Sotheby's, record losses of $248 million and falling revenues

Sotheby's losses more than doubled in 2024. The historic auction house, controlled by French-Israeli tycoon Patrick Drahi, ended the year with a negative result of $248 million, compared to $106 million in 2023. A heavy result, the result of the slowdown in the art market and high costs related to redundancies. According to documents filed by Bidfair Luxembourg, Drahi's holding company, commission income fell 18% to USD 813 million. The contraction in spending by major collectors, held back by geopolitical tensions and global economic uncertainty, weighed heavily.

But the accounts were also affected by another item: theovertime charges for redundancy. In 2024, they jumped to $29.2 million, almost three times the previous year's $11.4 million, despite the fact that the workforce only decreased by 24 (now 2,218 employees).

Breuer Building

To relaunch Sotheby's, Drahi has entered into a strategic alliance with Abu Dhabi's sovereign wealth fund ADQ, the third largest in the world. The agreement provides for a $1 billion investment in exchange for 24% of the shares, intended to reduce debt and support growth and innovation plans. Drahi still remains the majority shareholder. The bet is clear: transform Sotheby's into a global luxury hub. The testing ground will be in December, with Abu Dhabi Collectors Week, the first luxury auction event organised in the Emirate. From 3 to 5 December, Formula 1 cars, the fastest Aston Martin ever produced, rare diamonds, collectable Rolexes and other exclusive items will go under the hammer. The event will coincide with the Abu Dhabi Grand Prix, the Milken Institute Summit, Finance Week and Bitcoin MENA, turning the capital of the Emirates into a global showcase. In a promotional video, Sotheby's has already crowned Abu Dhabi as 'the new global capital of art, culture and luxury'.

Patrick Drahi, an art collector, built his fortune with the Amsterdam-listed telecommunications group Altice. Over the years, he expanded the business with a series of acquisitions and, until 2023, also held a 24.5 per cent stake in BT, later sold to the Indian conglomerate Bharti Enterprises. Today, it aims to write a new chapter in Sotheby's history, with the support not only of ADQ but also of the Abu Dhabi Investment Office, which will support the auction house in Collectors' Week. Sotheby's seems to be looking less and less at the heart of the art market and more and more at the world of luxury. The real bet will be to see whether the turn towards luxury and the Middle East - a rich market but with a limited art collector base - can really turn Sotheby's into an $8 billion giant, a goal that the auction house itself has reportedly denied.

Meanwhile, the gap with rival Christie's is widening: while Sotheby's pursues the path of lifestyle and experience, its rival seems to focus on the traditional value of art, the expertise of its experts and personal relationships with collectors.