Sotheby’s and Tempo Gallery are presently negotiating over a deal that might see the public sale home make a major 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 shall be multifaceted and has many components. Let’s name it a ‘new mannequin.’”
The information, whereas doubtlessly momentous, is just not solely surprising for these within the trade. Rumors have swirled for weeks that Tempo has been in talks with Sotheby’s about both a serious funding, a merger, and even an outright acquisition.
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Such a deal would come at a time when the artwork market is sluggish. All through final yr artwork sellers have spoken about powerful market situations and a shaky monetary local weather. Tempo has a big overhead, sources stated. Along with branches all over the world, 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 house for considering, transcendence, and contemplation” the place individuals might “come and take their time.” However the deal was at all times 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 monthly in lease on a 20-year lease to proprietor Weinberg Properties. That’s round $8.4 million per yr, not counting the $18.2 million inside construct out and the $80 million price of the constructing’s volcanic stone exterior. A Tempo spokesperson instructed ARTnews the reported figures have been inaccurate.
(A supply conversant in 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 improve from the entire 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 yr, ARTnews reported that Superblue, the experiential artwork heart largely funded by Tempo, had burned by means of most of its funding and deliberate initiatives have been being deserted. Glimcher stepped down from his management position on the firm in December.
This previous October, at Artwork Basel Paris, the primary yr the truthful was held within the opulent Grand Palais, Tempo allegedly pulled out of the truthful’s Public Undertaking after their proposal was accepted. Based on an adviser with data of the matter, the mission was canceled as a result of Tempo didn’t have the finances. “It was a very dangerous look,” the adviser stated. (A spokesperson for Tempo denied that such a mission ever existed.)
However as they are saying, the place there’s smoke, there’s hearth. And there was plenty of smoke.
“I wouldn’t say Tempo is on the market however they actually have been in search of traders for a very long time,” one supply conversant in 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 corporations have been occurring on and off because the pandemic, when each concurrently adopted their shoppers to the tony enclaves of East Hampton and Palm Seashore. Within the Hamptons, Tempo and Sotheby’s opened outposts two blocks from one another, whereas in Palm Seashore, they have been positioned—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 because of billionaire proprietor Patrick Drahi’s aggressive and inventive use of debt to fund acquisitions, and the general market situations. In January, the home reported a 23 p.c drop in consolidated gross sales in 2024, in comparison with the earlier yr and, final June, S&P International Scores downgraded Sotheby’s credit standing from B to B- as a consequence of falling revenues and rising prices. The public sale home had two rounds of layoffs totaling over 150 staffers and closed the yr 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 might play within the take care of Tempo is unknown. Whereas the Tempo-Sotheby’s deal, relying on the construction, might have fast 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 seek out new methods to develop its international model energy and make the enterprise extra worthwhile. Up to now 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 enlargement 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 house for live shows, vogue exhibits, telegraph that the agency intends to be a vacation spot for each kind of collector, relatively than simply an public sale home.
Sources conversant in Stewart say he has entertained the opportunity of working with a gallery prior to now. A partnership or funding with Tempo might give each Tempo and Sotheby’s higher entry to the collectors that gas their respective companies. Such a partnership may very well 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 companies and labored underneath Brooke Lampley, the home’s international chairman and head of high-quality artwork. Each have since left the corporate, Horowitz to develop into CEO of Artwork Basel and Lampley to develop into a director at Gagosian.
With Tempo as a strategic associate Sotheby’s might ramp up income from personal gross sales and achieve a broader perception into estates coming to market, whereas Tempo collectors might get entry to most well-liked charges with Sotheby’s artwork lending enterprise Sotheby’s Monetary Companies.
Then there’s the Breuer Constructing, former house of the Whitney Museum of American Artwork and, quickly, the Met and the Frick. Final yr, Sotheby’s spent a reported $100 million to safe the Brutalist landmark on Madison Avenue for its new headquarters. As stunning as it’s, insiders have expressed doubts that the house might accommodate an entire viewing of a marquee night sale, a lot much less workplaces for the public sale home employees. One can think about that Tempo may welcome handing off some house from its Chelsea headquarters for reduction on the lease.
Public sale homes have acquired galleries prior to now, similar to Sotheby’s buying Noortman in 2006 and Christie’s buying Haunch of Venison a yr later. Trade insiders expressed skepticism about such preparations, nonetheless: neither of these galleries exist at the moment.
