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| Francis Bacon's piece on his friend, Lucian Freud, became the most expensive artwork ever sold in auction |
The Reason Why
Francis Bacon's 'Lucian Freud'
Is Worth $142 Million
While the world is scratching its head as it tries to digest the $142
million price tag slapped on Francis Bacon’s “Three Studies of Lucian Freud” at
Tuesday night’s post-war and contemporary auction in Christie’s New York
headquarters, the writing appears to have been on the wall for quite some
time. As the ultra-wealthy become even wealthier, the top-end of the art
market, along with real estate and other luxury sectors, have experienced an
incredible surge as cash is being channeled into alternative investments.
Add the rarity of the piece, and the performance of the contemporary art
market, and you have the recipe for a global record.
After about six minutes of “fierce” bidding, as a spokesperson for
Christie’s put it, several bidders had taken the value of Bacon’s triptych from
approximately $80 million, where it opened, to a final price of $127
million. After auctioneer Juri Pylkkanen hammered down the piece, the art
world was left with a new auction record, with Bacon’s piece dethroning Edvard
Munch’s “The Scream,” which sold last year at Sotheby’s for $120 million.
The total value of the auction also marked a new record, grossing $691.6
million and leaving in the dust none other than Christie’s’ last blockbuster
evening sale held in May which
fetched $495 million. Three pieces sold for more than $50 million, with
11 pricing in north of $20 million, with a Jeff Koons and a Warhol going for
nearly $60 million each.
The figures are astronomical, yet that wasn’t unexpected, according to
Thomas Galbraith of online auction house Paddle8. “This is consistent
with what we’ve been seeing the market doing,” Galbraith explains. “Three
Studies of Lucian Freud” won its place as the world’s most expensive artwork given
a confluence of factors, from the intrinsic value of the work itself to the
state of the market.
“Bacon has a relatively small body of work, he wasn’t nearly as prolific
as someone like Picasso,” Katherine Markley, artnet’s lead market analyst,
said. While there were seven pieces by Andy Warhol up for grabs during
Tuesday’s auction, “only 10 Bacon lots have come to auction in 2013,” Markley
added.
Furthermore, the piece has a sort of intrinsic, yet subjective, value
given its importance from an historical perspective. “The subject matter
is very important for the Bacon market given the well documented camaraderie
and rivalry he had with Lucian Freud,” Galbraith notes. Given the rarity
of the piece, the auction house will also feed the PR machine, drawing a crowd
of clients and observers that creates a feedback loop that reinforces the
importance of the auction and the piece, evidenced by the completely packed
room at Christie’s on Tuesday.
Another major factor is the wind that has been blowing behind the
contemporary market’s sales over the past decade. From total sales of
about $850 million in 2002, the contemporary sector has skyrocketed to about $6
billion last year, artnet’s
data shows. This
has happened at the expense of the impressionist and modern market, as less and
less top-tier pieces come to market. Munch’s “Scream” was one of the
major works of the modern and impressionist age, allowing it to become the most
valuable auction sale last year, despite the rise of the contemporary market.
The final, and possibly most important factor is the rise of the
mega-rich. “Since the recession, the wealthy appear to be becoming even
wealthier, while middle class wages are more stagnant,” said Galbraith, who
notes this is apparent in the art market where the high-end is experiencing
more activity. “The ultra high net worth and the newly wealthy are looking
to get into the art market,” said Markley, who notes contemporary art is
accessible and acts well as a status symbol. If the Forbes 400 is any
indication, the wealthy
are getting wealthier, with the
400 richest Americans now worth a cumulative $2 trillion, up $300 billion from
a year ago and with an average net worth of a record $5 billion, an $800
million increase from a year ago.
The luxury market is firing on all cylinders, as Manhattan real estate
brokers can attest to. This is very clear when one looks at global art
markets, particularly at the high end in New York and London, and beyond.
Bacon’s record piece is but one more example of this “new era” that many are calling a bubble. Yet, as long
as the rich continue to get richer, there doesn’t appear to be any indication
this trend will reverse itself.
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