Sotheby’s goes private

Sotheby’s goes public and the art world goes down a new path. Turning the art world around is like turning around a cruise ship. It turns slowly but it eventually turns.

Publicly traded companies have more transparency, have to make the market happy and in general are managed in a way that makes the shareholders smile.

Art is a major commodity. If you missed the launch of Otis where collectible commodities are becoming democratized pushes all of us to think about these valuables. There are companies built around making galleries and companies like Sotheby’s run more efficiently and of course sell more art such as Arternal. Full disclosed we are invested in both of these companies.

Sotheby’s has so many categories that they auction and sell. Will the prices go up or down with this change? How will each of those independent verticals within Sotheby’s now be operated? Will there be more commerce and less auctions? Will their marketing shift to a new generation?

So many questions. Keep in mind there is also a new slew of young gallery owners including the children of major name brand galleries who are stepping into big roles. I’d love to sit on the new board of Sothebys because I believe it is going to be a really interesting play. Yet taking a company private means you don’t have to have a board. That is kind of the point.

The art world has been slowly moving the past ten years but I predict the next decade the shifts will be a little bit more turbo-charged. The time has come.

Comments (Archived):

  1. LE

    Art is not my thing at all. But from a business perspective I’d call this in short ‘a narcissistic trophy acquisition with potential upside’. It’s similar perhaps when someone acquires a sports team or any trophy organization or entity. It carries a great deal of entree and cache into other things (not for the billionaire who bought it he already has that) but it’s a bonus even for him. Maybe not the same as overpaying to buy a major TV Network but not far off either. I had never heard of that person before today who bought the company. Neither did my mother. But both of us have heard of Sothby’s.What can be done with this?Well you could in theory figure out a way to front run auctions by knowing in advance what art might go to auction. You can expand the brand into other things. You can get a seat at some table simply by way of your ownership and affiliation. As some writers have suggested you can take risks that a public company can’t (and spend money on marketing instead of compliance).Interesting that this article (which I scanned but did not fully read) gives examples of companies that went private such as Dell, Safeway and, Petco. Those are not ‘narcissistic trophy acquisitions’. Sothby’s is a long standing world famous brand.The bad news (if you want to call it that) is that I think the younger generation will care little about these types of entities in the coming years. They will still buy Pet Food (assuming it’s sold in pet stores) but there is a nice chance that they won’t bid up the price of art work so that businesses like this remain viable.

  2. jason wright

    “Keep in mind there is also a new slew of young gallery owners including the children of major name brand galleries who are stepping into big roles.”On merit?

    1. Gotham Gal

      They grew up in those galleries and those galleries are family owned.

      1. jason wright

        Looking at it from afar the industry does appear to be rather incestuous, and as it’s built around ‘art’ i find that to be deeply ironic.