The Wall Street Journal-20080202-WEEKEND JOURNAL- Entertainment - Culture -- Art- Who Will Bring Home the Bacon-- Despite Wall Street Turmoil- Auction Houses Express Confidence- New High Expected for British Painter

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WEEKEND JOURNAL; Entertainment & Culture -- Art: Who Will Bring Home the Bacon?; Despite Wall Street Turmoil, Auction Houses Express Confidence; New High Expected for British Painter

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Although many art buyers are worried about the turmoil on Wall Street, the auction houses are raising the stakes. Next week, in London, Christie's and Sotheby's will hold their first major art auctions of this year. Both companies have impressionist/modern and contemporary sales valued significantly higher than last year.

Christie's expects to gross as much as $573 million, up from the $86 million it brought in from the same set of sales five years ago and a marked increase over last year's $392 million. Sotheby's, citing space and resource issues, is so confident about sales that the company is breaking away from the traditional schedule and holding its contemporary sale as a stand-alone auction at the end of the month. (Christie's refused to follow, keeping its sale put). Included in the sales are some of the most expensive paintings ever sold in Europe at auction. Christie's is offering a Francis Bacon triptych and Sotheby's a set of three self-portraits by Andy Warhol. The Warhol is estimated to fetch upward of $20 million; the Bacon, $50 million.

Possibly the priciest picture to sell at a European auction, the colorful triptych by Mr. Bacon has already elicited interest from dozens of collectors, according to Jussi Pylkkanen, president of Christie's Europe. The work, painted by Mr. Bacon after his lover committed suicide, may set a new record for the artist, catapulting him to the ranks of other top sellers such as Rothko and Picasso. Other highlights include a $12 million (estimated) masterpiece by Gerhard Richter, "Zwei Liebespaare," which uses shades of gray to depict two couples, entangled in one another's arms, enjoying the countryside.

Sotheby's will also offer a Bacon painting, this one with less buzz but more garish purple color than its Christie's counterpart and estimated at $36 million. A full-length depiction of a female nude with a male onlooker reflected only in a sidelong mirror, the painting explores themes of voyeurism and desire. Other highlights include Mr. Warhol's "Three Self Portraits," a set of three silkscreen-portraits by the artist. Dealers say Sotheby's wants $24 million for the works. That's a steep price, since a similar single "fright wig" portrait -- in which Warhol dons a white wig -- sold for just $2.9 million at Sotheby's London auction last February.

The art market, particularly its contemporary sector, has boomed in recent years -- even as other asset classes have crumbled, or experienced volatility. While an index of old masters paintings, compiled by Art Market Research, shows an increase of nearly fivefold in the last decade, a similar index of contemporary art has shot up ninefold since 1997. Many of the pieces included in the London sales, including the two Bacon paintings, reflect the upswing in pricing. The record price for a Bacon shot up from $15 million in 2006 to about $52.6 million in 2007, as collectors were willing to pay anything to get their hands on the cryptic canvases by the British artist.

In the last half of 2007, confidence in the art market dropped 40%, according to a survey published last month by ArtTactic, a research firm located in London. Based on data collected from 155 key international art collectors, dealers, auctioneers, and advisers, the survey calls attention to the dip in confidence that followed the credit crunch.

Mary Hoeveler, managing director of Citi's Art Advisory Service, says that while her American clients have adopted a cautious stance ever since the summer's subprime crisis hit, her foreign clients have begun to take on a guarded attitude as well. "People are nervous -- everyone is watching what is happening," says Ms. Hoeveler. "The kind of returns we have seen in the contemporary market, that level of growth, is not sustainable."

James Sproule, a London-based economist who studies the art market, asserts that the "super rich" have rescued the art market from earlier downturns -- but that they might not do so this year, causing prices to plateau, and then dip. "The ultra rich, while they are not price sensitive, are still value sensitive, and won't pay up prices that are beyond the value of artworks," he says.

Many bidders, especially those involved in global industries, remain upbeat. Switzerland-based diamond and jewelry magnate Laurence Graff -- who consigned about 30 paintings, mostly contemporary, to Christie's last year -- says that the art market will stay healthy because liquidity will always be available in certain sectors. About a dozen of the paintings that Mr. Graff consigned will be sold in next week's Christie's sales. Mr. Graff also plans to make a bid on Mr. Bacon's triptych, the most expensive offering at Christie's contemporary sale next week.

Mr. Pylkkanen, president of Christie's Europe, says he feels measured confidence about the coming auctions. "Oil prices are high so we've seen some significant buying from the Middle East and Asia -- it's a much more global market," he says.

Christie's will hold the first of the London auctions, featuring its impressionist and modern offerings next Monday. Sotheby's will hold its own impressionist and modern sale the following evening. Sotheby's says that it pushed its contemporary sale to a separate week from the other auctions because the sale has grown so large that the company decided to focus all its attention on it.

The split in the auction schedule aggravates collectors and dealers who must travel to London twice this month in order to participate in the major sales. "I had no idea about the schedule change," says art advisor Philippe Segalot, who buys for Francois Pinault, Christie's owner. "But it is a real pity -- I'm sort of afraid to choose between the two auctions."

Second-tier auction houses like Bonhams and Phillips de Pury are happier to take sides. Bonhams, capitalizing on the business Christie's will bring to town, will hold its contemporary "Urban Art" sale next week, while Phillips has moved its only coming London auction to the end of the month, coordinating with Sotheby's.

Sotheby's will hold its contemporary art evening sale on February 27, a full three weeks after the traditional auction week. Amy Cappellazzo, international head of post-war and contemporary art at Christie's, says that the additional time gave Sotheby's a significant advantage in commanding consignments from collectors who were too late for the Christie's sale. She adds that Sotheby's as well as Phillips' sale will be stronger this year for that reason. (Sotheby's agrees that the extra time did give the company an advantage.)