It isn't just art fans whose jaws dropped at the record-smashing sale of Salvator Mundi, a painting recently attributed to Renaissance master Leonardo da Vinci, for more than $450 million US at Christie's auction house in New York on Wednesday.
The eye-popping price of a 16th century oil-on-wood portrait of Jesus Christ — one that's admittedly damaged, has withstood extensive restorations and the authenticity of which continues to be questioned by some critics — has shone a brief light on the high-rolling and sometimes confounding art auction market.
"[The Salvator Mundi] has a fabulous recent history and back story," said economist and art market specialist Don Thompson, a professor at York University's Schulich School of Business and author of the bestseller The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art.
We asked Thompson — who published his latest book, The Orange Balloon Dog: Bubbles, Turmoil and Avarice in the Contemporary Art Market, earlier this fall — to shed some light on the situation.
Q: Why is the art market so mysterious?
A: "The art market is opaque. You don't necessarily know who the seller is… You don't know who the bidders are… Until you reach the reserve price [the absolute minimum price the seller will accept for the artwork], you don't know if the bids are real."
Q: Why do we rarely know the identity of the winning bidder at auctions?
A: "To announce you've just spent $40 million on a work of art is to hold up a sign and say 'Burglars of the world, here's where I live and there's probably a lot of other good stuff around my house.'
"This one will be known quickly. It's either a major museum or purchased for a major museum... likely Qatar or Abu Dhabi. Or it's been purchased by a very wealthy individual as a show piece. His friends will see it and word will get out very quickly."
Q: Why do you think the Salvator Mundi exceeded estimates and expectations?
A: "This is as unique a work of art as you'll see in a decade. It was the last Leonardo in private hands. There are only 16 known to still exist. The others are in museums. We will not see another one sold in our lifetime. None of the emerging museums around the world will ever have an opportunity to obtain a centrepiece like this and be known for it.
"The Louvre is one of the great museums of the world, but we all know it simply as the home of the Mona Lisa. The new museum in Qatar, the new Louvre Abu Dhabi which opened a few weeks ago, can have a centrepiece which will be known around the world with this piece of art."
Q: Some have criticized this sale as a triumph of marketing over connoisseur-ship. What do you think of the Christie's promotional campaign (which included a five-city international tour, short films featuring some of the thousands of people who viewed it, a lengthy monograph and more)?
A: "Christie's did a fabulous job of marketing it, as they should have... Did they overhype it to what it was? That's debatable because it is a Leonardo. It is the last one… Once you say that, you've said about 90 per cent of what you can say about it."
Q: There was a mention of a guarantor for the Salvator Mundi, up to a value of $100 million. What is that?
A: "To keep it off their books as a liability, auction houses usually find third-party guarantors who will 'guarantee' the [determined] price. In return for that, they get a percentage of the amount for which it sells over that price… Some guarantor made a lot of money last night.
"Every work at Christie's last night over the price of $5 million would have had a guarantor."
Q: The Salvator Mundi has been part of two lawsuits in recent years, in separate cases related to its changing ownership and how it was sold. Is there any kind of body that regulates or oversees the art auction market?
A: "No international body. Some jurisdictions licence auctioneers, for example… but their regulations [are the same ones] that involve the rest of the economy: misrepresentation, fraud and so on. Other than that, the auctioneer is subject to the same rules as an art dealer, who sells work out of a gallery."
Q: What's behind an artwork's final price?
A: "It's worth [the price it achieves] because two people are willing to bid it up and buy it at that price. Therefore, that's its price. That's what an auction is."