Despite its prestigious brand, Sotheby’s has long been grappling with less than polished finances. But by dint of some creative financial gymnastics — and an improving art market — it has now managed to buy itself some wiggle room.
For a while, things looked distinctly ropey. Its 2019 purchase by aggressive financier Patrick Drahi left Sotheby’s laden with debt. The Luxembourg-based vehicle that holds the auction business, as well as Sotheby’s lending business, real estate and some of the acquisition debt, had $3.1bn in net borrowings at the end of 2024, or over 11 times adjusted ebitda. Its interest costs of $280mn swallowed up all of its operating profit, and more. The last time it made a pre-tax profit was in 2020: unhelpful ahead of a $765mn debt maturity in 2027.
