A Dealer Sells Down: The Mnuchin Evening, Mostly as Advertised

Bob Mnuchin spent the first half of his working life running an equities desk at Goldman, Sachs and the second half running a gallery on East Seventy-Eighth Street, and on the evening of 14 May he sold the third half — the part that lived on his own walls — at Sotheby's. The official title was "Collector at Heart," which is the kind of phrase auction-house copy departments produce when the alternative is "Collector for Forty Years and Now in His Nineties." Eleven lots, all sold, a hundred and sixty-six and three-tenths million dollars, no buy-ins to spoil the column. The white glove was issued before the post-sale champagne had quite reached the rear of the room.

The Rothko did what Rothkos do

The headline lot was, of course, the Rothko — Brown and Blacks in Reds, the kind of late-period canvas one is taught not to call a "wall painting" in front of dealers — which hammered $85.8 million on an estimate of seventy-to-one-hundred. In range, slightly above the midpoint, neatly within what the room had been told to expect. Rothkos, when they perform on estimate, perform on estimate; this one performed on estimate.

The second Rothko — No. 1, fifteen-to-twenty — closed at $20.8 million, four per cent over the high. Also unremarkable, also exactly the kind of result the catalogue had hinted at.

If the evening's news had ended with the two Rothkos, the news would have been: dealer sells down, market politely buys, room goes home. The news did not end with the two Rothkos.

Where the dealer's eye really shows

Six of the eleven lots — fifty-five per cent of the card — closed above the high estimate. None of them were the top two. None of them, in fact, were in the top three. The over-high moves came on the second half of the evening: a Willem de Kooning Untitled on a $4–6M estimate hammering $10.8 million (eighty per cent over high); a Miró, Dormeurs réveillés par un oiseau, on three-to-five closing at $6.5 million (+29%); a small Picasso, Deux femmes nues assises, on $0.7–1.0M reaching $1.5 million (+54%).

Read it across all six over-high lots and the pattern is consistent: the smaller the published estimate, the bigger the multiple over high. The weighted mean over-high multiple for the six was approximately +34%; the weighted mean for the same lots if you measure against low estimate was about +72%. The Rothkos were not in this set. Nothing above $20 million was.

There are two ways to read that distribution, and I will permit both into the same paragraph because both are likely true. The first reading is that the market underwrites a dealer's smaller picks at retail and his larger picks at wholesale, which is a polite way of saying that nobody really thinks a $4–6 million de Kooning estimate is a serious number. The second reading is that Sotheby's set conservative estimates on the lower-cap lots specifically so the room could feel virtuous about the over-high pull-ups — a tactic that has, lately, produced excellent press for the houses and excellent multiples for the consignors and identical post-sale phone calls to the underbidders, who would have paid the same in either case. Pick your reading.

The one NO

The single under-low result of the evening, and therefore the only lot on the catalogue that closed beneath the published range, was a John Chamberlain Untitled sculpture on a four-to-six-hundred-thousand estimate that hammered at four hundred thousand exactly — which is to say, beneath the low by a single bid. One can either record this in the Chamberlain market's column as "softness on the small pieces" or one can record it as "this particular lot, on this particular evening, found one bidder rather than two." Both are also probably true.

The math, briefly

Eleven lots, all sold, a sale total of $166.3 million, a sell-through of one hundred per cent, a YES-resolution rate (using the platform's threshold-of-low convention) of ten-of-eleven, or about 91%. The over-high-estimate rate of 55% is the highest of any of the May single-owner-adjacent sales for which we have full data, although it is worth saying out loud that 55% over high on eleven lots is statistically thin gruel — the same rate on 45 lots, which the broader Christie's 20th Century Evening Sale four days later in fact produced, is a louder statement of the same phenomenon.

What we learned about dealers, briefly

Dealers, when they consign their own collections, do not surprise their clients. That is largely the point of being a dealer. What the Mnuchin evening surprised was the auction house, which had estimated the bottom half of the card in a register the room declined to honour. One hundred and sixty-six million is the kind of result that fills the front of the catalog the next time Bob Mnuchin — or his estate, or the dealers his estate retains — wishes to send a picture to auction. Which is, when one thinks about it, the only result a dealer's evening is required to produce.