Photo: Michael Edwards

Everybody in the art world, at least those in the part that has lots of money, seems to know Lisa Dennison, an elegantly rational-seeming woman who, until last month, was director of the sometimes irrational-seeming Guggenheim. But nobody seems to know just what it is that she’s been doing since she abruptly quit—switched sides!—to join the auction house Sotheby’s.

Actually, she doesn’t really seem quite to know yet, either: It’s a position invented for her to fill, and therefore it’s still being invented. No department works for her. When I visited her at the crisply Teutonic York Avenue Sotheby’s offices three weeks into the new gig, she was working out of a temporary cubicle and couldn’t yet exactly describe her new duties, though they seem to involve a lot of what she calls “business development.” Which means persuading people to sell their art through Sotheby’s and finding other people to pay a lot of money for it to “build their collections.”

She says her new job is “liberating,” for a number of reasons, including the fact that she’s “not in charge, which I love.” And being in charge of the Guggenheim, with its thirst for money and its wayward plans to become a global “art brand” through satellite museums, wasn’t easy. Her promotion had come after the board president and primary check-writer for the museum, Peter Lewis, quit in protest over visionary director Thomas Krens’s too-visionary budgeting, and Krens was kicked upstairs to head the Guggenheim foundation. But his shadow loomed large, as did her reputation for being his pragmatic fixer. “She wasn’t pushed out,” says Nancy Spector, the Guggenheim’s chief curator. “If anyone can get along with Krens, it’s her.” And while friends of Dennison say that she did her best to be the anti-Krens, focusing on the collection at the Fifth Avenue building and bringing in widely praised shows like the current one on Richard Prince, she couldn’t really turn back the clock. Plans for Frank Gehry’s Abu Dhabi museum continue to go forward.

There were other problems with being a museum person, too, she says: “being on the fringe, in the art world but on the other side, this not-for-profit side, and realizing that the boundaries between institutions were changing, slipping.” She began to wonder if being a museum director, with all of its cosseting of donors and collectors, wasn’t that different from dealing with the same sorts for an auction house. “It was the kind of thing that maybe in a different marketplace, in a different time in history, would not have been as exciting,” she says. “But at this moment, this is where the action is. This really is.”

Sotheby’s, for its part, is thrilled at its acquisition. “Every single collector has come up and said, ‘Tobias, that was genius,’” says Tobias Meyer, the worldwide head of contemporary art at Sotheby’s, who is probably better known as its theatrically haughty chief auctioneer. Dennison lends her cachet to the place, which is dependent on persuading collectors to choose it instead of Christie’s. Meyer calls the move a “proactive gold mine.” “It’s very impressive to say, ‘Yes, Lisa and I are coming to see you,’ ” he says. “I would be impressed.”

He had courted Dennison, as had a number of institutions, including the Los Angeles County Museum of Art. But she’d stayed; she had been working her way up at the Guggenheim through the curatorial side since 1978 (she had an internship there even earlier, in 1973), and she finally became the director in October 2005.

Meyer decided to up the bid for her in May, after he dropped the gavel on David Rockefeller’s Mark Rothko painting, White Center (Yellow, Pink and Lavender on Rose), for $72.8 million to an undisclosed buyer. The previous record for a Rothko was $22.4 million. “I was sitting in the car after the Rockefeller sale and thought, We are in a new world in this global market,” he says. The emerging centers of ridiculous wealth in Asia and Russia and elsewhere around the globe “are ready to buy icons of the twentieth century,” a preponderance of which, like the Rothko, are owned by Americans. Dennison knows many of these current collectors, and the ones who don’t know her will, the idea is, be interested in knowing her. In this new era, “Americans will also be sellers of this material,” Meyer says. He likens the current situation to the robber barons’ fascination with European paintings. “As the Americans were buying Gainsboroughs in 1910, the New Economy is buying Bacons and Rothkos in 2010,” he says. Actually, this new era had been making Dennison’s job increasingly difficult. “Museums cannot compete in this marketplace,” she told an Australian newspaper in May, seeming somewhat disgusted by what she’s now going to help facilitate.

At the eighth-floor reception at Sotheby’s, where I met her, a polite sign on the desk reads ART FINANCING AVAILABLE. There are artworks everywhere here, but this certainly isn’t a museum. It’s a high-tech souk for a menagerie of things very wealthy people find meaning in owning, be it the Magna Carta or antique golf clubs or the shiny new Jeff Koons shaped like a big dangling heart that Dennison took me up to see.

Dennison grew up in New Jersey, went to Wellesley, and then studied art history at Brown. Her mother, Ellyn, encouraged her interest in art. Her father, Saul Dennison, manufactured auto accessories (today, he’s the president of the board at the about-to-open New Museum; the couple built a wing on their house for their small collection of contemporary art). In 1985, during a previous art boom, Dennison, at 32, curated her first solo show at the Guggenheim, of emerging artists. She told the Times at the time that “there’s a strong reaction to a depersonalized world” in the show and that “artists are responding to the visual barrage that society feeds us.”

The Guggenheim was just beginning its transformation from being essentially the private collection of that family to being something much bigger and more expensive. Krens was hired as director in 1988 and quickly began empire building. His museum in Bilbao changed the art world, and his subsequent attempts to replicate its success from Brazil to Singapore effectively turned the original museum into a sales office for the global brand instead of an enthusiastically curated museum. It also set off the current craze for destination architecture and globalized art tourism—these great cathedrals of secular worship.

Dennison said the Guggenheim was as surprised as anyone at some of the repercussions of Bilbao. “I was part of it when there was not even a hole in the ground; I installed the first show,” she says. “Did we have any idea of the so-called Bilbao effect and the impact it would have on museums as an agent of urban revitalization, of ‘starchitects’ and all that? I don’t think so. Did it diminish the importance of New York? Well, it seemed to in some respect.”

Lack of curatorial focus was only part of the problem at the Guggenheim. Despite famously, egregiously branded shows like the 2000 Giorgio Armani spectacular, the money wasn’t coming in. A big part of Dennison’s duties at the Guggenheim included “seeing the best private collections in the world as you cultivate individuals,” she says. She also traveled the world meeting people in cities where the Guggenheim considered opening satellite museums. And all of these connections made her much more valuable to her new employer. “There were a lot of parallels with what I was doing,” she says. “The growing art world and emerging markets in Asia and Russia and the Middle East are exactly the places the Guggenheim was looking to expand.”

Ultimately, as with all things in the art world these days, this is about money: Dennison, 54, made $425,000 last year at the Guggenheim. She’ll make much more at Sotheby’s, so long as she, and the company, does well.

Judging by other museum people who’ve gone over to the other side of the business, she may not have an easy time of it. The right people like her (her friendship with the L.A. billionaire Eli Broad helped spark LACMA’s interest in her), and she works hard for them. But just because she has machers like Peter Brant and Stephen Ross on the Guggenheim board doesn’t mean they’ll automatically sell through Sotheby’s now. Connections open the door, but closing the deal most often involves which house offers you the higher guaranteed price; auction watchers note that Christie’s is ahead of Sotheby’s in contemporary art right now largely because it’s gambled and anted up more. Behind the scenes, this is done by attempting to match up the number with the budgets (and hunger) of likely bidders.

Meyer thinks Dennison is a natural. “Lisa had been involved very, very closely with acquisitions for the museum,” he says. “I used to talk to her about market and value. About how much things could cost. That’s how we established our dialogue. She’s very market-savvy.”

Dennison is at pains to describe how similar her previous job is to her current one. “I’ve been someone who’s always come to auctions,” she says, “which is not typical for museum directors. And I did because I thought it told us a lot about our time, the market, about what collectors were thinking about.”

But there are definite differences. Yes, she’d corral patrons to buy pieces the museum wanted and donate them, but she was doing it for an ostensibly higher purpose. As one longtime art-world friend of Dennison’s who’s played on both for-profit and nonprofit teams puts it, “In museum work, there’s a kind of dignity in your role. At Sotheby’s, if you ever try to retreat into your dignity, you fail.”