It has since been revealed that the owner of that particular Picasso was casino magnate Steven Wynn, an active buyer and seller of art. Gorvy’s story, especially the details about the “poor photo reproduction” and the fact that Wynn sent his plane instead of having the auction house spring for business-class seats, suggests that Wynn was courting Christie’s as much as Christie’s courted him. The deal they shook hands on was a guarantee for the painting most likely in the region of the $55-million-dollar estimate.

When someone is going to offer you $55 million for a fairly small painting, you send your plane for them. There may have been other terms to the deal but, in the end, the work sold for $67 million with the auction house fees and Christie’s probably made decent money.

There were other sharp players who sold works in the sale, including hedge-fund magnate Steven Cohen. His Dubuffet was estimated at $25 million—a clue to the guarantee he received—but sold for slightly less money. Auction house experts can be sharp deal-makers but few people ever out-trade Cohen, who has previously made good money on guarantees from Sotheby’s as well.

Hiccups and miscalculations aside, the story of Gorvy and Gouzer paying a call on Wynn reads more like two studio execs paying obeisance to a fading star who can still open a movie. The guarantee might not be a three-picture deal, but it smells like a Hollywood megastar’s multi-million-dollar guarantee with backend points, much more than a conventional art deal.

And why not? The evening auctions are marquee events that require big names to attract punters. An auction house’s competitive advantage in the marketplace rests on its knowledge of the buyers and sellers. Christie’s knows where a lot of art is because the works were bought through the house in the first place. Its specialists spend much of their time getting to know collectors to hear what they’re interested in buying but also to learn more about what they already own.

Crossing those two streams of information is the auction house’s tradecraft. But it often takes more than knowledge to facilitate a deal. Here’s another example:

The “Looking Forward to the Past” sale had only a few works by Andy Warhol, who, like Picasso, is a pillar of the art market. One was a silver Liz Taylor diptych that Christie’s had sold five years before for $18 million. Knowing the demand for these types of works, Gorvy and his crew secured the painting with a guarantee. Their hope was a bidding war would ensue. They were disappointed. Silver Liz sold at the low end of Christie’s estimate range–but still enough to have made a $10 million gain. That’s a 60% rise in five years.

The big question haunting the art market is whether the guarantees are eroding auction profits. The problem with guarantees is that the downside of a short sale is often a greater risk than the upside value when the guarantee works and the bidders engage.

Christie’s got the Picasso pricing right. It looks like it got the Warhols a little less than right. In November, Gorvy sold an orange Warhol called “Five Deaths” for $11.3 million. It is likely that his specialists noted there were a number of disappointed underbidders who did not get the painting.

So Gorvy’s team reached out to the buyer of a turquoise version of the work—Warhol did many works in assorted colors—that had sold at Sotheby’s the year before for $7.3m. They must have offered the owner $10 million because that was the hammer price of the orange version in November. Rich people are just like anyone else. Give them the opportunity to make 40% or more on their money in 18 months and they’ll take it.

In the end, the turquoise “Five Deaths” sold for less than the orange version. Together with the fees, Christie’s took in $9.7 million, probably losing a few hundred thousand on the adventure. Was it the color? Or did the previous underbidders simply move on from that type of Warhol to something else? It could have been anything. Sequels often don’t measure up.

When studios pay the top price for stars, stories and directors, the studio acquires the risk but also the reward. Over roughly the same period as the auction houses have been guaranteeing paintings, video entertainment has settled into three tiers: studio blockbusters; high-quality, imaginative entertainment underwritten by cable channels, Netflix, Showtime or HBO; and the unfettered, sink-or-swim world of You Tube.

New stars are emerging from YouTube. And the video service’s mastery of advertising has made it possible for some of those stars to be paid like, well, stars too. But, for the most part, YouTube’s success has led getting adopted by the world of corporate entertainment.

The art world increasingly resembles this structure, too. In art, there are now places like Saatchi Art where individuals can bootstrap themselves toward visibility. In this analogy, the oft-maligned gallery system is much like the world of cable channels and subscription services, where smart, in-touch programmers allocate capital to the most promising talent.

The stars of subscription service television get promoted to the studios, where they get a shot at the big budgets.

Given all of that, we shouldn’t wonder that the auction houses are behaving more like movie studios that can no longer take a risk on smart, indie films, but must search for properties that can perform like blockbusters. When a studio boss greenlights a picture, the stars and director are guaranteed their fees. They do the work with little or no risk, but benefit along with the studio if there’s an upside.

Using guarantees, the art market operates in the same manner now, too. Consignors only give up their works when the risk of failure is removed. It’s the auction house’s job to know and to cultivate the kind of demand that will push the selling price past the guarantee. If art wants to continue its upward trend, it may have to accept that the auction business is now the guarantee business.

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