Have Virtually
Doubled in Price in the Last Three Years
By ERIC HORNG - ABC News
Nov. 10, 2006 —
Cosmetics magnate Ronald Lauder recently bought one
for $135 million. Casino king Steve Wynn nearly sold
his for $139 million. And movie and music mogul David
Geffen's fetched $140 million.
For the price of a small company, these masters of the
corporate universe are buying and selling … paintings.
The megarich have always been collectors of art,
but in recent years, a new generation of wealth has
been fueling a red-hot art market.
"Some of these people have four homes,"
said Terri Dodd, editor in chief of American Art Collector
Magazine. "And what do you need? You need art."
On Wednesday night, at Christie's, works by Gustav
Klimt, Paul Gauguin, Egon Schiele, Ernst Ludwig Kirchner,
and others sold for nearly half a billion dollars
to anonymous buyers. It was billed as the biggest
art auction in history and exceeded the hype. "It
was certainly the most amazing sale I've ever taken,"
said Christopher Burge, Christie's honorary chairman
and the evening's auctioneer.
The blockbuster auction came on the heels of other
recent headline-grabbing art sales. Last month, Geffen
sold three paintings for a whopping $283.5 million,
including a Jackson Pollock piece that fetched the
aforementioned $140 million, the highest price ever
paid for a work of art. The buyers were billionaire
Before that, Wynn finalized a $139 million sale of
Pablo Picasso's "Le Reve" when he accidentally
poked a hole in it while showing it off to friends
in Las Vegas. Wynn reportedly released the unnamed
buyer from the deal and now is keeping the work for
If Wynn had sold the painting, the sale would have
broken the record set by Lauder's deal. Despite warnings
two years ago from financial analysts predicting a
downturn in the art market, the boom shows no sign
of going bust.
Works by Picasso and others have almost doubled in
price since 2003, according to Art Market Research,
a leading provider of art indexes. The value of 20th
century pieces, from artists such as Andy Warhol,
Pollock and Willem de Kooning, have been skyrocketing
"Every kind of art is appreciating in value,"
Dodd said. "The everyday paintings that used
to be worth $20,000 are now selling for $40,000."
As a result, Christie's worldwide sales increased
33 percent between 2004 and 2005 to $3.2 billion.
Rival Sotheby's posted $2.75 billion in sales last
year, up from $1.6 billion in 2003. Earlier this year,
a Sotheby's auction brought in a total of $238 million
for impressionist and modern works, its highest total
in 16 years.
Even smaller auction houses, such as Dallas-based
Heritage Auction Galleries, have been seeing significant
gains. Art sales at Heritage, which primarily deals
in collectibles, have doubled since it began auctioning
art two years ago.
"There's a lot of money chasing the finer things
out there," said Heritage founder Steve Ivy.
"There's a lot of wealth out there, a lot of
During the 1980s, a flood of Japanese collectors
entered the art market. Today, priceless works of
art are increasingly ending up in the living rooms
and boardrooms of Russian, Chinese, Indian, and Middle
Eastern collectors, in addition to the megarich Wall
Street investment bankers, Silicon Valley billionaires
and European financiers. Hoping to tap a wellspring
of new buyers, Christie's opened an office earlier
this year in the United Arab Emirates' city of Dubai,
the first international auction house to break ground
in the region.
"For the first time, it's become a truly global
marketplace," said Robert Manley, senior vice
president at Christie's, who credits the Internet
with fueling worldwide interest.
"Before, if you really wanted to learn about
art, you had to go to the art capitals or buy an art
book," Manley said. "Now, you have access
to any artist on the planet, and where they're shown,
and images and their lives." Web auctions have
helped Heritage sell millions of dollars' worth of
art to buyers from more than 100 countries. "There's
demand coming from pretty much every nook and cranny,"
Still, some wonder whether there's a bubble, and whether
it's about to burst. "This is beginning to become
a kind of art market rat race to the top of The New
York Times headlines page," said Whitney May, associate
editor at NY Arts Magazine. "But is there any roof
to this ceiling?" For now, the bidding continues.