BusinessDaily-20221216

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S… Speaker 3 (BusinessDaily-20221216)

Hello and welcome to Business Daily from the BBC World Service, the business podcast which brings you the trends, the money and the people who make the world and its money go round. Podcasts from the BBC World Service are supported by advertising. World Football in Qatar is the podcast taking you behind the scenes with all 32 teams at the World Cup. We're hearing from the players, the fans and people in Qatar, telling the truly global story of the competition.

0:29

S… Speaker 2 (BusinessDaily-20221216)

That's World Football in Qatar from the BBC World Service. Find it wherever you get your BBC podcasts. Have you ever been to an auction? Well, I haven't, but they do intrigue me. I imagine it would be fun to hold up a paddle down the back of a crowded room and dramatically outbid somebody with a flick of a wrist. One of my favourite auction scenes is in the 1996 film First Wives Club.

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S… Speaker 2 (BusinessDaily-20221216)

Sarah Jessica Parker plays a husband stealer and social climber. I'm saying that with air quotes, by the way.

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S… Speaker 2 (BusinessDaily-20221216)

who tries to buy her way into the New York High Society at a Christie's auction. Bette Midler and Goldie Hawn's characters play fake bidders that drive up the auction sale price to ensure Parker's character pays way more than she should. If you haven't seen it, it's a pretty good movie. But as tense as it gets for the bidders, what's it like for the auctioneers with the gavel?

1:33

S… Speaker 2 (BusinessDaily-20221216)

Do they even use a gavel in real life? And who's buying all these expensive art collections anyway? Going once, going twice. Actually, don't go anywhere, because we're going to go behind the scenes of some of the world's biggest auction houses and find out how it all works.

1:57

S… Speaker 2 (BusinessDaily-20221216)

From the BBC World Service, I'm Leanna Byrne and this is Business Daily. And welcome to the last episode of our Money Job series, where I've been speaking to people doing those high-value, high-transaction jobs you might read about, see on the TV or are glamorised in films.

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S… Speaker 2 (BusinessDaily-20221216)

I speak to the real people in these industries and find out how it all really works and what it's like to make your living in these jobs. This is episode five, Inside the Auction House. And this one's all about what it's like selling some of the most expensive things to buy in the world.

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S… Speaker 2 (BusinessDaily-20221216)

As I mentioned earlier, we always think the drama of the auction house comes from the people bidding, the people with the paddles or the person in the corner on their phone getting instructions from their presumably very rich client. But actually, there's more than one point of view when it comes to auctions. So let's start outside the room and go to the auction house itself.

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S… Speaker 1 (BusinessDaily-20221216)

Founded in London in 1793, Bonham's auctioneers are one of the oldest and well-known auction houses in the world. It operates all over the world with 14 auction rooms in the main cities, Hong Kong, Los Angeles, New York, Paris, London, of course, around the globe. And it actually has clients virtually in every country of the world.

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S… Speaker 2 (BusinessDaily-20221216)

That's Bruno Vinci Guerra, chief executive of Bonhams. When I think of auctions, I always imagine that what they're selling is always modern or rare artwork that fetch a cool couple of million. But Bruno says, sure, sometimes, but that's actually not always the case.

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S… Speaker 1 (BusinessDaily-20221216)

We bring objects that collectors are passionate, interested in, in all genres of human creativity, ranging from cars to Picasso paintings to rugs to new items like watches or even digital football player cards like the Cristiano Ronaldo card we sold a few months ago for half a million dollars.

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S… Speaker 1 (BusinessDaily-20221216)

diverse.

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S… Speaker 1 (BusinessDaily-20221216)

Overall, our sales last year counted for about $800 million. So that is the volume of business we proceed for our clients. And the price points we reach vary immensely. We can sell, we've sold an extraordinary Marie Therese portrait by Picasso for almost $10 million last year. But we also sell items of lesser value, but great.

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S… Speaker 1 (BusinessDaily-20221216)

historical or cultural importance. Like, for example, we sold the library of Ruth Bates Ginsburg, the famous Supreme Court judge in the U.S., and in there there were some items at $100, but the passion for the collection was immense.

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S… Speaker 1 (BusinessDaily-20221216)

She represented an icon of the development of civil rights in the US and in particular of women's rights. Owning a book that was part of RBG, as she's called in the US library, was a very important moment and many people connected and paid action. What I've always wanted to know, though, is how do these auctioneers determine what's worth auctioning off and what's not? Generically, there are a few factors that matter.

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S… Speaker 1 (BusinessDaily-20221216)

One is rarity, how unique and how rare the object is. Another one is provenance. Where does it come from? Does it come from a very established, very prestigious collection?

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S… Speaker 1 (BusinessDaily-20221216)

Or sometimes from a celebrity, sometimes we sell the belongings of celebrities that talk to the people and whether it is like a famous actor of the 60s, the whom, whose we sell the car of and people.

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S… Speaker 1 (BusinessDaily-20221216)

identified with the movies they've seen in their EOS and they're willing to pay an extraordinary price to drive the car of that actor. So it could be provenance in the sense of where it comes from and who owned it. It could be rarity. And then you have some more specific criteria like importance. Is the painting, for example, important in the story of this artist and in the career of this artist and condition of Houston?

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S… Speaker 1 (BusinessDaily-20221216)

What is the condition of the object? So those are the factors. Then, once you say that, I would say anything goes. We've sold a curtain.

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S… Speaker 1 (BusinessDaily-20221216)

for more than a million dollars, which has been designed by Chagall and was actually the curtain behind the magic flutes at the Metropolitan Opera in New York. We sold, of course, paintings for several millions of dollars, but they include Fragonard, the French painter, and to Picasso or to Fujita, who, as you know, is a Japanese artist of the 20th century.

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S… Speaker 1 (BusinessDaily-20221216)

The last point, which I think is very important in the world we live in and with the globalization of the world, is global appeal.

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S… Speaker 1 (BusinessDaily-20221216)

What makes a big difference between the prices achieved by works of art or objects of any nature is how global the demand is. And that's how you've seen extraordinary prices fetched by Warhol or Picasso, for example, if I talk about art, or Ferrari, if we talk about cars, because those brands and artists have a global appeal.

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S… Speaker 2 (BusinessDaily-20221216)

Now we're more informed about the internal workings of an auction house, what is it like being an auctioneer? Let's talk to Jenny Locke. She's head of business development and operations at Polly Auction House, Hong Kong. It was actually by coincidence that I became an auctioneer. To be honest, I started off as being...

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S… Speaker 3 (BusinessDaily-20221216)

in the law industry. So I did my undergraduate as law anthropology in London School of Economics. Our family, to be honest, is a more traditional family. So that's why they thought like being in an art industry is not something good to a girl. So they would like me to go to dig into maybe perhaps finance or like law.

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S… Speaker 3 (BusinessDaily-20221216)

or even like other business opportunities. But obviously, after my graduation, and I told my dad, and I was like, oh, I'm really not into this law aspect. So give me three months, I will try to explore what I like. And I came across this opportunity working as an internship at Sotheby's. So after working in that auction house, I felt like, oh, this is actually really something I enjoy. Looking at so many magnificent work, especially in like fine art, I eventually got it.

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S… Speaker 3 (BusinessDaily-20221216)

other opportunity because uh our family will actually buy artworks ourselves so i went to poly auction hong kong preview once and we attended the auction as well and i realized that oh there's a job vacancy as well and poly auction hong kong and i was started off as being an administrator for the modern and contemporary art department so i started off as a admin and worked my way off

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S… Speaker 2 (BusinessDaily-20221216)

And now I'm the head of business development and operations for the company. I'm really curious to know what it's like standing up there and taking these bids. Jenny says it's pretty full on. Actually, it can be really exciting. I started auctioning the wine auction.

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S… Speaker 3 (BusinessDaily-20221216)

so actually for a wine auction uh the prices will be relatively low compared to perhaps like contemporary art department or chinese ceramics department so this is my first trial as being an auctioneer on stage and i think of course like being an auctioneer is not an easy job because uh i don't think the majority public actually see how much effort would put into each cell we need to manage the atmosphere

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S… Speaker 2 (BusinessDaily-20221216)

Yeah, we need to be able to react to a sudden occurrence. For example, like when we, because normally when we go, before we go on stage, we will get the auctioneer book and we will have written some of the telephone biddings or there will be like live biddings. But then obviously when it comes to a real auction, it might not happen. So there might be times when like no one is actually bidding for.

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S… Speaker 2 (BusinessDaily-20221216)

this lot. But then on your auctioneer book, you were trying to assume that there's going to be like three telephone bidding. So you will still have to remain very calm and try to push the people to call for the first bid.

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S… Speaker 2 (BusinessDaily-20221216)

before going up on stage we will have to communicate with each department to go through each lot for their pronunciation of the words for example some of the chinese words is very difficult to pronounce so we have to do a lot of work on that to prepare to get some preparation before the auction and also when we are waiting for people to actually give us bits maybe we will have to give more descriptions of the lot so we will have to write that and prepare that before the before the sale and obviously being an auctioneer we have to be showing our most

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S… Speaker 2 (BusinessDaily-20221216)

charming, funny, and entertaining all the other audiences because each of the sales might take normally three to four hours. So it will be very dull and very boring. Basically, you have to make the atmosphere to become very exciting. So all the spotlight is actually on you.

11:19

S… Speaker 2 (BusinessDaily-20221216)

So it's not that easy task for being an auctioneer, I would say. Yeah, no, that's really interesting. I didn't know all of that all went into it. And you're right. They do go on for so long. Yeah. And some of our... So normally when we go on stage, before we go on stage, we will try not to drink a lot of water because we don't want to pause the auction and be like, oh, excuse me, I want to be...

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S… Speaker 2 (BusinessDaily-20221216)

want to go to the toilet so please excuse me so this is one of the jokes as well when when we will tell when we will share among us uh as auctioneers because in-house we actually have a few auctioneers so it's not just me so we will be sharing our experiences as well because some of us might have uh different habits for example like one of our auctioneer she loves to take off her shoes before going up on the podium

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S… Speaker 2 (BusinessDaily-20221216)

So she actually felt like she's grounded to the ground. So she will feel more secure. And one of our other guy, like before he go up on stage, he will actually maybe take a few shots of whiskey to actually calm him down. So these are like quite interesting points that each auctioneer will have their different habits before they go up onto the podium.

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S… Speaker 1 (BusinessDaily-20221216)

There you have it. Maybe there needs to be a movie where the main character is the auctioneer, not the person waving a paddle. But that brings me to the final point of view I want to explore. The bitters. Kelly Crowe is staff reporter for the Wall Street Journal covering, in the words of her Twitter bio, the wild and woolly art market. Her point of view is important because for the past 16 years, she's been to some of the most high-profile and high-priced auctions in the world. So...

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S… Speaker 1 (BusinessDaily-20221216)

What's it like watching these bids come in?

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S… Speaker 3 (BusinessDaily-20221216)

You know, it can be pure theater, and it can be pure adrenaline, and then it can also be just dull as rocks. It sort of ebbs and flows depending on how committed the audience is, you know, to compete for the pictures, you know, up there on the turntable. I have bought a clipboard and tend to cover these things like a sports announcer, right? So I have my little crib sheet with all of the different widgets that I want to track because so much is not disclosed.

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S… Speaker 3 (BusinessDaily-20221216)

Right. So you want to get the you want to get a sense of the depth of the bidding. You want to try to understand where the bidding is coming from. Is it on the phone? Is it in the room? If it's in the room, that's why it's fun to be there. So you can actually spot the dealers or the advisors or the collectors sort of raising their paddles. But, you know, typically the bids are somewhat discreet. And so there's a little bit of a hunt to sort of figure out who's bidding. And maybe it's with, you know, the flick of a pen or just a very subtle nod or.

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S… Speaker 3 (BusinessDaily-20221216)

There's lots of little fun ways to try to detect who could be bidding in the room. And, you know, we kind of crane our necks, you know, all around in the in the in the press area to try to figure out who's bidding on the phone. It's also kind of a little bit of a shell game because certain specialists are known to represent parts of the world. But sometimes the auction houses will.

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S… Speaker 3 (BusinessDaily-20221216)

you know, switch that up during the heyday of the Chinese bidding. Often, you know, folks who were not based in Asia were fielding some of those monster bids just to sort of throw the scent off the hunt. And so a lot of that's just, you know, it's so opaque and theatrical, but ultimately people do want to know who's selling and who's buying these masterpieces. Yeah, I think it's...

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S… Speaker 1 (BusinessDaily-20221216)

The secrecy sometimes, though, that intrigues people, you know, who owns these art collections and who's buying them? Yeah, I think one of the biggest misconceptions really is just how small and cloistered and interconnected.

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S… Speaker 2 (BusinessDaily-20221216)

the very high-end art world really is. I mean, when you're talking, you know, the number of people who can and do buy $10 million paintings and more, right, you're really looking at about 300 or 400 people around the planet. And so although these prices, you know, the prices for the most expensive Picasso do sort of trickle down and ratchet and recalibrate prices for Picassos.

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S… Speaker 2 (BusinessDaily-20221216)

all the way down the line right it may affect the work on paper that your grandmother has if she's lucky enough to have you know i mean it does sort of trickle down but really at the top that air is pretty thin and the coterie of people who move through that space really do

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S… Speaker 2 (BusinessDaily-20221216)

perhaps love art, but also at that price, it's definitely an investment, right? So that's why you get so many of these hedge fund guys, sort of titans of industry, inherited wealth who are really sort of moving through that space because they can afford to do it and most of us can't, right? So there's a little bit of like a, you know, in the same way that we, you know, watch sovereign nations or royal families or in the past, you know, they love merchant.

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S… Speaker 3 (BusinessDaily-20221216)

merchant princes and kings. I mean, there's sort of this ethereal air of like, wow, I wonder what it'd be like to own these things and sell them. Another great thing about Callie is she's been tracking the unstoppable rise of the art market since she started covering this beat back in 2006. That was only a few years before the financial crisis. The question is, why does the art market remain resilient even when the economy around it is struggling?

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S… Speaker 2 (BusinessDaily-20221216)

They're largely insulated from a lot of the vagaries of other marketplaces because they just move through different money patterns. A lot of them have lost money and regained it, but it's an airy sort of realm to be in and totally disconnected from mom and pop. Even when Lehman Brothers and Bear Stearns and all of Wall Street were collapsing, Damien Hirst was selling $200 million worth of art at Sotheby's.

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S… Speaker 2 (BusinessDaily-20221216)

You know, you have these moments when when Russia and Ukraine go to war and you just think, OK, this is just going to gut the market. And then the market just keeps barreling on. So I feel like lots of people retrench to art for reasons financially and spiritually. You know, I think art just has this enduring appeal.

17:13

S… Speaker 3 (BusinessDaily-20221216)

That was Kelly Crowe, the staff reporter for The Wall Street Journal, who covers the art market. That was the final episode of our Money Job series, which I spoke to people doing those high-value, high-transaction jobs you might read about, see on the TV, or glamorised in films. Episode 5, Inside the Auction House.

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S… Speaker 3 (BusinessDaily-20221216)

was all about what it's like working as an auctioneer. We heard from Bonham's Auction House, one of the most well-known and oldest auction houses in the world, on how it makes money and how it chooses what goes to auction. We also heard from Jenny Locke, Head of Business Development and Operations at PolyAuction Hong Kong, who taught us the tricks of the trade of an auctioneer. My name is Liana Byrne. Thank you for tuning in.

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S… Speaker 1 (BusinessDaily-20221216)

And even though this series might be over, keep tuning in for more episodes of Business Daily from the BBC World Service. The BBC World Service has a world of podcasts just waiting to be discovered. Hi, I'm Namulanta, and season one of my award-winning podcast, Dear Daughter, is available in full now.

18:21

S… Speaker 1 (BusinessDaily-20221216)

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The heroes on the back of my neck stand up. I started having a strength in me. Or to explore the stories behind the medals, the On The Podium podcast has some of the world's top athletes sharing their journeys to success. How can I use this?

19:07

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Whatever you're looking for in a podcast, the BBC World Service has something for you. And it all gels together beautifully. We're ready to go. We're ready to have fun. We're ready to party. You can catch up with Dear Daughter, Lives Less Ordinary, and on the podium now by searching for them wherever you get your BBC podcasts.

BusinessDaily-20221216

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