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Posted By: barrysloate

Yes, Sotheby's is guaranteeing a certain minimum to the seller in advance in order to secure the collection. Sometimes the guarantee is above what the collection might be worth, but the auction house takes the risk that with spirited bidding it will exceed their expectations, thus covering their bet. Usually it works, but apparently the sale from a few days ago did not do well. And it is possible they took a loss. This is what the high stakes auction game is about.

If a collection sells for far above the guaranteed amount then both seller and auction house can make more money. It all depends on their agreement.