The $71 Million Car Crash

May 17, 2007 — -- For the second night in a row, a contemporary art piece sold for more than $70 million at auction.

Andy Warhol's painting "Green Car Crash," which graphically shows a car accident that includes the car's driver hanging impaled from a nearby street post, sold for $71.72 million Wednesday night to an anonymous buyer.

The work was sold at Christie's in New York as part of an auction of postwar and contemporary art that took in a total of nearly $385 million, making it the second-most lucrative art auction ever held, according to the auction house.

"It was one of the most remarkable sales I've ever seen," Christie's honorary chairman Christopher Burge, who also served as auctioneer, told Reuters. "The market wasn't just hungry, it was ravenous."

Only four of 78 works on offer failed to sell.

Christie's had estimated that the Warhol would sell for $25 million to $35 million.

The night before at Sotheby's, an anonymous buyer spent $72.84 million for Mark Rothko's "White Center (Yellow, Pink and Lavender on Rose)," shattering all records for contemporary art auction sales.

Rothko's painting was expected to sell for $40 million, but when the bidding finished Tuesday night, a buyer on the other end of the telephone had purchased the work for nearly double that amount.

Several other works sold Wednesday also set records for their artists, Christie's said. They included a Jasper Johns canvas "Figure 4," which sold for $17.4 million; an Arshile Gorky painting "Khorkom," which went for $4.2 million; and a Cindy Sherman photograph, "Untitled No. 92," which was bought for about $2.1 million.

It should be noted that these records are for auction sales. A Jackson Pollack painting entitled "No. 5" 1948 sold for $140 million in November 2006, but that was a private sale.

A Banner Night for Warhol

Warhol stole the show at Christie's.

His 1962 painting of Marilyn Monroe, known as "Lemon Marilyn" for its color, was expected to fetch $18 million but sold for $28 million. A similar work called "Orange Marilyn" sold for $16.5 million in November.

The previous auction record for a Warhol work was $17.4 million, which was set when Christie's sold Warhol's iconic image of Chinese Communist Party Chairman Mao Zedong for $17.4 million.

But the real showstopper was "Green Car Crash," part of a series of Warhol works that drew on photographs of fatal accidents. Silkscreened over a green background, the painting uses a news photograph of a grisly crash in Seattle. It had been in a private collection for decades, the auction house said.

Sandy Heller, who advises collectors on purchases, said that while it "is a great piece," it is also "a very tough image" that some might find hard to live with.

"It's hard to put an image of impaled figure in a burning car in a home where you have little kids," Heller said.

A Great Return for Rockefeller

Tuesday night was a great night for Sotheby's where more than $254.8 million was paid for artwork.

Besides Rothko's record-breaking sale, the auction house also sold Francis Bacon's "Study From Innocent X" for $52.68 million. The 1962 work had been estimated to sell for $30 million.

The Rothko painting has been owned by David Rockefeller since 1960 when Dorothy Miller, the first chief curator of the Museum of Modern Art, suggested he buy it, according to Sotheby's.

Rockefeller paid less than $10,000. It was previously owned by Elizabeth Bliss Parkinson, niece of Lillie P. Bliss, one of the three founders of MoMA. Parkinson purchased the work from Rothko earlier in 1960.

"I am sorry to see it go, but I hope the next owner enjoys it as much as I have," Rockefeller, who was at Tuesday's auction, said in a statement.

There were 74 lots with only nine works failing to sell. While the $254.8 million night was a record, it did fall short of Sotheby's $265 million high estimate.

Both Sotheby's and Christie's charge a 20 percent commission on the first $500,000 of the auction sale price, and 12 percent on anything above that.

That means Sotheby's made nearly $8.8 million on the $72.8 million paid for the Rothko. The auction house brought in more than $30 million in total commissions for the one-night sale.

A Hot Market

Contemporary art was once cast to the sidelines of serious big-dollar collecting, but is now scorching hot.

The market has climbed at astronomical rates thanks to a new breed of younger, richer art buyers who are willing to shell out big bucks to get the piece they want. The buying is fueled by super-rich Asians, Russians, Europeans and a crop of wealthy Americans who made billions in hedge funds and real estate.

"There's a huge amount of money around the world available at the moment. You've got a lot of newer collectors coming in who basically have the financial facility to win any bidding war," said Brett Gorvy, co-head of post-war and contemporary art for Christie's.

"It's been the last year and a half where we've seen staggering prices for the best work," Gorvy said.

Even the auction houses have underestimated the supercharged bidding.

In November, Christie's offered a Clyfford Still painting that was estimated to bring in $5 million to $7 million. It sold for $21.3 million.

"That demonstrated the focus of collectors on the very, very best, and also the ability of collectors not to be held back by previous price structures," he said. "Basically, they are making the market and they are making it at auction."

Who Are the Buyers?

Sotheby's Grant said that among the new groups in the market were hedge fund managers, a group not hurting for disposable income. The industry magazine Alpha estimates The top 25 hedge fund managers made a combined $14 billion last year.

"They seemed to have gravitated toward this field and modern painting, and I think that does account for a fair amount of what's going on," he said. "I think any new group coming in is going to drive up prices."

Heller described the new buyers as more international and younger.

It used to be that the only buyers with enough money for these works were in their 50s and 60s -- people who amassed wealth after a career working. Today, people have great amounts of money at a younger age.

But Heller dismissed the idea that hedge fund money was pushing up prices.

"There are maybe 10 hedge fund collectors. They're not driving this market," Heller said. "They're part of it, but it's like saying the Russians are driving the market or the Asians are driving the market or the New York real estate guys are driving the market. It's not any one thing."

Heller, who is based in New York, has been known to work with some big-name hedge fund managers. He would not talk about his clients or specific work, except to say that he would be at this week's sales.

"You hire me when you want every advantage," he said.

International Exchange

Some in the art world have said that a weak U.S. dollar has given international buyers more leverage.

"I don't think this is a currency play," Heller said. "I think this is a wealth play."

Allan Schwartzman, an art adviser and the first curator of the New Museum of Contemporary Art, said today's buyers had "spent enough on houses, lifestyle, boats, cars and whatever."

Today's buyers come from a generation that had more access to art and is more familiar with the names of artists.

"Another generation that has emerged, that was familiar with and comfortable with art or conversant enough that there is an easier crossover point to art appreciation and art collecting than the previous generation," Schwartzman said.

"I would say that the vast majority of them are people who make money with money," such as hedge fund managers, investment bankers and to some degree those in real estate, he said.

Schwartzman said that what happened at auction was playing a dominant role in the contemporary art market. In the early 1980s, the action houses wouldn't take anything that was less than 10 years old because they didn't want to participate in contemporary art.

"Nowadays, you see artists who have their first show one year and then there's something at auction by them the next," he said.

"There's a number of people collecting contemporary art who would rather get the work than [worry about] the price," Schwartzman said. "That's why you see things selling for twice, four times, 10 times what the general market felt their value was going into that particular sale."

Maybe they really want that particular piece, he said, or maybe "the money is really not that significant to them."

"All of which is a reflection of the level of wealth of the top people perusing art today," Schwartzman said. "It's people who have done really, really well."