Sotheby’s, a Russian billionaire – and how art becomes millions

When Sotheby’s announced its 2023 results this week, it looked not at the area for which the auction house, founded in 1744, is probably best known, but at a more hidden place on the balance sheet. While auction sales fell slightly to $6.5 billion, income from “private deals” that Sotheby’s arranged for collectors outside the auction room rose by almost 8 percent to $1.2 billion.

This was good timing for Sotheby’s, as the company was acquitted by a New York jury on Tuesday. Sotheby’s is said to be guilty of aiding and abetting fraud in the most controversial private sales case in recent years. Dmitry Rybolovlev, a Russian billionaire, had accused the auction house of helping Swiss art dealer Yves Bouvier overcharge him about $1 billion for works including Leonardo da Vinci’s “Salvator Mundi.”

The auction house was cleared of any wrongdoing because it had only supported Bouvier in purchasing the works and preparing appraisals. But the case, tied to a long-running dispute between the two men, highlights how global auction houses are increasingly drawn into the kind of secretive dealings once reserved for private art galleries and dealers.

Sotheby’s rival Christie’s is even keen for more attention to be paid to the activity as the company looks to further diversify, which Adrien Meyer, global head of private sales at Christie’s, essentially calls “matchmaking.” A billionaire looking for a masterpiece doesn’t have to wait for an auction, but can ask Christie’s to find one in a private collection and approach it discreetly.

Clients change sides of the table

“Auctions are primarily initiated by sellers, private transactions by buyers. It’s a hunting expedition,” says Meyer. This hunt was the service that Sotheby’s originally offered to Bouvier, who in turn sold it to Rybolovlev. Even though this case was explosive and ended up in court, this activity is becoming increasingly common.