As the economy totters, the art world is nervously eyeing Sotheby’s Valentine’s Day contemporary-art auction for clues to the market’s future direction. The fund-raising sale—to benefit Bono’s (RED) project—will offer 83 works by stars such as Richard Prince, Jeff Koons, and Cecily Brown. But there’s a hitch: Because it’s a charity auction, it’s exempt from state and local taxes, and the auction house is waiving its commissions—so buyers effectively get about a quarter off their final cost. “It’s a great ploy,” says one Sotheby’s insider. And if prices can go higher, that’ll make the contemporary market look strong before the huge—and for-profit—contemporary sales at Sotheby’s London HQ later this month. Artnet.com’s Charlie Finch admires the strategy. “If [the red auction] does badly,” he says, “they can say, ‘It’s only a charity auction,’ and if it goes over estimate, it just makes the market seem stronger.” Sotheby’s originally estimated $40 million in sales but later trimmed that estimate by a third, to a range of $21 to $29 million.

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• Archive: “Intelligencer”
• Articles by Alexandra Peers