Park West Contracted Auctioneers Speak Out

The following series of articles or bulletins have been pieced together from information received from currently or recently contracted Park West auctioneers and other personnel. They are published here in the interests of the buyers and potential buyers of art at the cruise line art auctions, so that they can be fully aware of what they are dealing with, and in the interests of those many individuals who are being taken on, trained and employed as associates and auctioneers on the cruise ships, so that they may know their fate. The information has been provided to us by those who are concerned about the fate of the auctioneers.

Article # 1
Park West Gallery's Very Real Personnel Problems and Highly Questionable Solutions

The year 2007 was a bad one for Park West Gallery. In fact, it was the worst year on record in terms of sales.

But if 2007 was bad, 2008 was horrendous. Park West ascribes the last two years' crash in sales to the state of the economy. The credit crunch of 2008 seems to confirm this theory.

Whatever the actual causes of the situation, the consequences have been severe in terms of recruiting and keeping auctioneers. In 2007 and 2008 many veteran auctioneers have left the company because they could no longer earn the sort of money they were used to.

The Park West Auctioneer System

The auctioneers at Park West are independent, self-employed contractors that work for a company that is insulated from Park West called Plymouth Auctioneering, based off shore in the Turks in Caicos Islands, and they are paid on commission - or at least, they have been heretofore. They have expenses to cover out of their commissions including champagne, labor, an associate auctioneer or more than one, and an art steward or stewards. Park West also charges the auctioneers for promotional materials, rental of computers, credit card fees, rental of a scanner and so on. There are also fines levied for a variety of reasons.

All of these charges, expenses and fines add up. But top auctioneers were earning so much money prior to 2007 that they could absorb them without a problem. However, when sales slumped, the situation changed, and it changed so dramatically that many auctioneers would close out their month's accounting and find that, instead of a pay check from Park West, they got an invoice and not only did they not earn anything for all their month's work, they ended up owing Park West money.

Earning a Minus Paycheck

In the summer of 2008, the economy caught up with Park West, and sales nose-dived. It was like hitting a brick wall. It made 2007 look good. People stopped buying. This happened almost in concert with the credit crunch and the bank crashes - almost to the day. Sales almost stopped but attendance was still up, so the auctions continued to run, along with all their associated costs. With no money coming in to offset them, these expenses now became the concern and responsibility of the auctioneer.

The associate auctioneer was only making 1% of sales as a commission and this was paid by the auctioneer. But, the auctioneer had it worse. He had to cover the expenses. An art steward costs about $250 per week. It costs about $180 to $360 per auction to have labor set up and take down the auction. The costs for champagne vary from ship to ship but it could cost $30 per auction or even up to $300 per auction. Some cruise lines only charge the auctioneer cost for champagne, while others charge a reduced retail price. It is safe to say that it could cost an auctioneer anywhere between $200 and $600 per auction all told. Most 7-day cruise ships run two auctions per week. Park West had covered some of the expenses in a predetermined allowance, but it would not be uncommon to have an auctioneer on the hook for $400-800 per week. That's right, when an auctioneer got his statement for the month, he might find he owed money to Park West. It might only be a few hundred but it also might be as much as $1-3,000 or more per month. Imagine that. Not only was he working for no pay, but he now owed Park West that amount.

The Effect on the Auctioneers

Some thought it was just a hiccup in the market and stayed on until their contracts were up. Some left immediately. Many flat out quit and walked off the ships.

It's worth noting that only aboard a few star ships were the auctioneers still making money - maybe only 2-6 ships out of 65-85. So there was a mass exodus starting in late 2007 and really continuing in 2008. Some auctioneers were so deep in the hole that they decided to stay on the ships: they had no other choice but to keep trying. This probably did not and does not work very well for them. They just get deeper and deeper in debt to PW.

Serious Staffing Problems

Park West finally realized that they had on their hands a real problem with staffing the ships. Without auctioneers, their whole business model collapses. So they began talking about setting up a guarantee for the auctioneers and their associates. Rumors of this began in about October 2008, but nothing was actually implemented until January 2009. With this carrot on the stick many newly appointed auctioneers who have just moved up from associate were running the art programs and losing their own money. These new auctioneers have had the lead role in front of them for anywhere from 6-12 months and were hungry to gain the position of auctioneer – perhaps no one realized how critical and permanent the sales stall was. So they got into the auctioneer position and started running up their debt. Again, many left - just flat out quit. Now Park West had some very serious staff issues.

Keep in mind that the mark-up on the art is so huge that Park West still makes money on every single piece sold. The company may not be making the huge annual totals but are still probably operating at a profit. The only ones losing out here are the auctioneers and, to a lesser degree, the associates. Again, the only people suffering are the auctioneers on the front line. They are about to take it on the chin for Park West, but they do not really know this yet.

Solving the Staff Shortage - Secretly Stealing Employees from the Cruise Lines

So, Park West decided it could be facing a catastrophic staff shortage on the ships and started talking about a form of guarantee for the auctioneers. They ask them to stay on and be patient while they work on it. Many do but many don't. Then finally in Jan 2009 they unveiled and launched a guarantee for the auctioneers. This was done not only to keep staff but as a gimmick to aid in the recruitment of new staff.

The scheme involves a base guarantee for associates and auctioneers. This guarantee will be used as a tool to recruit and convert people who are employed by the cruise lines and as a general recruiting tool.

If the cruise lines knew that Park West was actually canvassing their contracted employees, they would probably be very upset. The roll-out of this guarantee creates a buzz on the cruise ships. Many cruise line employees are contacting Park West auctioneers directly on ships behind the backs of their employers. They are also put in contact with the Park West recruiter for confidential discussions and interviews. This is going on as we speak. It is not uncommon for a cruise line employee to have a face-to-face interview with a Park West Gallery representative while the ship is in port.

Park West just finished a month long recruiting contest for auctioneers. "You will be paid $500 if your candidate is approved for training and another $500 if they are assigned a ship." As of February 9th and at the completion of the contest they have listed 97 referrals, 22 of which have been approved to go to training so far. That is 97 referrals, many of whom are currently working under contract on the ships, 22 of whom will probably attend training when their contract expires and not go back to work with the cruise line they are employed by. Stealing employees from your own business partner is unconscionable. It’s also risky when your business partner finds out.

The Park West Auctioneer Guarantee

The guarantee is $500 a week for associates and $600 per week for the auctioneer in the first 14-week contract, $800 per week for the second 14-week contract and $1000 for the third 14-week contract. Any auctioneer out beyond the third contract does not get a guarantee. The associates get a flat, weekly salary of $500. The auctioneer pays some of this. But here is the hook: the guarantee is NO guarantee of income. It is simply applied against the auctioneer's expenses.

Remember the figures above: the auctioneer can easily clock up several hundred dollars in expenses every week. The guarantee does not even cover that. So if sales stay the way they are, the new, starry-eyed auctioneers will end up in the same hole that swallowed up all the others who are no longer with Park West.

And if the cruise lines find out that Park West has been offering a bounty to its auctioneers to seduce their staff away from them, the atmosphere in which the auctioneers will have to work - that is if they are allowed to remain on board - will be very sour indeed.

Read more articles: Park West Contracted Auctioneers Speak Out

Advocacy

Art Advocacy Articles ›