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The Gavel Drops at Sotheby’s

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This Bacon triptych was exhibited in the ’70s, then sold separately. An Italian collector reunited it and sold the work privately last year. Then the buyer—likely Martinez—flipped it last fall at Christie’s for the largest price ever paid at auction, $142 million.  

Loeb’s reputation in the art world was shaped by an episode a decade ago when he went to war with the dealer Barbara Gladstone over a diptych by Matthew Barney. He thought he had an agreement to purchase it, but Gladstone pulled it back, and Loeb, then merely a millionaire, was enraged at the slight. “It is not my intention to intimidate or frighten you,” he wrote a gallery employee. But in a series of emails to her and Gladstone, Loeb explained his fund’s methods of investigation, threatened to dig into the gallery’s sales practices and tax compliance, suggested he might share any information he uncovered with the press or “proper legal authorities,” accused Gladstone of “arrogance and lack of honesty,” and promised that he would be selling another work he had recently purchased from her gallery at a Sotheby’s day sale—a major kiss-off.

“I am sure that your first reaction will be to demonize me,” Loeb wrote, “but in time, I hope you will learn something from my work that will make you a better person.”

The emails were forwarded around the art world, and for a while, Loeb is said to have been blackballed by some dealers. But time and money have healed many wounds. Gladstone says she and Loeb are now friendly: “It was an unfortunate incident at the time, and we’ve all moved on.” During the 2000s, the dealer Larry Gagosian invited Loeb and his wife to meet artists at dinner parties. Loeb bought a Koons statue of a turquoise egg from Gagosian and decorated Third Point’s offices with works by Richard Prince. His style in art, as in business, can be confrontational: One piece he has exhibited, a Kippenberger sculpture of a crucified frog, was condemned by the pope when it traveled to Italy. Loeb has amassed a portfolio of the German artist’s work. “He thought that Kippenberger was a market that was undervalued,” says Loeb’s longtime art dealer and adviser, Christophe Van de Weghe. “He was proved right.”

Van de Weghe says that Loeb analyzes his art purchases the way he would any other investment position. “Dan is one of these guys that, if I offer him a painting, he will rip that painting apart,” the dealer says, breaking down pricing trends and looking for what investors call hidden value. “He has operated in the art world in the manner he operates in the stock market,” says Todd Levin, director of the Levin Art Group.

Loeb’s positions don’t always pay off. After Third Point was hit hard in the financial crisis, he liquidated some of his collection. The Koons egg—which Loeb had attempted to sell before the crash for a reported $20 million—fetched $5.4 million at a Sotheby’s auction in 2009, less than its low-price estimate. But Third Point has since bounced back, as has Loeb’s purchasing. In November, he was reportedly the winning bidder for a $46 million Rothko at Christie’s.

Many presume Loeb’s interest in Sotheby’s is motivated by ego or a desire to elevate his importance in the art world. Others believe he just loves a fight. “He’s a guy with billions and an ego to match,” says one art-industry consultant, “and he goes around breaking the crockery.” But another collector has a more direct explanation. “I think a fair amount of what Dan speaks about is probably true,” the collector says. “They are a pretty intransigent, stuffy old company at their core.” To a hedge-fund manager who prizes the power of information, Sotheby’s appears to be sitting in an ideal spot between buyers and sellers. Really, Loeb wants Sotheby’s to capitalize on that centrality by operating more like he does—taking positions, using leverage, and weighing risk and reward more aggressively.

The argument that Sotheby’s is insufficiently entrepreneurial would come as a surprise to a lot of people in the art world, who view the auction houses as the fount of all commercialism. During the 20th century, it was Sotheby’s that played a transformative role in the art market, dragging a monkish trade into the capitalistic sunshine.

The company—the oldest listed on the New York Stock Exchange—traces its ancestry to the 1700s and a bookseller who started out selling his wares in taverns. Over the centuries, in competition with Christie’s, it developed a business selling off the estates of the English aristocracy. But if you wanted to set a place and date of birth for the art market as it exists today, it would be a Sotheby’s showroom in New York on October 18, 1973.

A wealthy New York scenester couple, Robert and Ethel Scull, sold off a collection including works by Warhol, Willem de Kooning, and Robert Rauschenberg, reaping $2.2 million, about $12 million in today’s dollars. The sum was considered ludicrous, and the art world was scandalized by the Sculls’ profiteering. Legendarily, a drunken Rauschenberg confronted Robert Scull after the auction, accusing the collector of making tens of thousands of dollars from paintings the artist had sold him for a few hundred. “There was some pushing and shoving,” says David Nash, the Sotheby’s employee who staged the sale, now a private dealer. “Things have changed massively since then.”


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