Inside the auction business at Sotheby’s
Sotheby’s traces its history to 1744, when London bookseller Samuel Baker held an auction of a library of books. For much of its first century, the firm mostly sold books and manuscripts. It moved into fine art in the 20th century and opened in New York after World War II.
How auction houses make money
Auction houses earn fees from both sides. Sellers pay a commission, and buyers pay a “buyer’s premium” on top of the hammer price. The biggest sales, often held in New York in May and November, can bring in hundreds of millions of dollars in a single evening.
To win major consignments, houses sometimes guarantee sellers a minimum price, which brings risk if a work does not sell.
Ownership changes
Sotheby’s was publicly traded for decades. In 2019 it was bought by French-Israeli telecom billionaire Patrick Drahi for about $3.7 billion and taken private.
In 2023 Sotheby’s agreed to buy the Breuer building on Madison Avenue, the former home of the Whitney Museum, as its New York headquarters.
The art market
Auction results are a closely watched measure of the art market. After record years in 2021 and 2022, sales slowed as wealthy buyers grew more cautious. Sotheby’s and its rival Christie’s have expanded into private sales, luxury goods and online auctions to steady their business.
