The Idiocy of Reporting Auction Hammer Prices

First the NYT, now Bloomberg - what is going on with art auction reporting? Bloomberg's headline on the (RED) auction today is just plain wrong: "Hirst Cabinet Fetches $6.2 Million for Bono AIDS Sale". The story quotes lots of information from the Sotheby's press release, so it's not as though the reporters couldn't simply have followed Sotheby's lead and said that the Hirst cabinet sold for $7.15 million. That is, after all, the amount of money that the buyer paid.

But no: Bloomberg seems to be dipping its toe into the waters of hammer-price reporting - with highly embarrassing results. The hammer price on the Hirst cabinet was actually $6.5 million, not $6.2 million - Sotheby's commission was 10%, bringing the total price up to $7.15 million. It looks as though someone tried to reverse-engineer the hammer price from the stated total, and got the commission rate wrong.

In fact, Sotheby's seems to be getting very short shrift from Bloomberg in the whole article:

Hirst's cabinet, titled ``Where There's a Will There's a Way,'' brought in more than a sixth of the proceeds at the so- called (Red) auction at Sotheby's, which raised $38.7 million for HIV/AIDS treatment in Africa, beating its top estimate of $29 million.

Again, the Sotheby's press release very clearly says in its headline that the auction raised over $40 million for the Global Fund. Why would Bloomberg not include the money which Sotheby's is donating from its commission? The total commission charged was $3.87 million, and although some administrative costs are going to come out of that sum, the majority of it will end up being donated to charity.

My feeling is that if you're reporting on the price fetched by artworks, the headline price should always be the total price paid: the hammer price is a bit of a fiction really. Yes, it's useful if you're comparing the price paid to the estimate, since the estimate is for hammer price. But that's it. Certainly sticking to the auction houses' in-house convention would avoid silly errors like Bloomberg's today.