Financial Fiascos: Choose Certainty Over Uncertainty

Burned once, but not twice. That could be the motto of Christie’s Auction House Chief Executive Officer Steven Murphy. Recently, he reportedly sold a well-known archaic Chinese bronze for around $20 million privately when it might have gleaned $50 million at auction.

“What in the world?” the art community asked. But, once again, the superficial is not the whole story.

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Murphy was no doubt influenced by his memory of a Christie’s sale in Paris in 2009. In that auction, 2 rare zodiac sculptures from the Summer Palace in Beijing were on the block. Yves Saint Laurent and Pierre Berge were selling them.

Though the objects had gone through several hands before Laurent and Berge, originally they were looted from the Summer Palace in Beijing by British and French forces in 1860 (during the Second Opium War). This left a bitter taste in Chinese mouths. The Chinese government felt sufficiently upset about the sale of what it regarded as its own property that the Chinese state-run media referred to the 2 heads as “war plunder” before the sale.

But the auction went well with the 2 pieces fetching $40 million as a pair. Though this sounds excellent, it wasn’t. The Chinese buyer who purchased the pair did not pay for them. Then, he added insult to injury and said that the heads should willingly be returned to China. This didn’t happen. Instead they were returned to the consignees.

When a similar object came to Christie’s New York, its CEO must have had a large dose of trepidation. Certainly, he did not want a repeat scenario of what happened in Paris. The private sale was an option for handling his fear and concern. By doing this, he could rest easier at night, not having to worry about whether the bronze, when sold, would be paid for.

Rather than uncertainty, he chose certainty. Though criticized by his staff, who would have received a commission on a larger sale, I would assume, Murphy did what many investors, except those who are danger seeking, would do. He chose less risk rather than more, even if it cost him and the company money.

Further Reading:

The Chinese are Buying! My personal story about selling an early Chinese lacquer box at Christies.

The Chinese are Buying (They’re Just Not Paying!) The conclusion of the lacquer box story.