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Heritage May 16 - 18 Comic Art Signature Auction - Chicago
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764 posts in this topic

7 minutes ago, Bronty said:

Oh I disagree.   The 5.4m will move IMO.  You have to remember that even if the buyer is Jim, he has all sorts of reasons to pay the full BP.   For legal reasons, for the perception of a level playing field, so that the number reported is accurate, etc etc etc.   That amount will get paid by the buyer because anything else would from my POV cause HA/Jim legal and business problems.    You can’t be accused of giving yourself an advatange when you pay the same fees as everyone else.   Now maybe some of that BP eventually comes back to him as profit but that’s a separate transaction or rather , series of transactions because a large outfit like heritage is almost never a single corporation, it’s a whole corporate group, with different companies for different purposes, holding coamonies etc.    For that income to flow back to Jim it has to likely filter through several transactions 

This "sale" reeks of guarantee. What's quite pertinent is: "who" was the guarantor?

Bronty, you should look more into guarantees and how they work generically. We all should also understand that HA has been in the business of acquiring tremendous single lots and collections in non-comic art categories for a very long time. Their core business has always been coins/currency; guarantees, I'm certain, are not "new" to their business model.

An auction guarantee behaves like an insurance contract (actually, not behaves but "is"). There are stated coverage terms and a premium set against those terms. All terms are negotiable (of course) unless a boilerplate version is accepted at face value. I don't know what HA's boilerplate for this looks like (anybody..?), so I don't know if it includes BP being assessed against the guarantor or not, or is somehow otherwise accounted for, but...it's kind of hard to imagine? Unless I was getting some other equally or more valuable consideration, that's not a contract I'd be likely to sign! For this kind of money (not $5k in other words), BP valued at $900k would be a very negotiable term. This all assuming a third-party guarantor. Now...if the risk wasn't laid off to a third-party, then...HA is going to pay itself the BP?! Okay. Maybe. And that's the value of "privately held" incorporation right there, pulling money out of one pocket to put it in the other pocket....mmm-hmmmm ;)

Now another interesting possibility is that the guarantor is the consignor or another Frazetta family member, maybe "paid for" by future consignments, etc....which would be a lot more like a reserve not a guarantee, but in Texas (or Chicago!) who knows...Wild, Wild West with all this non-transparency. Dallas is becoming more like NYC every day.

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52 minutes ago, vodou said:

A piped-in Three's Company laugh track would have been more appropriate ;)

Not directed at you.   I understand the sarcasm given the nature of the sale but I see zero problem with it.   

A) anyone could have bid more if they wanted to

B) someone is paying the bill

C) Sure, the house may be invested in promoting the sale.   But so what?   As long as B) is covered who cares?    It’s not much different than the collector selling an AF 7.0 that bids up the 6.0 in the same sale to help his own consignment?    That happens all day, every day.    People bid with *all kinds* of different motivations and we are all big boys and girls here.    Pay or don’t pay - no one has a gun to your head.   I don’t give a dam about anyone’s motivations because they are varied and obscure.   All that it boils down to is price and payment and as long as that’s sacrosanct, there’s really no issue IMO

Edited by Bronty
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2 minutes ago, vodou said:

This "sale" reeks of guarantee. What's quite pertinent is: "who" was the guarantor?

Bronty, you should look more into guarantees and how they work generically. We all should also understand that HA has been in the business of acquiring tremendous single lots and collections in non-comic art categories for a very long time. Their core business has always been coins/currency; guarantees, I'm certain, are not "new" to their business model.

An auction guarantee behaves like an insurance contract (actually, not behaves but "is"). There are stated coverage terms and a premium set against those terms. All terms are negotiable (of course) unless a boilerplate version is accepted at face value. I don't know what HA's boilerplate for this looks like (anybody..?), so I don't know if it includes BP being assessed against the guarantor or not, or is somehow otherwise accounted for, but...it's kind of hard to imagine? Unless I was getting some other equally or more valuable consideration, that's not a contract I'd be likely to sign! For this kind of money (not $5k in other words), BP valued at $900k would be a very negotiable term. This all assuming a third-party guarantor. Now...if the risk wasn't laid off to a third-party, then...HA is going to pay itself the BP?! Okay. Maybe. And that's the value of "privately held" incorporation right there, pulling money out of one pocket to put it in the other pocket....mmm-hmmmm ;)

Now another interesting possibility is that the guarantor is the consignor or another Frazetta family member, maybe "paid for" by future consignments, etc....which would be a lot more like a reserve not a guarantee, but in Texas (or Chicago!) who knows...Wild, Wild West with all this non-transparency. Dallas is becoming more like NYC every day.

Well let’s think through the mechanics.  Sure the premiums can be negotiated as to who gets what cut, but there’s still a 5.4m check being cut from one entity to another.

if the consignor negotiates better terms, they simply get a better cut.   At least as I understand it.

Edited by Bronty
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1 minute ago, Bronty said:

we are all big boys and girls here. 

I very strongly disagree. We all know that people who otherwise are absolutely excellent at handicapping their primary source of income (hedgies, traders, tech innovators, etc) as to risk/reward and achieving incredible levels of success by all measures...get friggin' stupid when they confuse passion and logic in the art world. I get it. You get it. Half of the readers here, maybe get it, but the other half...L O L. There's always at least one newb that posts in these kinds of threads, something along the lines of golly, gee whiz, does that really happen? for realz?!! I think we've already seen that post, at least once, in this thread and another similar in the last week. My posts are directed toward them. Not you. Not Gene. And certainly not Jim Halperin lol

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6 minutes ago, vodou said:

I very strongly disagree. We all know that people who otherwise are absolutely excellent at handicapping their primary source of income (hedgies, traders, tech innovators, etc) as to risk/reward and achieving incredible levels of success by all measures...get friggin' stupid when they confuse passion and logic in the art world. I get it. You get it. Half of the readers here, maybe get it, but the other half...L O L. There's always at least one newb that posts in these kinds of threads, something along the lines of golly, gee whiz, does that really happen? for realz?!! I think we've already seen that post, at least once, in this thread and another similar in the last week. My posts are directed toward them. Not you. Not Gene. And certainly not Jim Halperin lol

Okay, I can buy that.    How about "we are mostly adults here and responsible for our own choices" then.

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3 minutes ago, Bronty said:

premiums

I think you may be confused. I reference premium re: contract, the quid pro quo for the guarantee terms. That's most often a split of proceeds over and above the strike price. I'm pretty sure that strike was 4.5m and there is nothing to split above. BP, SP, etc...who knows on that, all we can do is guess, which is what I will now do.

I'm thinking Frazetta family consignments have to be zero SP and a kickaback portion (a % only, negative SP less guarantee premium!) of BP over and above guarantee amount....but only IF over and above happens. It did not. Thus: guarantor gets the lot for bid only, House either is guarantor and gets the lot or gets the guarantee amount payment from third-party (no BP unless it's Jim and games are being played), and consignor gets bid only nothing additional to split or otherwise "take" in any manner. My guess.

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1 minute ago, Bronty said:

How about "we are mostly adults here and responsible for our own choices" then.

Sure. Doesn't mean we only "help" our friends that we personally know though, does it? I'm a friend to all. Even those that think I wouldn't be ;)

A little education brought in from outside the cloistered world of collectibles, such a bad thing? C'mon...do we really have to take the rubes for everything in their wallet? Not me. I'm okay with 80%, leaving enough for them to go home, earn some more and come back again tomorrow :)  It's the Las Vegas model lol 

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19 minutes ago, vodou said:

I think you may be confused. I reference premium re: contract, the quid pro quo for the guarantee terms. That's most often a split of proceeds over and above the strike price. I'm pretty sure that strike was 4.5m and there is nothing to split above. BP, SP, etc...who knows on that, all we can do is guess, which is what I will now do.

I'm thinking Frazetta family consignments have to be zero SP and a kickaback portion (a % only, negative SP less guarantee premium!) of BP over and above guarantee amount....but only IF over and above happens. It did not. Thus: guarantor gets the lot for bid only, House either is guarantor and gets the lot or gets the guarantee amount payment from third-party (no BP unless it's Jim and games are being played), and consignor gets bid only nothing additional to split or otherwise "take" in any manner. My guess.

Okay.     Thanks for the explanation.   Hard for me to comment  one way or another when we don't have the facts.

Ultimately I'm more liberal on these things because I view the motivations of the other bidders as being less than straightforward as well.

All of these scenarios have played out, no doubt:

1) Collector heavily invested in Artist A bids up his work to bid up the value of his holdings

2) Dealer buys back inventory ;)

3) Collector with no desire to win the auction bids up a lot that another collector is interested in (punishment bids)

....and many other such less than angelic motivations.

So, the way I look at it is control what you can control, the price you bid.     The motivations of the house and of other collectors.... being upset about that is just tilting at windmills, and being blind to that is naive.

Edited by Bronty
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1 hour ago, Bronty said:

Did anyone else notice how forced the clapping was?   She seemed to completely forget to encourage any clapping despite a 5M sale until reminded by the crowd . 

giphy.gif

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1 hour ago, Bronty said:

For legal reasons, for the perception of a level playing field, so that the number reported is accurate, etc etc etc.

But the money coming from the guarantor doesn't necessarily need to be for the full amount.

46 minutes ago, Bronty said:

All of these scenarios have played out, no doubt

Disregarding any blatant shilling scenarios (which probably don't apply here), my overall point is that these third-party guarantees aren't even considered foul play. But they muddy up the waters so much, you can't discern any kind of comp for future sales. It creates a HUGE distortion. And no shilling shenanigans are even necessary.

Have a look at the link I posted a bit earlier. It lays it all out pretty well. This is a nice quote from it --

Quote

Why bid on a guaranteed work when the playing field isn’t level and someone else can outbid you while still paying less? After all, while the existence of the guarantee is revealed by the presence of º ♦ hieroglyphics in the auction catalogue..., the identity of the guarantor is a closely-held secret, as is the amount of money that has been guaranteed to the seller. Only one bidder knows those two crucial data points, and that knowledge is extremely valuable. ....   It’s irrational to get into a fight where your opponent has you informationally and financially outgunned.

IF EQ had a guarantor, that wasn't disclosed by HA at all (the way Christie's would, for example).

So let's say a speculator-guarantor bought EQ and not a collector-guarantor... Who/when/how much does it get sold for quietly?

Edited by BCarter27
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46 minutes ago, Bronty said:

So, the way I look at it is control what you can control, the price you bid.     The motivations of the house and of other collectors.... being upset about that is just tilting at windmills, and being blind to that is naive.

Completely and totally agree. I too only worry about what I can control - my bid/buy/pass option. The rest is fun discussion fodder and, I believe, illuminating for a certain slice of "other readers".

Now...that doesn't mean I don't enjoy tapping on the shoulder of I saw what you did there when I can. I really enjoy that. Especially for the virtue-signalers ;) and other sorts of obvious hypocrites. I can do this with a clean conscience because: I do none of the things I'm critical of. Ever. I'm not so sure (re: motivations) of anybody else on this board being able to honestly write that though. I perma-hope I'm not solo in the what you see is what you get; I never play games category. But hopes, hopes and dreams...bah!

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15 minutes ago, BCarter27 said:

comp for future sales

Comps = 90% bs, except when you intimately know and trust all parties involved. How often is that? That's about how often you should use "comps" to help your bid/buy (and sell too) decisions! For me...because I trust my gut (which was heartily questioned by one long-time poster here a few years back lol ) I put comps at 25% of my "fmv" analysis, when they back up my gut lead, but only 5% when I have nothing else to lean on. Comps are for sellers not buyers, but there's a sucker born every minute...

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53 minutes ago, Bronty said:

Okay.     Thanks for the explanation.   Hard for me to comment  one way or another when we don't have the facts.

Yeah, we don't know.  I'm pretty sure based on the observable fact pattern from this and previous Frazetta oil sales at HA that there was either an explicit guarantee made, or, if not, at the very least, it was HA's plan to trip the reserve if no one else stepped up to save face and keep everyone happy.  In previous consignments, the reserve was sometimes inexplicably triggered the day before the live auction, which you would figure no real bidder would do unless that was the true maximum amount they were willing to pay - more likely, the repeated occurrence of such was Heritage signalling that the lot was going to sell and that people better step up.  

For EQ, I'm guessing they didn't trip the reserve ahead of time because they didn't necessarily want to be the ones buying it at that price. Whether they were, or, whether they were ultimately successful in getting someone else to step up (e.g., the Lucas Museum), I guess will only come out with the passage of time.  But, the bottom line is that we don't know at the moment.

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20 minutes ago, BCarter27 said:

Who/when/how much does it get sold for quietly?

Who finally ends up with this piece will be interesting. If we don't see it at all for many years (5+)...even more interesting ;)

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According to this there is an actual winning bidder: "The winning bidder does not wish to be identified at this time." I'm also hearing that Holly Frazetta, the consignor, is saying it went to a museum. I'm still leaning toward guarantee here but of the third-party variety now, and probably no BP by contract.

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55 minutes ago, delekkerste said:

Yeah, we don't know.  I'm pretty sure based on the observable fact pattern from this and previous Frazetta oil sales at HA that there was either an explicit guarantee made, or, if not, at the very least, it was HA's plan to trip the reserve if no one else stepped up to save face and keep everyone happy.  In previous consignments, the reserve was sometimes inexplicably triggered the day before the live auction, which you would figure no real bidder would do unless that was the true maximum amount they were willing to pay - more likely, the repeated occurrence of such was Heritage signalling that the lot was going to sell and that people better step up.  

For EQ, I'm guessing they didn't trip the reserve ahead of time because they didn't necessarily want to be the ones buying it at that price. Whether they were, or, whether they were ultimately successful in getting someone else to step up (e.g., the Lucas Museum), I guess will only come out with the passage of time.  But, the bottom line is that we don't know at the moment.

5m is not trivial.    The magnitude of the sale, even if it was Jim, is still pretty impressive.    And, it will be interesting to see if trophy OA lots have an easier time going past the 1m barrier with this piece having shattered it.   I tend to think that its not the ideal sale to have that kind of effect since these types of works are atypical to the market at large.    The H181 cover sale were it to happen could have that effect however.

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However this happened, it's now a legit comp. Or as legit as these things go. Anyone who is wary of it, and won't take it into consideration when bidding on the next painting of this level, will just lose out to someone who isn't. Or who doesn't care.

On the Lucas Museum possibly acquiring this...I'll believe it when I see it. But if they did, then I really have to question why they passed on "Master Race" for 1/10 the cost (or at least bid more, if they were in it at all).

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3 minutes ago, Nexus said:

However this happened, it's now a legit comp. Or as legit as these things go. Anyone who is wary of it, and won't take it into consideration when bidding on the next painting of this level, will just lose out to someone who isn't. Or who doesn't care.

On the Lucas Museum possibly acquiring this...I'll believe it when I see it. But if they did, then I really have to question why they passed on "Master Race" for 1/10 the cost (or at least bid more, if they were in it at all).

Because "Narrative Art" is a catch-all for 'stuff George Likes'?  :insane:

--and there's NOTHING wrong with that.   He's the one writing the check for the museum.

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1 minute ago, Bronty said:

Because "Narrative Art" is a catch-all for 'stuff George Likes'?  :insane:

--and there's NOTHING wrong with that.   He's the one writing the check for the museum.

Nope, nothing wrong with that at all. We all like what we like, want what we want. But what is goal of the museum? To simply reflect Lucas' tastes or to educate masses on "narrative art"? I realize it's not either/or, but IF they did acquire EQ, then that balance is tilted far one way. Whatever the case, still can't wait for it to open!

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16 minutes ago, Nexus said:

Nope, nothing wrong with that at all. We all like what we like, want what we want. But what is goal of the museum? To simply reflect Lucas' tastes or to educate masses on "narrative art"? I realize it's not either/or, but IF they did acquire EQ, then that balance is tilted far one way. Whatever the case, still can't wait for it to open!

Well.    Honestly?   Any ultra wealthy person building a museum is likely doing so at least in part out of ego.   (And so what).

There might be a bit of an education element, but fundamentally there's going to be a lot of 'look at all my cool toys' thrown in there.

I'd speculate that George wants a museum, and the museum needs some sort of stated purpose.

The stated purpose is effectively required by the desire for a museum.   The museum is not a reaction to the need to educate the masses.

As such, its always going to be, to you alluded to, more reflective of his taste than reflective of the post hoc raison d'etre.

 

Edited by Bronty
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