Sotheby’s and Tempo Gallery are presently negotiating over a deal that may see the public sale home make a big funding within the mega-gallery. Whereas nothing has been inked but, and the small print seem like very a lot in flux, a supply near the negotiations instructed ARTnews that it was not an acquisition, however a “three way partnership between Tempo and Sotheby’s that might be multifaceted and has many parts. Let’s name it a ‘new mannequin.’”
The information, whereas doubtlessly momentous, isn’t completely sudden for these within the trade. Rumors have swirled for weeks that Tempo has been in talks with Sotheby’s about both a significant funding, a merger, and even an outright acquisition.
Such a deal would come at a time when the artwork market is sluggish. All through final 12 months artwork sellers have spoken about robust market circumstances and a shaky monetary local weather. Tempo has a big overhead, sources stated. Along with branches world wide, the gallery has an eight-story, 75,000 sq. foot headquarters on twenty fifth Avenue in Chelsea. Opened in late 2019, amid a quickly rising artwork market, the constructing was CEO Marc Glimcher’s imaginative and prescient for Tempo’s future.
On the inaugural preview, Glimcher stated he foresaw a “communal area for pondering, transcendence, and contemplation” the place individuals may “come and take their time.” However the deal was all the time going to be a problem: in contrast to its mega-gallery friends, Tempo doesn’t personal the property or the constructing. The gallery reportedly pays greater than $700,000 per thirty days in lease on a 20-year lease to proprietor Weinberg Properties. That’s round $8.4 million per 12 months, not counting the $18.2 million inside construct out and the $80 million value of the constructing’s volcanic stone exterior. A Tempo spokesperson instructed ARTnews the reported figures had been inaccurate.
(A supply acquainted with Tempo’s funds instructed ARTnews that prices related to the Chelsea headquarters account for lower than 10 p.c of the gallery’s overhead, and was solely a 5 p.c enhance from the full prices incurred from the gallery’s earlier seven-story headquarters on 57th Avenue.)
Nonetheless, different prices to the gallery have come on account of the constructing: In 2022, Tempo was ordered to pay actual property agency CBRE $6.3 million in damages over its failure to pay owed commissions. Later that 12 months, ARTnews reported that Superblue, the experiential artwork middle largely funded by Tempo, had burned by most of its funding and deliberate initiatives had been being deserted. Glimcher stepped down from his management position on the firm in December.
This previous October, at Artwork Basel Paris, the primary 12 months the truthful was held within the opulent Grand Palais, Tempo allegedly pulled out of the truthful’s Public Mission after their proposal was accepted. In response to an adviser with data of the matter, the mission was canceled as a result of Tempo didn’t have the funds. “It was a extremely unhealthy look,” the adviser stated. (A spokesperson for Tempo denied that such a mission ever existed.)
However as they are saying, the place there may be smoke, there may be fireplace. And there was a variety of smoke.
“I wouldn’t say Tempo is on the market however they actually have been on the lookout for buyers for a very long time,” one supply acquainted with the gallery’s monetary scenario instructed ARTnews earlier this week.
Whereas the precise particulars of the Tempo-Sotheby’s deal stay unconfirmed, discussions between the 2 firms have been occurring on and off because the pandemic, when each concurrently adopted their purchasers to the tony enclaves of East Hampton and Palm Seaside. Within the Hamptons, Tempo and Sotheby’s opened outposts two blocks from one another, whereas in Palm Seaside, they had been situated—together with Acquavella Galleries—within the posh Royal Poinciana Plaza. The connection then expanded when Tempo and Gagosian made a transfer on the Macklowe Property, one supply instructed ARTnews, with Sotheby’s taking the place of Acquavella (the trio hoped to recreate the Glimcher-led coup that noticed Tempo, Gagosian, and Acquavella outbid each Christie’s and Sotheby’s to safe the Donald Marron property in 2020).
Sotheby’s has had its share of monetary challenges due to billionaire proprietor Patrick Drahi’s aggressive and artistic use of debt to fund acquisitions, and the general market circumstances. In January, the home reported a 23 p.c drop in consolidated gross sales in 2024, in comparison with the earlier 12 months and, final June, S&P International Scores downgraded Sotheby’s credit standing from B to B- on account of falling revenues and rising prices. The public sale home had two rounds of layoffs totaling over 150 staffers and closed the 12 months with a really public reversal on its overhauled payment construction, which was in place for simply seven months.
The public sale home did discover a renewed spring in its step after it closed a deal in October for Abu Dhabi’s sovereign wealth fund and funding firm, ADQ, to take a position a much-needed $1 billion life line, $800 million of which was earmarked for paying down the home’s $1.65 billion in debt.
What position the remainder of ADQ’s funding may play within the cope with Tempo is unknown. Whereas the Tempo-Sotheby’s deal, relying on the construction, may have speedy monetary advantages for Tempo, the case for Sotheby’s hinges on CEO Charles Stewart’s efforts since becoming a member of the home in 2019 to search out new methods to develop its world model energy and make the enterprise extra worthwhile. To date that’s concerned an expanded push into the secondary marketplace for luxurious items, together with vehicles, watches, and wine. Past auctions, Stewart has overseen brick-and-mortar growth that makes an attempt to shift the way in which Sotheby’s present and potential clients see the model. Lux retail-oriented areas in Hong Kong and Paris, full with eating places and wine cellars and area for live shows, style exhibits, telegraph that the agency intends to be a vacation spot for each sort of collector, quite than simply an public sale home.
Sources acquainted with Stewart say he has entertained the potential of working with a gallery previously. A partnership or funding with Tempo may give each Tempo and Sotheby’s higher entry to the collectors that gasoline their respective companies. Such a partnership could possibly be seen as a logical subsequent step to the position Noah Horowitz performed throughout his sojourn on the public sale home. In 2021 he took on the newly created title of worldwide head of gallery and personal seller providers and labored underneath Brooke Lampley, the home’s world chairman and head of effective artwork. Each have since left the corporate, Horowitz to turn into CEO of Artwork Basel and Lampley to turn into a director at Gagosian.
With Tempo as a strategic associate Sotheby’s may ramp up income from personal gross sales and achieve a broader perception into estates coming to market, whereas Tempo collectors may get entry to most well-liked charges with Sotheby’s artwork lending enterprise Sotheby’s Monetary Companies.
Then there may be the Breuer Constructing, former house of the Whitney Museum of American Artwork and, briefly, the Met and the Frick. Final 12 months, Sotheby’s spent a reported $100 million to safe the Brutalist landmark on Madison Avenue for its new headquarters. As lovely as it’s, insiders have expressed doubts that the area may accommodate an entire viewing of a marquee night sale, a lot much less places of work for the public sale home workers. One can think about that Tempo would possibly welcome handing off some area from its Chelsea headquarters for reduction on the lease.
Public sale homes have acquired galleries previously, resembling Sotheby’s buying Noortman in 2006 and Christie’s buying Haunch of Venison a 12 months later. Business insiders expressed skepticism about such preparations, nevertheless: neither of these galleries exist right this moment.
