Third-party auction deals have made some people very rich—but they may be bad for the market in the long run
I saw this super article from the Art Newspaper that shines a light on this murky corner of the art market.
Third-party guarantees at auction—the art market’s hybrid of a risk hedge and a speculative gamble—are on track to hit an all-time high of around $2.5bn in 2018. On the face of it, guarantees offer a high level of certainty: the auction house secures a consignment and the seller receives a minimum price, whatever the outcome of the sale. But after the 2008 financial crisis, when sales tumbled and in-house guarantees forced auction houses to pay out large sums to consignors, they all but disappeared between 2008 and 2010.