Sotheby's Amy Cappellazzo Tells It Like it Is

The art world powerhouse has a frank conversation with The Canvas' Jeremy Hodkin about working at the famed auction house.

by Jeremy Hodkin
Nov 17 2019, 10:45am

As part of our weekly digest, GARAGE will occasionally be sharing select interviews from The Canvas, an in-depth art world newsletter published by Jeremy Hodkin that takes readers inside the major galleries, auction houses, and art fairs, and interviews the power-brokers who run them. The full, unedited version of this article originally appeared in The Canvas' November issue which you can subscribe to here.

Amy Cappellazzo is perhaps the most recognizable person in the auction business. Filling the role that Larry Gagosian holds when the general public thinks of a gallery owner, Cappellazzo has achieved this fame not through any concerted effort or strategy, but rather as an unexpected byproduct of her relentless work ethic, appetite for entrepreneurial risk, and her rhetorical predilection toward the bold and quotable. [When she, Allan Schwartzman, and Adam Chinn sold their two-year-old advisory firm, Art Agency, Partners in 2016 to Sotheby’s for $50 million (plus up to $35 million in bonus incentives if achieved within five years), it shocked the art world and represented a new era in terms of how auction houses viewed themselves as full-service, 360-degree firms, in need of catering to all their clients’ needs in the face of increasing competition from the top mega-galleries. And of course, there was Nathaniel Kahn’s HBO documentary, The Price of Everything, in which Cappellazzo had the self-awareness to fill the role of market villain to Larry Poons’s noble artistic hero.

An auction world veteran, having worked at Christie’s for 13 years before starting AAP with Schwartzman and Chinn, Cappellazzo has a reputation throughout the art world for her unabashed and vociferous defense of the art market as an inherently capitalistic pursuit. And yet, despite her reputation as a hard-charging rainmaker, intently focused on crafting the best deals on behalf of her clients, Cappellazzo also possesses an entirely different, and decidedly less market-driven side that doesn’t always come through in her interviews, press appearances, and industry panels. She places a high degree of importance on mentorship, listing it as one of the key leadership attributes she looks for when identifying and promoting talent. As one prominent collector described her to The Canvas, “Amy is not only one of the sharpest, smartest people in the art market, but also someone who knows and appreciates art on a deeply intellectual level.”

Surrounded by various catalogue raisonnés and knickknacks given to her by clients over the years, Amy Cappellazzo and The Canvas sit for a wide-ranging discussion in her office ahead of Sotheby’s marquee November sales in New York. It represents the first time that she’s spoken since Patrick Drahi took Sotheby’s private after 33 years as a publicly listed company on the New York Stock Exchange. We discuss how she keeps her eye sharp for new artistic talent, what era of art history she most connects with, and whether she considers herself an auction house lifer.

The Canvas: I wanted to start off by bringing up an interview you did with Charlotte Burns and Glenn Furhman in 2018 for Art Agency Partner’s podcast. You asked Glenn how he keeps his eye sharp for young material. And you then went on to provide an analogy of riding in the car with your son. You were listening to liteFM, but he wasn’t a fan and wanted to switch it to a newer, hip-hop type station. And you told him that one day, the music he likes now would be classified as oldies and that he would struggle to listen to something his own kids liked. You finished up by relating it back to art by saying that “it’s inevitable that we become sort of sentimental for a particular time in the collecting cycle that sticks out in our memory.” What time or era in art history holds that sentimental place for you, and what do you do to keep your eye sharp for young and emerging artists?

Amy Cappellazzo: I’m going to answer that in reverse. In order to keep my eye sharp, I really just make sure that I’m constantly looking at things. One of the privileges of working at an auction house is that we get to see a ton of art come through our doors. But I still make sure to go to shows on weekends and generally see as much as possible. The thing that’s gotten harder is the sorting and sifting process. There’s just so much going on, and there’s just so much to try and follow and pay attention to. It’s an increasingly harder and harder process, but I still do it.

In terms of which period in art history is sentimental for me, I always think that people are sentimental for the time in which they came of age. I attended NYU as an undergraduate and I remember seeing some amazing exhibitions in New York while I was a student. For example, the era of Felix Gonzalez-Torres and Bob Gober was a very special, crazy time to be living in New York, and those were my early years. I almost have a hard time being objective when I price work from around that period because I love it so much. It’s important to be able to recognize where the love and passion is spilling over and creating a blind spot for your job and adjust accordingly.

"The art market is like the weather in that way. People should stop complaining about the weather and get an umbrella."

In multiple interviews you’ve bemoaned how artists’ price points rise from entry-level extraordinarily fast before they even have their second, third, or fourth solo show. In one particular interview you stated that “The acceleration of prices on the entry-level stuff is just so great that very few artists survive the glare.” I mean, you have to concede that the auction houses deserve at least part of the blame for this phenomenon with the way that in-demand primary-market darlings are rushed to auction these days. Would you agree with the premise and do you think the auction houses bear some of the responsibility for the sustainability and longevity of both individual artist’s careers as well as to the market as a whole? Or would you argue that the auction houses are just responding to market demand?

My feeling is that we all have to be thoughtful and judicious about how we interact with the market. For instance, whenever we see a young artist become super, super hot, we always encourage the vendor to price the work at a level that will catalyze deep bidding. You never want to price it to the heavens right out of the gate. We could be holier than thou and say, “We’re not going to take art for sale from young artists.” But to what end? Is that some kind of rule that we should follow religiously because it’s always right? Of course not. There are times when that would absolutely be the wrong thing to do.

But I don’t necessarily think it’s a bad thing in and of itself. It just is what it is. I don’t have a moral opinion about what kind of trading velocity or traction exists in the marketplace for young artists. I don’t have moral position on the fact that it’s raining today. Would I prefer it not to be raining today? Sure. But I don’t have a moral position on it one way or another. The art market is like the weather in that way. It is what it is. People should stop complaining about the weather and get an umbrella. Figure out how to cope it with it.

If an artist doesn’t ever want to sell at auction, then she should probably consider never selling any work except to her parents or her parents’ friends. But if an artist is going to sell a work of art for money, then she’s traded away the power and control over that painting. That’s just the first rule of business. That’s how the marketplace works. Honestly, dealers and MFA programs should work harder to educate artists on the way the market works so that they’re more adept and savvier about how the art world works by the time they reach a certain level of success.“ The art market is like the weather. It is what it is. People should stop complaining about the weather and get an umbrella. Figure out how to cope it with it.”

Do you think they’re not doing a good enough job of that now?

BFA and MFA programs? I’m pretty cozy and familiar with a lot of these places—I’ve been a long-time trustee at Pratt—and I don’t think most art schools do a great job of educating artists about the business end of things. I think they find it gauche and feel it is not their responsibility.

Amy Cappellazzo

Sotheby’s art business is essentially divided into three separate divisions. There’s Art Agency, Partners, the advisory firm that you and Allan [Schwartzman] started and sold to Sotheby’s in 2016; there’s the Private Sales Division which is run by David Schrader; and there’s the Fine Art Division which encompasses all of the auction sales. Your position at the house is fairly unique in that you transcend any one particular division. Can you walk me through how you advise a client on whether to offer a work at auction versus offering it privately. What are the factors at play?

The first thing I’d say is that clients have very different and personal reasons for wanting to sell something from their collection. So, it’s most important to figure out what’s personally most important to them. Do they want privacy? Is it publicly known that their company has dropped 25% in value, or will selling the marquee item from their collection at auction indicate to their friends and competitors that they’re doing poorly? Are they in a position where they don’t want their ex-wife to know they’re selling an asset? Or might they just be a risk-averse person who wants to avoid the uncertainty of an auction? So, there are a number of personal factors that are important and could come into play.

Timing is also important. If a client comes to us in December looking to consign a $10-$15 million picture that would largely appeal an American audience, then they’d have to wait all the way until the May sales in New York as it probably wouldn’t do as well if we sold it in Hong Kong or London. That’s an awfully long time to wait, depending on the initial factors that have led them to decide to sell in the first place. Taxes are also a factor. A client might be willing to take an offer that would be slightly less if it could benefit them from a tax standpoint in a given calendar year.

"I’m not interested in the perceived glory of having some amazing picture for sale if it’s a lousy deal at the end of the day."

And then, of course, we look at the object itself and try and figure out how it would best make sense to move through the world. If there’s really significant potential upside at auction, with a number of parties who might be interested in acquiring the work (as opposed to just one magical person who’d be willing to pay a high price), then the open market environment of an auction really does make the most sense. But look, if a certain piece might make between $2.2 million and $2.5 million at auction, but I have a private deal lined up that will net $2.4 million, just take the $2.4 million and move on. Some works of art really just have a ceiling on what they could be worth, and we try and let the data help steer those kinds of decisions.

I want to touch on Sotheby’s being taken private. A lot has been made about what this will mean for the house with a lot of focus going to the idea that the house can offer more competitive deals when trying to win trophy consignments in competition with Christie’s without having to worry about Wall Street’s eye on profitability. At the same time though, I’m guessing that none of you are particularly eager to be the first to lose money on a deal in this new era. So, in your own words, can you explain to me exactly what being private will allow Sotheby’s to do that you weren’t able to do as a public company? How will the house be better able to compete for consignments against Christie’s and Phillips?

There were aspects of being a public company that were interesting and which I came to appreciate over time. For instance, I genuinely think we were able to bring more transparency to the art market. If the entire industry were made up of public companies, then it would be a level playing field and an interesting marketplace. But since we were the only house that was a public company, it was a natural disadvantage. Clients were able to trust us more because we had to do more reporting, but we were hamstrung when the conversation inevitably turned to: “Are you giving me the best deal?” We couldn’t do stupid deals just because. We had shareholders that we were ultimately responsible to.

To be honest, I was often frustrated in my earlier life at Christie’s when deals were done that weren’t necessarily geared toward profitability. I care about doing good deals. I like fair deals. And I like to know that if I work really hard, and my team and I do a great job, then we’re compensated accordingly. If the house is just earning a fixed fee for an entire estate whether we work hard or don’t particularly work hard, then that’s less interesting to me. I’m not interested in the perceived glory of having some amazing picture for sale if it’s a lousy deal at the end of the day.

"The American mindset is very much, 'This is good for me for now.' I think the whole ‘lifer’ concept has become a rarer thing in American business, period."

With that said though, there are moments and opportunities when you have wonderful works, and if including a certain picture as a marquee item will help lure other business, then there are sometimes compelling reasons to make a deal that are not directly profitable in the short term. The problem that Sotheby’s faced as a public company really stemmed from the quarterly nature of the public markets. Auction houses are a seasonal business. Our third quarters—July, August, September—always stink because July and August have very few sales. That’s just the history and tradition of the art world and the art market. And since we almost always had a loss in Q3, as a public company we would then get whacked by analysts from other industries who didn’t really understand the art market, and our stock would drop accordingly.

And then on the inverse side, whenever we had a good quarter but wanted to take $10 million out of profits and invest it in technology or in renovating the building, we’d get punished for not returning that value immediately to shareholders. How could we grow and evolve this business in the 21st century—and specifically invest on the technology side—if the public market wasn’t allowing us to spend what we needed to spend in order to get there? So, Sotheby’s really just belonged as a private company. I wanted it to happen from the day I walked in the door. I thought that it would be best for the business itself.

Auction house specialists can usually be divided into one of two categories: lifers and non-lifers. The lifers are in it for the long haul. They love the auction houses. They love the pace. They love the security. And between you and me, they seem to usually be European. The non-lifers enjoy the auction houses in the short to medium-term, but ultimately, would like to branch out and start their own advisory firms, become individual advisors of some sort (like Tobias Meyer), or start their own galleries (like Emmanuel Di Donna or Brett and Dominique). Are you an auction house lifer, Amy? You’ve already left the auction business once only to be drawn back a few years later. For how many more years can I expect to see you up at the telephones?

That is an amazing question. I can’t believe you asked me that. You’re good. To be honest, I don’t really know the answer. I do think there’s something valid in the idea that my European colleagues here at Sotheby’s (and at Christie’s when I was there) tend to be lifers. I think the culture in Europe is still very much one of having a set job, and it being your job for life. Americans expect to be more peripatetic. Americans don’t even expect to live in one place, we expect to move. For instance, you’re from Florida but you’ve lived in New York for 10 years. This is now your home. That’s just America. The American mindset is very much, “This is good for me for now.” I think the whole ‘lifer’ concept has become a rarer thing in American business, period.

But I don’t know. It really is a great question. We’ll see. I will say this though; I’m an entrepreneurial person. I think many of my friends and colleagues would have said they were surprised I stayed at Christie’s for 13 years. That’s a long time for someone with my temperament and my way of thinking.

I want to wrap up by talking about someone particularly special in your life who sadly passed away a few weeks ago – Stefan Edlis. You and he were close. I think everyone who saw The Price of Everything could see that. And you’ve talked in past interviews about how important he was to you. From your perspective, what made him so special; not only as a collector but also just as a human being? And as a collector, do you think his death represented a changing-of-the-guard moment for the art world? Are there still collectors around who care as deeply about the art—and live in such close proximity to it on a daily basis—practically breathing it in?

Aw, I miss Stefan. I really do miss him a lot. I’m sure the whole city of Chicago feels the same way. I would say there are still collectors who are as passionate as Stefan was, but not many. Stefan was truly special. There never was nor ever will be another Stefan Edlis. It’s not possible. The uniqueness of his vision, of his mind, of his life and overall circumstance—there will never be someone else like that. He had one of the most searing and insightful minds I’ve ever seen. He also had no pretense to what he was doing.

What do you mean by that?

He didn’t posture. He didn’t take on an identity of an ‘intellectual collector’ or a ‘market-maker.’ He never pretended to be that dude. He was a self-made man and his intellectual curiosity is what defined and carried him through his life. And while he was social in the art world—he knew lots of people, he sat on boards, he and Gail went on trips with The Whitney—none of that mattered to him as much as the experience of the art itself.

I remember having a conversation with Stefan when he was selling Lichtenstein’s ‘The Ring (Engagement)’ at Sotheby’s and buying Warhol’s 1963 ‘Liz #3 [Early Colored Liz]’ that same season. I had just left Christie’s and was out on my own, and he gave me something very good to sell right as I left and started my own company as a way to support me and give me my first big boost. Speaking about the Liz, he said “You know Amy, I’m planning to give this big gift to the Art Institute of Chicago and this picture will probably be included. But I just want to live with it for a little while first.”

And when he said that, it reminded me of this time I once asked Charles Saatchi about Rauschenberg’s ‘Rebus’ which is one of the greatest paintings in the world and is now at the MoMA. He owned ‘Rebus’ before my time in the art world and I asked him what it was like to own it. And he said “Oh, you know, when I bought that painting it was in the early 90s when the market was way down. And even though I couldn’t really afford to have it, I just wanted to live with it for a year.” Stefan had that same mindset. It’s this knowledge and deep understanding that you never really ‘own’ anything. I don’t own this office. I don’t own the house that I live in. I don’t own my kids. I don’t own any art. I’m just a custodian for a certain period of time. If you’re able to have that mindset, then you’re the freest and most rich person in the world.