Sotheby’s Sees Earnings Tumble 88 Percent in First Half 2024

Blue-chip auction house Sotheby’s reported an 88 percent decline in core earnings and a 25 percent drop in auction sales for the first half of 2024, according to theFinancial Times, which was able to review an internal document sent to investors. The dip in earnings—to $18.1 million—reflects those before interest, taxes, depreciation, and amortization, a measure of profitability known as EBITDA. Adjusted for costs such as severance pay, lawsuits, etc., the decline in EBITDA—to $67.4 million—is a still-steep 60 percent. Sotheby’s revenue in the year’s first half fell 22 percent, to $558.5 million.

The document showing the abovementioned figures was issued ahead of a $1 billion investment by Abu Dhabi’s sovereign wealth fund (ADQ), announced in August and expected to be completed by the last quarter of 2024. The auction house in June reported more than $1.8 billion in net “long-term debt”; according to theFT, it will use roughly $700 million of the ADQ investment to “reduce leverage”—that is, to decrease its debt load. Sotheby’s—which went private in 2019 after French telecom billionaire Patrick Drahi bought it and its extant debt for $3.7 billion—currently has $4.3 billion in liabilities.

The auction house’s financial woes come as the art market appears to be softening, with sales declining, galleries closing, and top sales brass departing or being let go. Christie’s in July announced a 22 percent drop in auction sales in the first half of 2024 compared to the last half of 2023. Sotheby’s this past spring announced layoffs following two comparatively quiet contemporary and modern art sales weeks in London and New York. Among the factors believed to be exerting negative pressure on the art market are the wars in Ukraine and the Middle East, China’s uncertain economy, and the forthcoming US presidential election.

Artforum has reached out to Sotheby’s for comment.