Art Market
How Damien Hirst’s $200 Million Auction Became a Symbol of Pre-Recession Decadence
Damien Hirst poses with his workThe Incredible Journey at Sotheby’s art gallery and auction house in London, 2008. Photo by Shuan Curry/AFP/Getty Images.

Damien Hirst poses with his workThe Incredible Journey at Sotheby’s art gallery and auction house in London, 2008. Photo by Shuan Curry/AFP/Getty Images.

On September 15, 2008, Sotheby’s was set to auction off 223 brand new works by , including top-flight examples of his whole animals in formaldehyde, medicine cabinets, and spin paintings. It was an unprecedented incursion by an auction house into the primary market, and an unabashedly flashy sale accompanied by a global marketing tour with stops in Kiev, Aspen, and New Delhi. Sotheby’s produced a three-volume catalogue that cost approximately $240,000 to produce and put on a party for 1,500 guests, who nibbled foie gras wrapped in gold leaf. The auction was expected to bring in at least $120 million over an evening and day sale, with a high estimate of $176.5 million.
The morning of the sale, Lehman Brothers announced it was closing its doors with more than $600 billion in debt, the largest bankruptcy in U.S. history and the beginning of a financial crisis that would cause unemployment to top 200 million for the first time in history, wipe out $16 trillion in American wealth, and send the art market into a spiral that knocked $15 billion from its total sales.
The Hirst auction, which the artist had dubbed “Beautiful Inside My Head Forever,” exceeded all expectations, grossing $200.75 million over the course of two sales in the span of 24 hours and becoming the most expensive single-artist auction ever. The 56 lots at the evening sale went 97% sold, and the two lots that did not find buyers during the auction were sold before the night was over. Over a third of the buyers had never bought contemporary art before. On the cusp of a global recession, Hirst walked away with $172 million.
“I love art and this proves I’m not alone and the future looks great for everyone!” Hirst said in a statement after the sale, during which he was playing snooker at London’s Groucho Club, his personal assistant relaying the prices while on the phone.
Flooding the market with hundreds of works may have hurt his prices at auction, and ten years on, “Beautiful Inside My Head Forever” is remembered as a defining moment in the pre-recession contemporary art boom. It was a last gasp of decadence, punctuated with $18 million stuffed cows, and a risk that nearly torpedoed Hirst’s sky-high career.
But with Hirst’s market enjoying a healthy resurgence in 2018, the go-for-broke strategy that he perfected with the sale is still novel a decade later.  

Breaking all the rules

The dinner and party to celebrate the auction of artwork from Damien Hirst’s “Pharmacy” restaurant in Notting Hill, held at Sotheby’s New Bond Street auction house, London, 2004. Photo by Dave Benett/Getty Images.

The dinner and party to celebrate the auction of artwork from Damien Hirst’s “Pharmacy” restaurant in Notting Hill, held at Sotheby’s New Bond Street auction house, London, 2004. Photo by Dave Benett/Getty Images.

Damien Hirst had a history with Sotheby’s. In 2003, a pill-themed London restaurant called Pharmacy—a clubby spot that Hirst invested in, filled with his medicine cabinet works and butterfly paintings, and had a hand in designing—went belly-up. The restaurant’s current owner was planning on dumping all the ephemera—floorboards, lighting fixtures, cutlery, matchbooks—that had been, at least to some extent, designed by Hirst in the pharmaceutical theme. At the last minute, Hirst’s accountant and manager Frank Dunphy ran over to the restaurant and bought everything for £50,000. If they could sell the Hirst artworks that hung in Pharmacy, perhaps he could sell the Hirst-designed matchbooks and martini glasses, too.
Sotheby’s Oliver Barker, who at the time was a senior director in the contemporary department, suggested a very unusual kind of auction, which came to him as a vision when passing the shuttered Pharmacy space on the bus to work with his wife.
“I just had a brain flash: That could be an incredible auction,” Barker, who is now co-chairman of Sotheby’s European operations, told Artsy this week. “He could have gone to White Cube or Gagosian to sell butterfly paintings from the Pharmacy restaurant, but the only way to attract the highest value for all the fixtures—the costumes and the glassware and the furniture and the flooring—was really through auction.”
Dunphy was able to convince Hirst to go along with demented gambit, and when the sale was announced in July 2004, the British rags had a field day making fun of the ambitious prices listed for bizarre tableware and decor. “Anyone with a heartfelt yearning for a stool in the shape of an aspirin need not go away empty-handed: a set of six could be yours for a mere £700,” The Guardian wrote at the time. But then something wild happened—when the bidding opened in October 2004, everything sold, and for prices remarkably above the estimates. When Barker opened bidding on the first lot, a pair of martini glasses estimated to sell for £50 to £70, the paddles exploded, and bidding pushed the price to £4,800, nearly 100 times the low estimate. A pair of salt and pepper shakers, estimated to sell for an already pricy £40 if you considered how easy it would have been to steal them after dinner were you so inclined—well, they sold for £1,920. In total it made £11.13 million ($20.06 million), more than double the high estimate.
Hirst, who didn’t bother to show up, told Dunphy, “Suddenly my restaurant venture seems to be a success.”
When Barker noted it was the first and only time a living artist had consigned all of the work in a single auction, it gave Hirst and his business manager an idea.

A high-risk event

A gallery technician checks Damien Hirst's collection of artworks and original designs at the Sotheby’s sale preview of contents from the Pharmacy restaurant, London, 2004. Photo by Scott Barbour/Getty Images.

A gallery technician checks Damien Hirst's collection of artworks and original designs at the Sotheby’s sale preview of contents from the Pharmacy restaurant, London, 2004. Photo by Scott Barbour/Getty Images.

The idea of an all-new, all-Hirst auction came together over the next two years, born of a mutual desire between Hirst and Sotheby’s to one-up the Pharmacy sale.
Barker said that the high-clip pace of production at Hirst’s studio, Science UK Limited, was such that a body of work large enough to fill out an evening sale and a day sale could be created in a year and a half. Increasingly, Hirst started to feel like an auction was the best way to get the highest prices for them.
“All of us had been left with a taste in our mouths that Pharmacy wasn’t the last time we would work together,” Barker said. “We started thinking: Look, you could go into the auction ring with brand new work from the studio. Initially it was an idea that was quite shocking and quite scary.”
Taking work directly to market through an auction house would siphon millions of dollars from Hirst’s powerful dealers, Jay Jopling and Larry Gagosian. Hirst’s set up was typical of any in-demand artist at the time: He made work, and his dealers decided where to place it. Ordinarily, it is frowned upon when a vetted collector flips a work at auction. But Damien embraced that very act of betrayal and decided to pre-flip his own works to whoever could pay, with the support of Dunphy, whom he trusted more than his two dealers.
“Frank has my best interests at heart,” Hirst told The Economist in a story published before the sale. “Dealers say they do, but they don’t.”
Hirst volunteered to level with Jopling, his longtime confidant and friend. It was up to Dunphy to tell Larry Gagosian he was getting cuckolded. “Larry said, ‘It sounds like bad business to me,’” Dunphy recalled to The Economist in 2010. “‘It’ll be confusing to collectors. Why do you need to do this? We could continue in the old way.’”
The old ways were over. In July 2008, Sotheby’s announced that it would hold a special sale with that utterly Hirstean name of “Beautiful Inside My Head Forever.” The artist’s market had never been hotter—a year earlier he had set a record for a work by a living artist when the daughter of the Qatari emir bought a pill cabinet called Lullaby Spring (2002) for £9.65 million ($19.2 million)—but most thought the idea was a disaster.
“Is Hirst sabotaging his own market?” Sarah Thornton asked in The Art Newspaper, noting that many works of his at the Art Basel fair in Basel, Switzerland, a month before were left unsold. The writer Richard Bevan railed in The Art Newspaper that this amounted to a declaration of war from artist to gallery. One collector told Thornton, “I love Damien’s work, but his treatment of his business partners is abusive and selfish.”
Hirst himself seemed aware of the high probability of failure, but he was characteristically blasé about it. The day before the sale, Hirst told a writer for the New York Times about a recurring nightmare in which the sale begins and not a single paddle is raised.
“It’s risky I know,” Hirst said. “But it’s too late to worry now.”

A tsunami of financial doom

Auction of work by Damien Hirst at the Sotheby’s sale “Beautiful Inside My Head Forever,” 2008. Courtesy of Sotheby’s.

Auction of work by Damien Hirst at the Sotheby’s sale “Beautiful Inside My Head Forever,” 2008. Courtesy of Sotheby’s.

Meanwhile, the weekend before the sale, the heads of the major Wall Street firms held an emergency meeting at the Federal Reserve Bank of New York to try and forestall the collapse of the bank Lehman Brothers after the U.S. Treasury declined to bail it out. After a proposed takeover by Barclays fell apart Saturday, markets opened on Monday, September 15—the day of the evening sale portion of “Beautiful Inside My Head Forever”—to the news that Lehman Brothers had filed for bankruptcy. The Dow Jones Industrial Average plunged more than 500 points.
“As the sale got closer, it became clear that fairly unprecedented things were going on with the financial markets,” Barker recalled. “I remember waking up to the news that the bankers had decided not only to not bail out Lehman, but then that decision had precipitated this tsunami of financial doom, which started in the Hong Kong markets and gravitated west. By lunchtime in London, it was complete pandemonium.”
Dumphy had originally got dressed in a drab suit instead of his usual bow-tie get-up, as if he were going to a funeral, he recalled in the catalogue for an upcoming sale of his personal collection at Sotheby’s. He told me he was concerned because, as he put it, “if we fell flat on our face that would be bad for Damien’s market in the future.” Thing did seem precarious, Barker recalled. An auction with this much cache would usually have been choreographed ahead of time to ensure that there’s bidding, but they were mostly going in blind. None of the works were guaranteed.
“Beyond the very top lots, it was unknown as to how well it could do,” he said. “People were keeping their cards very close to their chest.”
But when Barker started off the bidding with an especially spastic spin painting looming behind him, it was quickly clear that there was little to worry about. No one hesitated—81% of the buyers were collectors themselves, with Russians, then the major force in the art market, snapping up a good chunk of the entire ensemble. Maria Baibakova, Vladislav Doronin, Victor Pinchuk, and Gary Tatintsian all bought works, and Alexander Machkevitch bought six works for a total of £11.7 million. The Italian collector and fashion designer Miuccia Prada spent £6.3 million on three carcass-in-formaldehyde works: a sheep, a calf and a fowl; she called the sale “an incredible conceptual gesture.”
At the end of the first evening, the haul with the buyer’s premium was £70.54 million ($127.2 million), ahead of the high estimate of £62.18 million ($112 million). Perhaps the art market was just, at least for the time being, immune from the perils of the global markets, as some economists believe that art objects were a sound investment in confusing times.
“Our sale was partly a result of the power of Damien, and the power of the product and the desirability of the work, but there was a bit of a flight to Damien from the financial markets,” Barker said.
Or, as the New York-based dealer Jose Mugrabi told the Times after the sale, “Today more people believe more in art than the stock market. At least it’s something you can enjoy.”

The last hurrah, and the last laugh

Auction of work by Damien Hirst at the Sotheby’s sale “Beautiful Inside My Head Forever,” 2008. Courtesy of Sotheby’s.

Auction of work by Damien Hirst at the Sotheby’s sale “Beautiful Inside My Head Forever,” 2008. Courtesy of Sotheby’s.

But like all markets during the recession that followed the Lehman Brothers demise, the art market took a hit, and many say the last gasp came with that legendary auction of dead fowl in formaldehyde, toasted with champagne and foie gras. “The longest bull run in a century of art-making ended on a dramatic note with a sale of 56 works by Damien Hirst,” The Economist wrote in November 2009.
By that point, the global art market was worth $50 billion, down from $65 billion in 2007, according to Clare McAndrew, the founder of Art Economics and author of UBS and Art Basel’s art market report. One major casualty of this downturn was Damien Hirst. In 2008, his average auction price was $831,000; by 2010 it was $136,000. “The perception of collecting Damien did suffer,” Barker admitted. In 2012 he left Gagosian, with the economist Don Thompson, who wrote the art market book The $12 Million Stuffed Shark, telling The Guardian that the dealer couldn’t afford to have an artist in his stable shed value so quickly, as it would erode the contract of trust he has with his collectors.
But in 2016, he rejoined Gagosian—“Great artists, like great people, have second acts,” Gagosian said—and in 2017 he staged another risky gambit. He would invest a chunk of his personal fortune to produce a monumental $65 million show across both of billionaire collector Francois Pinault’s colossal palazzos in Venice—a fever dream of ancient mythology and seafaring hijinks and Disney-esque theme park magic—called “Treasures from the Wreck of the Unbelievable.” After months of hype, the show was pilloried by critics.
Today, the global art market is once again hovering near its record highs, up to $63.7 billion in 2018, according to The Art Market | 2018, released by Art Basel and UBS. And with the economic recovery in its ninth year (and the gains unevenly tipped towards the wealthy), the global collecting elite are once again opening their pockets for Hirst. During the Venice Biennale, Hirst’s “Treasures” show was all anyone could talk about—and collectors were buying up a lot of it. By November, there were $330 million in sales.
This past January, Hirst filled Gagosian’s Beverly Hills space with a series of paintings that he actually painted himself, despite the fact that he is not known for his gifts with a paintbrush. The show sold out in days, with the larger paintings priced at $1.6 million. He had gone back to the “old ways” that Gagosian was trying to hold on to in 2008, while also—with the show in Venice—staging the ambitious stunts outside the gallery circuit like he did with the landmark 2008 auction.
Once again, Hirst succeeded by doing exactly what everyone thought would be his downfall. As Dunphy told Artsy, “The legacy of the ‘Beautiful Inside My Head Forever’ sale is that people felt he was a very clever businessman.”
“His belief in his own abilities really came through again,” Barker said. “The recent show in Venice, coupled with the recent shows at Gagosian Gallery, they were hugely successful as well. In a funny way, Damien’s really had the last laugh.”
Nate Freeman is Artsy’s Senior Reporter.