Sotheby's to Guarantee Taubman Sale, Shutterstock News, Art Database Battle

Skate's recently posted on several interesting goings on within the art world.  The first is that Sotheby's has mad a $500 million guarantee in order to secure the estate sale of former Chairman, Alfred Taubman.

Shutterstock is going to bring more professional photographers to its platform in an attempt to create more buying interest of its photos.

And, artnet and Artprice are in the middle of an interesting, and hopefully advantageous (for appraisers and art professionals) price and content war. Hopefully users will win out.

Skate's reports
The art business is back to life and this week we saw a flurry of interesting small announcements by some of the companies included in Skate’s Art Stocks Index.

Sotheby’s Discloses $500 Million Guarantee

Sotheby’s filed with the US regulators the current report announcing that it entered into a material transaction to guarantee the sale of an art collection from the estate of its former Chairman, Alfred Taubman. Here is the quote from the filing:

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

On September 2, 2015, Sotheby’s entered into an arrangement with the Estate of A. Alfred Taubman (“the Estate”) under which Sotheby’s will sell works of art from the collection of A. Alfred Taubman at auctions expected to occur primarily in November 2015 and also in early 2016. Robert S. Taubman, a director of the Company, is a trustee and beneficiary of the Estate. The collection is estimated to be worth in excess of $500 million. In connection with this arrangement, Sotheby’s agreed to provide an auction guarantee for the collection at approximately that level. Sotheby’s may reduce its exposure under the auction guarantee by entering into risk and reward sharing arrangements prior to the auctions at which the Estate’s collection is offered.

In his capacity as a director of the Company, Robert S. Taubman played no role in the Board of Director’s consideration or approval of the transaction and the associated Guarantee. As a result of this transaction with the Estate, the Board of Directors has determined that Robert S. Taubman is no longer independent under New York Stock Exchange rules and standards. The Board of Directors will continue to have ten independent directors (out of a total of thirteen).

This is the biggest auction guarantee ever disclosed by Sotheby’s, we’ll be watching closely how this bet will pay off in November.

Shutterstock Moves to Editorialize the Content

As shown by recent successful use of editorial by auctions from Christie’s to Dorotheum to online auctions like artnet, the common wisdom is that to sell more art you need to offer more context and editorial, creating bigger market for art journalism and flooding potential art buyers with content of all sorts from all sides.

Now, Shutterstock adopted this strategy too – the firm announced the hiring of four celebrity photographers Chelsea Lauren, Rob LaTour, Stephen Lovekin, and Andrew H. Walker “to bring the best event photography and celebrity portraiture to the company”. The move is clearly aimed to stimulate more photography sales on Shutterstock platform that currently carries over 60 million in images. Good move.

Price Database War Escalates

The global price database oligopoly of artnet.com and Artprice is under increasing pressure from the free art price database services such as the price archives of auction aggregator platforms like Invaluable and Barnebys, and each of artnet.com AG and Artprice were recently forced to streamline their price lists for database usage and to offer deep discounts to large corporate subscribers.

The French Artprice even went as far as publishing the press release titled “Transparency Drive Concerning Artprice’s and Artnet’s Tariffs and Databases” and even translating it in English (something Artprice never does) to detail the differences in pricing plans for database usage. Artprice’s verdict is: “After a strict comparison of the two price schedules, Artnet’s offer might seem somewhat anachronistic. In the era of the web 2.0, Artnet’s offer is restrictive both in terms of the number of searches you can launch and the contents available. This strategy appears to be ten years behind the times and cannot seriously hope to satisfy users accustomed to unlimited Internet browsing without any volume search limitations.”

Skate’s will update our readers on how far this takes Artprice – last time we checked artnet.com AG was making more from price database than Artprice did (see Skate’s coverage), and both firms were struggling with stagnating growth rates for their price database business.
Source: Skate's 

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