Business
As Art Sales Fall, Christie’s and Sotheby’s Pivot to Luxury
When art works fetch spectacular auction prices, like the record $450.3 million for Leonardo da Vinci’s “Salvator Mundi” in 2017, the world’s focus turns for a moment to the arcane goings-on of the international art trade. But with the market in a downturn for the last two years, there have been few attention-grabbing sales at the world’s two biggest and oldest auction houses, Sotheby’s and Christie’s.
An exception came at November’s marquee auctions of modern and contemporary art in New York, when the world’s media — and social media in particular — were momentarily enthralled by the seeming absurdity of a cryptocurrency investor spending $6.2 million at Sotheby’s for a duct-taped banana. But there is a big difference between $6.2 million and $450.3 million.
Sales at Sotheby’s and Christie’s were down for the second year in a row in 2024, according to preliminary figures released by the companies in December. With both supply and demand for big-ticket art in a slump, the auction houses are making major bets on selling luxury goods and niche experiences to make up the shortfall.
Sotheby’s estimated it would have turned over about $6 billion in auction and private sales by year-end, a decline of 24 percent on 2023. Christie’s announced projected aggregate sales of $5.7 billion, down 6 percent year-on-year. Back in 2022, Sotheby’s and Christie’s posted annual turnover of $8 billion and $8.4 billion.
“The auction houses have major problems,” said Christine Bourron, the chief executive of the London-based company Pi-eX, which analyzes art sale results. “They really need to do some thinking about how they can bring some life into their auction business. People who have an interest in art want to have an experience,” added Bourron, who, like many followers of the auction market, finds both Sotheby’s and Christie’s live and online sales increasingly predictable.
Sotheby’s is owned by the French-Israeli telecoms magnate Patrick Drahi, whose beleaguered Altice group is burdened with $60 billion of debt. Sotheby’s deteriorating performance led the auction house to reach out to Abu Dhabi’s sovereign wealth fund, A.D.Q., for a $1 billion cash-for-equity bailout and to lay off more than 100 employees in December. This followed some costly infrastructure decisions: Sotheby’s $100-million purchase of the Breuer Building in New York’s Madison Avenue, the opening of a new headquarters in Paris and the development of a futuristic exhibition and retail space in Hong Kong.
Sotheby’s website now abounds with opportunities to buy pre-owned luxury items at auction or by “instant purchase,” as if in a store, ranging from real estate, classic cars and dinosaur fossils, to smaller prestige collectibles like designer handbags, jewelry, fine wines and game-worn N.B.A. jerseys.
Josh Pullan, Sotheby’s global head of luxury, said sales of such goods draw in wealthy clients who may, in time, start to buy high-end art. “Luxury categories are for us a vital gateway for new, often younger, collectors,” he added.
Last year, luxury generated about 33 percent of sales at Sotheby’s, compared with 16 percent at Christie’s, according to the companies’ communications teams. But the category attracted more buyers than art did.
Guillaume Cerutti, the chief executive of Christie’s, spoke to reporters last month during an end-of-year media call. “Luxury has an advantage, because of the model and the price points,” he said. “Luxury and art will merge with each other,” he added, hinting at future synergies of presentation and categorization.
Christie’s is owned by the luxury goods billionaire François-Henri Pinault, whose Kering conglomerate has also been hit by flagging sales. After introducing handbag auctions back in 2014, Christie’s is now having to catch up with Sotheby’s offering of luxury items and trophy collectibles, like dinosaur skeletons. In September, Christie’s announced that it had reached an agreement to acquire the California-based classic car auctioneers Gooding & Co., setting up a rivalry with Sotheby’s car business, RM Sotheby’s, which last year turned over $887 million in classic auto sales.
“The luxury resale market presents a compelling opportunity for auction houses,” said Daniel Langer, a professor of luxury strategy at Pepperdine University in Malibu, Calif. “Storytelling is a critical success factor in the luxury industry. Auction houses excel in this area — take the recent banana auction as an example,” he added. Sotheby’s marketing, like that of a luxury brand, had skilfully woven a narrative around the sensation that the banana sculpture, by the Italian artist Maurizio Cattelan, created when first exhibited at the Art Basel Miami Beach fair in 2019.
However, this opportunity comes with “significant challenges,” according to Langer. He pointed out that unlike luxury brands, auction houses don’t produce and price all of their own inventory; profit margins on new luxury items are often much higher than their resold equivalents; and unlike conglomerates such as LVMH and Kering, auction houses can’t scale their transactions through a network of retail outlets. These disparities between retail and resale “could limit the overall financial impact of luxury for auction houses,” he said.
Changing spending patterns among the wealthy could also affect demand.
Global sales of luxury flatlined in 2024 for the first time since 2008 (excluding 2020, during the coronavirus pandemic), according to a recent report by the management consultants Bain & Co. The report’s authors said consumers were prioritizing “experiences over products” in these uncertain times and that the luxury goods market, rather like the art market, is suffering from buyer fatigue.
“The super-wealthy in their 30s, 40s and 50s are spending their money on luxury experiences,” said Doug Woodham, a former Christie’s executive who now advises on art-related finance. “That’s money that isn’t being spent on a Matisse drawing,” he added.
“With superluxury experiences, the social cache is so much higher,” said Woodham, who pioneered handbag sales at Christie’s in 2014. “For half a million dollars I can have my 10 best friends on a lavish yacht. They will remember that more than sitting in my house with a Rothko on the wall.”
The global luxury yacht charter market grew to an all-time high of $16.3 billion in 2024, a 6 percent increase on the previous year, according to the Business Research Company. It said that growth has been driven by the popularity of “exclusive and exotic travel destinations” and the “ongoing trend towards experiential luxury.”
In September, Sotheby’s collaborated with the Marriott International hotel chain and the fashion house Alexander McQueen to offer a sealed bid auction, in which bidders can’t see the rival offers. The winner got a two-night stay one of the group’s 5-star London sites as part of an experience that the Sotheby’s website said would “transport guests to where a teenaged McQueen first learned the art of tailoring.” Also included were a five-course fine-dining meal for two, a bespoke tour of London with a private visit to the Victoria & Albert Museum and a personalized photo session with Ann Ray, a longtime McQueen collaborator. Classifying the auction as a private sale, Sotheby’s declined to reveal how much the winning bidder paid for this unique luxury experience, but the presale estimate was $12,000 to $18,000.
Could selling memories, instead of art, be the future of the auction business?
Business
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Business
Civil case against Alec Baldwin, ‘Rust’ movie producers advances toward a trial
Nearly two years after actor Alec Baldwin was cleared of criminal charges in the “Rust” movie shooting death, a long simmering civil negligence case is inching toward a trial this fall.
On Friday, a Los Angeles Superior Court judge denied a summary judgment motion requested by the film producers Rust Movie Productions LLC, as well as actor-producer Baldwin and his firm El Dorado Pictures to dismiss the case.
During a hearing, Superior Court Judge Maurice Leiter set an Oct. 12 trial date.
The negligence suit was brought more than four years ago by Serge Svetnoy, who served as the chief lighting technician on the problem-plagued western film. Svetnoy was close friends with cinematographer Halyna Hutchins and held her in his arms as she lay dying on the floor of the New Mexico movie set. Baldwin’s firearm had discharged, launching a .45 caliber bullet, which struck and killed her.
The Bonanza Creek Ranch in Santa Fe, N.M. in 2021.
(Jae C. Hong / Associated Press)
Svetnoy was the first crew member of the ill-fated western to bring a lawsuit against the producers, alleging they were negligent in Hutchins’ October 2021 death. He maintains he has suffered trauma in the years since. In addition to negligence, his lawsuit also accuses the producers of intentional infliction of emotional distress.
Prosecutors dropped criminal charges against Baldwin, who has long maintained he was not responsible for Hutchins’ death.
“We are pleased with the Court’s decision denying the motions for summary judgment filed by Rust Movie Productions and Mr. Baldwin,” lawyers Gary Dordick and John Upton, who represent Svetnoy, said in a statement following the hearing. “He looks forward to finally having his day in court on this long-pending matter.”
The judge denied the defendants’ request to dismiss the negligence, emotional distress and punitive damages claims. One count directed at Baldwin, alleging assault, was dropped.
Svetnoy has said the bullet whizzed past his head and “narrowly missed him,” according to the gaffer’s suit.
Attorneys representing Baldwin and the producers were not immediately available for comment.
Svetnoy and Hutchins had been friends for more than five years and worked together on nine film productions. Both were immigrants from Ukraine, and they spent holidays together with their families.
On Oct. 21, 2021, he was helping prepare for an afternoon of filming in a wooden church on Bonanza Creek Ranch. Hutchins was conversing with Baldwin to set up a camera angle that Hutchins wanted to depict: a close-up image of the barrel of Baldwin’s revolver.
The day had been chaotic because Hutchins’ union camera crew had walked off the set to protest the lack of nearby housing and previous alleged safety violations with the firearms on the set.
Instead of postponing filming to resolve the labor dispute, producers pushed forward, crew members alleged.
New Mexico prosecutors prevailed in a criminal case against the armorer, Hannah Gutierrez, in March 2024. She served more than a year in a state women’s prison for her involuntary manslaughter conviction before being released last year.
Baldwin faced a similar charge, but the case against him unraveled spectacularly.
On the second day of his July 2024 trial, his criminal defense attorneys — Luke Nikas and Alex Spiro — presented evidence that prosecutors and sheriff’s deputies withheld evidence that may have helped his defense . The judge was furious, setting Baldwin free.
Variety first reported on Friday’s court action.
Business
California’s gas prices push Uber and Lyft drivers off the road
The highest gas prices in the country are making it tougher for some gig drivers to make a living.
Gas prices have shot up amid the war in the Middle East. On average, California gas prices are the most expensive in the United States, according to data from the American Automobile Assn. The average price of regular gas in California is almost $6. The national average is a little above $4.
While Uber and Lyft drivers have concocted clever ways to cut gas consumption, they say that without some relief they will be forced to leave the ride-hailing business.
John Mejia was already struggling to make money as a part-time Lyft driver when soaring gas prices made his side hustle even harder.
“Unfortunately, it’s the economics of paying less to drivers and gas prices,” he said. “It actually is pulling people out of the business.”
Guests at The Westin St. Francis hotel get into an Uber.
(Jess Lynn Goss / For The Times)
Gig work offers drivers the freedom to work for themselves and more flexibility, but being independent contractors also means they must shoulder unexpected costs.
Ride-sharing companies say they’re trying to help, but drivers say the gas relief comes with caveats. For now, drivers say they’re being pickier about what rides they accept, cutting hours and are looking at other ways to make money.
Mejia, who started driving for Lyft more than a decade ago, said in his early days, he would sometimes make $400 in three hours. Now it takes 12 hours to rake in $200.
The San Francisco Bay Area consultant is an active member of the California Gig Workers Union, so he knows he isn’t alone. California has more than 800,000 gig rideshare drivers, according to the group, which is affiliated with the Service Employees International Union.
On social media sites such as Reddit and Facebook, gig workers have posted about how the higher gas prices are eating into their earnings. Among the tricks they are suggesting: reducing the number of times the ignition is turned on or off, avoiding traffic, working in specific neighborhoods and at times with high demand and switching to electric vehicles.
Gig drivers usually have only seconds to decide whether to accept a ride on the app, but they have become more strategic about which rides and deliveries they accept.
That means they are more likely to sit back in their cars and wait for higher fares for quick pick-up and drop-off.
“I highly recommend the ‘decline and recline’ strategy, rejecting unprofitable rides until a better one appears,” wrote Sergio Avedian, a driver, in the popular blog the Rideshare Guy.
Pedestrians cross the street in front of a Lyft and Uber driver on Wednesday. High gas prices have made it hard for gig drivers to make a living, cutting into their profits.
(Jess Lynn Goss / For The Times)
Uber, Lyft and other companies have unveiled several ways to help drivers save on gas.
Uber said drivers can get up to 15% cash back through May 26 with the Uber Pro card, a business debit Mastercard for drivers and couriers. Based on a worker’s tier, they can get up to $1 off per gallon of gas through Upside — an app that offers cash rewards — and up to 21 cents off per gallon of gas with Shell Fuel Rewards. The company also offers incentives for drivers who want to switch to electric vehicles.
“We know the price of gas is top of mind for many rideshare and delivery drivers across the country right now,” Uber said in a blog post about its gas savings efforts.
Lyft also said it’s expanding gas relief through May 26 because the company knows that the extra cost “hits hardest for drivers who depend on driving for their income.”
The company is offering more cash back, depending on the driver’s tier, for drivers who use a Lyft Direct business debit card to pay for gas at eligible gas stations. They can get an additional 14 cents per gallon off through Upside.
Drivers say the fine print on the offers dictates which card they use and where they fill up gas, making it difficult for them to save money.
“If I do the math, it’s ridiculous,” Mejia said. “They’re offering us nothing.”
Uber declined to comment, but pointed to its blog post about the gas relief efforts. Lyft also referenced the blog post and said “the gas savings were structured through rewards to maximize stackable opportunities.”
Guests at The Westin St. Francis hotel get into an Uber.
(Jess Lynn Goss / For The Times)
Gig workers have struggled with rising gas prices in the past.
In 2022, Lyft and Uber temporarily added a surcharge to their fares amid record-high gas prices following Russia’s invasion of Ukraine. This year, Uber is adding a fuel charge to its fares in Australia for roughly two months to offset the high cost of gas for drivers. Lyft said it hasn’t added a fuel charge in the U.S. or elsewhere.
Margarita Penalosa, who drives full time for Uber and Lyft in Los Angeles, started as a rideshare driver in 2017. Back then, gas was cheaper. She would easily hit her goal of making $300 in eight hours. Now she’s making just $250 after working as much as 14 hours.
Gas prices, she said, used to be less than $3 per gallon. Now some gas stations are charging more than $8 per gallon.
“Take out the gas. Take out the mileage from my car and maintenance. How much [do] I really make? Probably I get $11 for an hour,” she said.
Jonathan Tipton Meyers wants to spend fewer hours as a rideshare driver.
He already juggles multiple gigs even while driving for Uber and Lyft in Los Angeles. He’s a mobile notary and loan signing agent, a writer and performer.
Driving is “a very challenging, full-time job,” he said. “It’s very taxing and, of course, wages were just continually decreasing.”
John Mejia, a longtime Lyft and Uber driver, poses for a portrait before attending a meeting about unionizing gig drivers.
(Jess Lynn Goss / For The Times)
Even if oil continues to flow through the Strait of Hormuz, which Iran reopened Friday, it could take a while for gas prices to come down to earth, said Mark Zandi, the chief economist at Moody’s Analytics.
“There’s an old adage that prices rise like a rocket and fall like a feather,” he said. “I think that’ll apply.”
In the meantime, it will be survival of the fittest drivers. If enough of them decide to leave the apps, the ride-hailing companies could be forced to raise fares further to attract some back.
“Those who approach rideshare driving strategically, tracking expenses, choosing trips carefully, and optimizing efficiency are far more likely to weather periods of high gas prices,” wrote Avedian in the Rideshare Guy blog. “For everyone else, a spike at the pump can quickly turn rideshare driving from a side hustle into a money-losing venture.”
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