Contemporary Art Goes Bust at Dismal Auction

Collectors from Steve Martin to Valentino packed the Sotheby's saleroom in New York last night, but its contemporary art auction barely pulled in $125 million—far below the low estimate of $202 million. For those who could afford it, works were going at bargain-basement prices. "It was a half-price sale," said Eli Broad, the Los Angeles financier collector, who spent $8 million on American modern art in just 90 minutes.

Some 20 of the 63 lots at auction failed to sell, but for Sotheby's there was worse news. The house offered sky-high guarantees—minimum payments regardless of the sale's outcome—when the market was in better shape, saddling it with massive liabilities. One painting by Roy Lichtenstein was estimated at up to $20 million but failed to sell; the collector who put it on the block will still collect about $15 million from Sotheby's anyway.
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