What Happened?
A profound transformation has been quietly reshaping the art market's structure. Industry estimates now suggest that over 50 percent of all significant art transactions—those involving works worth millions—occur through private sales rather than public auctions or standard gallery channels. This represents a fundamental shift from the transparency of the auction room to the discretion of private negotiation.
This trend has accelerated dramatically in recent years. Major auction houses have responded by massively expanding their private sales departments, hiring hundreds of specialists dedicated exclusively to brokering deals outside their traditional sale rooms. Christie's and Sotheby's now employ larger teams for private sales than they do for their marquee evening auctions, reflecting where the market's center of gravity is shifting.
The growth of private sales is changing not just how art is bought and sold, but what information is available about the market, how prices are determined, and who holds power in the art ecosystem. It represents perhaps the most significant structural change in the art market since the rise of the contemporary art auction boom in the early 2000s.
Background
Private sales have always existed in the art market. Before the modern auction system developed in the 18th century, essentially all art transactions were private. Even after auction houses became central market institutions, dealers continued to negotiate private transactions for clients who valued discretion, wanted to avoid competitive bidding, or were buying works not suited to public sale.
However, the scale of private sales activity today is unprecedented. Several factors have driven this growth. First, the sheer increase in art market value over the past two decades created more high-value works that require discrete handling. Second, the rise of ultra-high-net-worth collectors who prioritize privacy in all their transactions extended to art buying. Third, the auction market's increasing transparency—with results instantly available online—made sellers more cautious about risking public failure.
The 2008 financial crisis accelerated the trend. As the market recovered, sellers and buyers increasingly sought ways to transact that avoided public price discovery. Auction houses, facing pressure on their traditional business, began building out private sales divisions as profit centers that generated revenue without the costs of catalog production, marketing, and sale events. What began as a supplementary activity became, for many houses, a core business.
The pandemic further supercharged private sales. With public auctions curtailed and in-person viewing limited, private negotiations facilitated by trusted advisors became the most efficient transaction method. Even as public sales resumed, many participants found they preferred the private approach and never returned to auction buying.
Analysis
The mechanics of private sales vary but generally involve an intermediary—auction house specialist, dealer, or advisor—bringing together a buyer and seller. The intermediary knows both parties' needs, can gauge appropriate pricing based on market knowledge, and facilitates negotiation toward a mutually acceptable price. Commissions are negotiable, generally lower than auction premiums, and the entire transaction can be completed with minimal public disclosure.
For sellers, private sales offer several advantages. There's no risk of a public bought-in (unsold) lot, which can damage an artist's market and the work's provenance. The process is faster than waiting for an appropriate auction slot. Costs are often lower, as sellers can negotiate commission rates and avoid catalog production expenses. Most importantly, privacy is maintained—competitors, journalists, and the general public need never know a work was for sale or at what price it transacted.
Buyers benefit from avoiding competitive bidding dynamics that can drive prices beyond rational levels. They also escape auction house buyer's premiums, though this is partially offset by commissions in the private sale. Like sellers, buyers value discretion; major collectors often prefer that neither their acquisitions nor their spending levels become public knowledge. Private sales also allow for more flexible payment terms and conditions than structured auction processes permit.
Intermediaries benefit from fees that, while potentially lower per transaction than auction commissions, apply to a much larger volume of business. They also build deeper client relationships through personalized service than would occur in the auction room. For auction houses, private sales generate revenue throughout the year rather than concentrating in selling seasons, smoothing cash flow and providing a buffer against weak auction results.
The shift has transformed the major auction houses organizationally. Christie's and Sotheby's have each built private sales teams numbering in the hundreds globally, organized by specialty area and region. These specialists operate more like dealers than auctioneers, maintaining extensive client relationships, scouting inventory, and negotiating complex transactions. Many come from gallery backgrounds, bringing relationship skills the auction business traditionally didn't emphasize.
Major galleries have also expanded into secondary market brokerage, recognizing that collectors they've built relationships with through primary market sales often seek assistance buying and selling works by other artists. This blue-chip gallery involvement in secondary market private sales blurs traditional distinctions between primary and secondary markets, dealers and auction houses.
Impact
The explosion of private sales has significant implications for market transparency and efficiency. Public auctions, whatever their limitations, create price data points visible to all market participants. This transparency helps establish price consensus, allows collectors to gauge value, and provides researchers with data for market analysis. Private sales, by definition, provide none of this.
The resulting information asymmetry benefits market insiders—dealers, advisors, specialists with extensive networks—who maintain knowledge of private transaction prices. These insiders can leverage information advantages when advising clients or making their own purchases. Meanwhile, outside collectors attempting to establish fair value for works lack the data points they would have in a more transparent market.
This can lead to market inefficiencies. Without clear price discovery, the same artist's comparable works might trade at significantly different prices in private sales, depending on the parties' information levels and negotiating leverage. While some argue this creates opportunities for smart buyers, it also enables information-based arbitrage that doesn't necessarily reflect artistic merit or market fundamentals.
The trend also affects how we understand market movements. When a major artist's work sells privately for a record price, this information may not become public, meaning the market continues to price based on outdated auction records. Conversely, if works are quietly struggling to find buyers privately, this weakness may not be apparent until it eventually surfaces in soft auction results months later.
For artists, the rise of private sales has mixed implications. On one hand, it can reduce market volatility, as private failures don't create the negative publicity of unsold auction lots. On the other hand, the lack of transparency makes it harder for artists to understand their true market position or advocate for appropriate pricing. The artist's power relative to intermediaries may diminish in a less transparent system.
From a broader market perspective, the shift toward private sales represents a maturation and sophistication of the art market, but also a move toward the opacity that characterizes other luxury asset markets like real estate or classic cars. Whether this is positive depends on one's perspective—market insiders appreciate the flexibility and privacy, while those favoring transparency and accessibility view it more skeptically.
Outlook
The trend toward private sales shows no signs of reversing. Several factors suggest it will continue to grow. First, as wealth becomes increasingly concentrated globally, the ultra-wealthy collectors driving the high end of the market will continue to value the privacy that private sales offer. Second, auction houses and dealers have built infrastructure and expertise in private sales that they'll continue to leverage. Third, sellers have learned that private sales can be more efficient and less risky than public auctions.
This doesn't mean public auctions will disappear. They serve important functions that private sales cannot: creating spectacle and excitement around trophy works, providing transparent price discovery for market-making sales, and offering a venue where multiple buyers compete for rare works. The major auction houses' evening sales will continue, but increasingly as showcases for exceptional works rather than the market's primary transaction venue.
For the market's future structure, we're likely moving toward a three-tier system. At the top, ultra-high-value works will transact almost exclusively through private sales brokered by specialists at major houses and galleries. In the middle, quality works will split between private sales and selective public auctions, depending on circumstances. At the entry level, public auctions and gallery sales will continue to serve as the primary venue for price discovery and access.
For collectors, especially those not deeply embedded in insider networks, this evolution requires adaptation. Building relationships with trusted advisors becomes more important than ever, as they provide access to information and opportunities not publicly available. Collectors must also become more sophisticated about valuation, developing their own expertise rather than relying solely on public price data.
The information challenge also creates opportunities. Collectors willing to do deep research, develop expertise in particular areas, and build networks can potentially find value that less informed buyers miss. In a less transparent market, knowledge becomes an even more valuable currency than in a transparent one.
From a market health perspective, the key question is whether the shift toward opacity undermines confidence. Markets function best when participants trust that prices reflect genuine value rather than information asymmetries or insider advantages. Maintaining this trust in an increasingly private market will require industry participants to uphold high ethical standards and resist the temptation to exploit information advantages.
The rise of private sales ultimately reflects the art market's evolution from a relatively small, specialist domain to a major asset class trading billions annually. Like other mature asset markets, it's developing more sophisticated transaction mechanisms that prioritize efficiency and privacy over transparency. Whether this evolution serves the art world well depends on whether it can maintain the trust and passion that make art collecting meaningful beyond mere financial transactions.