Auction-House Cryptography: What the "∆□OV" Are These Crazy Symbols?

It's the beginning of New York's big auction season, art-lings, and lots more than the lots is at stake. Just remember that in these financially challenging times, anything short of a bloodbath will be touted as evidence that there's still some money around for quality art. The auction houses have reportedly been hammering down consignors' expectations in an attempt to lower reserves to price levels that someone will find attractive. They have to make sure that the buy-in total doesn't look more robust than the sold total, or else the auction block will start looking like a chopping block.

If the market does take a post-bubble bath, auction-house officials will be quick to tell us that prices are returning to more realistic levels and that great opportunities abound for savvy buyers who still have some discretionary bucks. (Does anyone know if Warren Buffett craves Malevich?) My guess is that the auction houses and dealers have too much at stake to permit an unmitigated disaster, but prices will likely become more "reasonable," as the euphemism goes. Comparing presale estimates with hammer prices will give us some sense of where things now stand.

There's a lot more going on behind the scenes, however, than mere adjustment of reserves. To be a true auction-ologist, you'll need to attend CultureGrrl Class to learn the new, arcane code:

Last week, students, I introduced you to this: . Repeat after me: "Irrevocable Guarantee."

This symbol debuted in the catalogue entry for Malevich's 1916 "Suprematist Composition," estimated to bring the highest price, "in excess of $60 million," at Sotheby's auction tonight of Impressonist/modern works. (You can watch it live, beginning at 7 p.m., here.) That lucky horseshoe also appears for James Rosenquist's "In the Red," estimated at a mere $1.2-$1.6 million at Sotheby's contemporary sale, Nov. 11.

So what does it all mean? It's a promise by an outside third party (such as a dealer or collector) to place a bid for the designated work at a predetermined amount. If the price goes higher and someone else buys the work, the Irrevocable One gets to share in the amount above the level of his promised bid. This goes a step further than third-party guarantees, which did not always (but sometimes did) involve a promise to actually place a bid at the sale. Sotheby's used to lump irrevocable bids and third-party guarantees under the same "O" symbol that designated all guarantees, whether offered by the auction house and/or third parties.

The advantage (to both the seller and auction house) of this irrevocability is that it secures someone's definite commitment to place a bid "at a value that ensures that the lot will sell," as Diana Phillips, Sotheby's director of press and corporate affairs, explained it to me. In other words, the highest-estimated work at Sotheby's sale tonight will definitely sell.

Now, let's tackle this one: V.

This, auction-ologists, is Sotheby's new symbol for lots that may receive bids from "interested parties" (previously announced at the beginning of the sale, but not designated in the catalogue). Who are these people? The expanding "Symbol Key" at the back catalogue describes them as "parties with a direct or indirect interest in the lot [who] may be bidding on the lot, including the beneficiary of an estate selling the lot, or the joint owner of a lot....In certain instances, interested parties may have knowledge of the reserve."

In other words, the auction house's level playing field is somewhat tilted. There's another word that's previously been used to describe someone with an ownership interest in an object who secretly bids up its price---"shill."

Phillips wrote this in response to my query:

You are correct that as a general rule we do not allow consignors to bid. There are, however, instances in which a consignor may be allowed to bid, such as a joint owner of property, and in such instances we disclose that person's participation in the sale through either the interested party symbol or a pre-lot announcement.

And let's not forget "∆," which at both Sotheby's and Christie's means that the auction house itself has an ownership interest in the lot.

Sotheby's deserves credit for trying to make its murky practices more transparent through increased disclosure in its catalogue. Christie's as yet hasn't felt the need for new and inventive symbols, lumping all manner of guarantees under the "O" sign. The symbols themselves, in Christie's back-of-the-catalogue explanation of what they all mean, have dwindled in font to near invisibility. Sotheby's explanatory text, by contrast, is a model of readability.

But transparency aside, whatever happened to auctioneers' time-honored role as impartial brokers between buyers and sellers? With all the behind-the-scenes machinations and complications of the bidding process, it will be hard to know exactly what to make of the prices achieved tonight.