Sotheby’s trial provides a peek behind the curtain of private art sales

Testimony in a legal battle between a Russian billionaire and Sotheby’s, one of the world’s most prestigious auction houses, has pulled back the curtain on the opaque world of how the world’s most expensive art is sold to its most discreet buyers.

The case — in which oligarch Dmitry Rybolovlev has accused Sotheby’s of helping Swiss art dealer Yves Bouvier overcharge him by approximately $1bn on numerous purchases over a decade — has captivated the art world, giving a behind-the-scenes glimpse of private deals totalling tens or hundreds of millions of dollars. (Sotheby’s has denied any wrongdoing. Bouvier has not been named as a defendant in the lawsuit, and various other cases against him over his work for Rybolovlev have either been dismissed or settled.)

Lawyers for Rybolovlev argued that “transparency and accountability” are at the heart of the case. But Sotheby’s maintains that confidentiality and discretion are crucial to the world of high-end art sales to protect clients’ identities, prevent theft and stop any potential poaching by other auction houses.

While Sotheby’s is known for its prestigious public art auctions, a significant part of its business is brokering private deals directly between buyers and sellers. Those private sales are a particularly shrouded corner of the art market, where work changes hands through dealers such as Sotheby’s and identities are concealed on both sides of the purchase.

Often an owner will have no idea to whom they are selling, and the buyer little clue from where the art is coming. Sometimes works are never even displayed — instead living in storage, passing from hand to hand.

Over multiple days of testimony, Samuel Valette — the global head of private sales at Sotheby’s who sold many of the works to Bouvier, the Swiss dealer who worked for years with Rybolovlev — detailed the process by which works, including Leonardo da Vinci’s “Salvator Mundi”, were procured for Bouvier, his top client at the time.

“My job was to make money for Sotheby’s,” Valette told the jury. He was Sotheby’s top salesperson for private transactions worldwide for the past three years, the auction house said. Sotheby’s takes a commission on the value of private sales, usually between 3 per cent and 9 per cent of the sale price of the art, though Sotheby’s said that can vary depending on the piece. Between 2018 and 2022, 86 per cent of all private sales involved art valued at more than $1mn, according to a Sotheby’s report.

For private sales Sotheby’s dealers search for works their clients are seeking, working internally to find willing sellers and negotiate a price. Emails showed Valette asking a colleague to have her client name a price for a René Magritte painting that Bouvier wanted. While the painting had initially been estimated by Sotheby’s to be worth less than $10mn based on previous auction data, the client was willing to part with it for $25mn. Bouvier purchased it from Sotheby’s for $24mn, and sold it to Rybolovlev shortly afterwards for $43.5mn.

Rybolovlev was the subject of many internal emails at Sotheby’s, which was keen to court him as a potential client. He featured on a spreadsheet circulated internally before large sales, listing clients alongside the highest figures they had ever paid for a work at auction. A number of high-profile Russian billionaires, including Roman Abramovich and Andrey Melnichenko, were active in the fine art market at the time, Valette said.

Rybolovlev made his fortune in fertiliser after the collapse of the Soviet Union, and is the owner of the Monaco football team. Among his other big-ticket purchases was a Palm Beach mansion he bought from Donald Trump in 2008 (who was attending his own court case next door) for a record $95mn, more than twice what Trump paid for it four years earlier.

Valette detailed the process by which the auction house representatives built relationships with ultra high-net-worth clients to encourage them to sell with Sotheby’s: “We are in the business of being chosen. By sellers and by buyers.”

Internal discussions among Sotheby’s specialists, including Valette, on current leads included “someone who will inherit a Modigliani”. While Sotheby’s did not specify if the client was in mourning, it indicated “it is not appropriate to visit at the moment”. It was concluded they would be invited to events in the south of France to build the relationship.

The highest-profile work at issue in the trial is da Vinci’s “Salvator Mundi”, whose sale at Sotheby’s in 2013 was code-named “Jack”. Valette worked with Bouvier and the sellers, who had purchased the painting at auction for about $10,000 and restored it. To make the deal, he travelled with one of the owners to Paris to meet a representative for Bouvier, who started negotiations with what he described as a “brutally low” offer of about $47mn. The sellers were hoping for at least $100mn.

Valette described the final dinner of the visit as “painful” and “chaotic” as they raced to make a deal. Late that night, a final purchase price of $68mn, plus a painting by Picasso valued at $12mn, was negotiated in exchange for the “Salvator Mundi”. Bouvier would sell the painting to Rybolovlev shortly afterwards for $127.5mn.

Four years later, Rybolovlev resold the work at auction, this time at Christie’s, for a record-shattering $450mn.

Emails show how as art valuations soared, margins of $5mn to $10mn on these “trophy” artworks felt like rounding errors. Over email in 2015, Valette expressed frustration when a colleague at Sotheby’s pushed back on his request for a higher valuation for the da Vinci painting two years after the original sale to Bouvier was agreed. The colleague said €95mn was “the most [he] could live with” but Valette told the court he thought “95 was too precise” and “an awkward number”, and pushed for €100mn, or about $110mn.

Valette said he wanted a big, round number. “In this world, if you’re at €95mn, you’re at €100mn, ” he said.

The valuation discussion was standard for the auction house, he said. “If you put 10 specialists in a room, you’d probably get 10 different opinions about what something was worth.”