After a record-breaking year in which global art auctions exceeded $16 billion, the world’s largest auction houses have resumed the risky practice of guaranteeing minimum prices for very expensive lots. Christie’s and Sotheby’s had mostly abandoned guarantees in late 2008, and observers are keen to speculate about their return.  February sales with works by Monet, Cézanne, and Picasso are primed to set new records.

In guaranteed transactions, Christie’s and Sotheby’s promise sellers a minimum price for a work of art notwithstanding the actual final sale price. If the work exceeds the guaranteed minimum, the auction house and the seller split the extra amount. If the guaranteed minimum is not met, the auction house takes a loss to make up the difference to the seller.

Guarantees can benefit the auction houses with additional revenues, but they risk millions of dollars if sales fail to meet minimum prices. Until recently, most guarantees were underwritten by independent financiers who shared the profits, or alternatively purchased the art themselves to meet the guaranteed sale prices. Since late last year, Christie’s and Sotheby’s have hedged their own funds to guarantee the sale prices.

Critics complain that auction houses may promote guaranteed works more than those in which they have no stake, and that external guarantors gain an unfair advantage when they know the guaranteed minimum for works they are bidding on. What’s more considerable, however, is how much risk the auction houses are exposed to if the market falls unexpectedly.

Guarantees are one response to shrinking margins, which are primarily from premiums on sale prices and are increasingly eroded due to competition for the most expensive consignments. Christie’s and Sotheby’s make a multi-million dollar bet with each guarantee that the market will only continue to increase.

Among the upcoming lots with guaranteed minimums are several works by Claude Monet. Sotheby’s will have five Monets in its Impressionist and Modern Art sale in London on February 3 with a combined estimate of up to $106 million. The most significant, with guarantees from both Sotheby’s and an external guarantor, is Le Grand Canal, which is estimated for more than $30.6 million. The painting has been on loan to the National Gallery since 2006 and the consignor is not identified.

MoMA – with notoriety – has consigned Monet’s Les Peupliers à Giverny. It was painted in 1887, three years before the artist acquired his property at Giverny. Les Peupliers has an auction guarantee with an irrevocable bid, estimated above $13.6 million.

The other Monets in the February 3 sale include L’Embarcadère (1871), Vase de Pivoines (1882), and Antibes Vue de la Salis (1888), each from private collections. The works have been previewed in Taipei, Hong Kong, and New York in advance of the London sale.

On February 4, Christie’s Impressionist and Modern Art sale in London will include Paul Cézanne’s Vue sur l’Estaque et le Château d’If. The painting was last sold in 1936 and is the first Cézanne landscape to come to auction in over a decade. It is from the collection of Samuel Courtauld and has been on loan to the Fitzwilliam Museum in Cambridge since 1985. The low estimate, which is sure to be exceeded, is $12 million.

A recent report by the International Business Times identified that demand from Chinese collectors has inflated the market for works by Pablo Picasso by up to 300 percent. Christie’s and Sotheby’s will each have four works by Picasso in their February sales, including a significant maquette, Tête, that Sotheby’s estimates above $7.7 million. The artist’s granddaughter, Marina Picasso, recently announced that she will sell seven works from her personal collection valued at $290 million.

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Last week in London, a Monet water lily painting sold for $54 million in Sotheby’s Impressionist & Modern Art Evening Sale. The work, a 1906 Nymphéas, is one of a series completed from 1905 to 1907 at Giverny.

Another from 1906, and apparently painted from the same spot, is in the permanent collection of the Art Institute of Chicago. The series was first exhibited in 1909 at the Galerie Durand-Ruel in Paris, and this Nymphéas was acquired by the dealer. Its provenance includes over a dozen public exhibitions, and the (unidentified) buyer is expected to loan it to exhibitions in Cleveland and London from 2015.

Monet’s water lilies are among the most recognizable of his works and of Impressionism. He moved to Giverny, fifty miles from Paris and along the right Bank of the Seine, in 1883. He constructed gardens, ponds, and greenhouses, and three glass-roofed studios where he could work almost in plein air. He began painting water lilies in 1899, leading to a series of large-scale works that occupied the last two decades of his life.

From 1914 and throughout World War I, Monet donated paintings to benefit sales for the war effort. In 1918 he wrote to Georges Clemenceau, the Prime Minister of France, to offer two new paintings:

“Dear and great friend, I am on the eve of finishing two decorative panels which I wish to sign on the day of Victory, and am asking you to offer them to the State… it’s not much, but it’s the only way I have of taking part in the victory.”

The gift took almost a decade to be realized – Monet’s vision deteriorated as he continued reworking his paintings, and a location had to be prepared for them. In 1927, five months after Monet’s death, his Grandes Décorations and gift to France were installed for the public in the Musée de l’Orangerie.

The Nymphéas at the Musée de l’Orangerie are eight paintings installed in two elliptical rooms, and under diffused sunlight as Monet instructed.  Visitors may experience variations of light across the paintings as Monet experienced it in his gardens.

Virtual tours of Les Nymphéas have been created by
Musée de l’Orangerie and Google Cultural Institute.

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