How a Billionaire Owner Brought Turmoil and Trouble to Sotheby’s

When Patrick Drahi, a fifty-five-year-old French Israeli telecommunications billionaire, agreed to buy Sotheby’s, one of the world’s two great auction houses, early in the summer of 2src19, people in the art market had two questions: Who is Drahi? And what does he want?

On a superficial level, buying an auction house is the kind of thing that French billionaires do. Christie’s, a rival of Sotheby’s since the seventeen-sixties, has been owned by François Pinault, a French luxury-goods magnate and prolific art collector, for the past quarter century. A former banker who worked with Drahi described the acquisition to me as an heirloom. “Think about your obituary,” he said. “Are you likely to be recalled for having done many cable deals, or having owned Sotheby’s?”

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But Drahi, who had a net worth of around eight billion dollars, seemed to come out of nowhere. Although a spokesperson described him as a connoisseur with “an encyclopaedic knowledge of classical music and paintings particularly,” he wasn’t considered a major player in the art market. Artprice, a French art-sales database, reportedly listed Drahi as the two-hundred-and-fifty-second-biggest art collector in the world.

Moreover, unlike Pinault and Bernard Arnault, another French luxury-goods billionaire, who used to own Phillips (an auction house that, like Sotheby’s and Christie’s, was founded in London in the eighteenth century), Drahi did not seem eager for a public profile. Whereas Pinault and Arnault were household names in France and had major foundations, Drahi was more elusive, dividing his time among Switzerland, Israel, and the Caribbean island of Nevis. “He is not in Paris. He is not in New York. He is not in London,” a person close to Drahi said. “He is not where his counterparts are. He is not spending a single minute in any cocktail or public event.”

Sotheby’s was also unlike any other company that Drahi had ever owned. Between them, Sotheby’s and Christie’s conduct about twenty per cent of global art sales—ten to fifteen billion dollars a year—but they are, in many ways, esoteric organizations. Employees, dealers, and art advisers liken the duopoly to a pair of medieval guilds, or sports teams, or theatre companies, doomed and inspired in equal measure by a state of permanent competition. “People feel such a connection to the company,” one longtime Sotheby’s employee, who recently left the auction house, said. “For many of them, it’s just so much of their whole lives. And putting together an auction, it’s like putting on the big school play.”

Until then, Drahi had done business almost exclusively in the telecommunications sector. He was the founder and main shareholder of Altice, an international cable, TV, broadband, and mobile-phone provider that was named for a sacred grove in ancient Greece. He had a reputation as a formidable dealmaker with uncanny confidence in his own judgment. “He doesn’t think outside the box,” the Drahi associate said. “He thinks there is no box.” A former telecom banker who worked on several transactions involving Drahi in the early two-thousands chose three adjectives to describe him: “One, smart. Two, aggressive. Three, utterly unsentimental.”

Drahi has been referred to as a wizard of debt. “He has built, since Day One, all of his companies with debt,” the associate said. His appetite for risk meant that Altice’s fortunes, and his own, could dramatically fluctuate. But he seemed to thrive, rather than wilt, during such situations. “He likes it. He likes it,” the associate said, as if to emphasize Drahi’s unusual fortitude. The first banker told me, “Very rarely do you find people that are able to master the numbers but also the brinkmanship,” adding, “You could say, ‘Well, what for?’ But, you know, that’s a Nietzschean question.”

The Drahi takeover valued Sotheby’s at $3.7 billion. Employees got their first glimpse of the new owner at an all-staff town hall at the company’s New York headquarters, on York Avenue, in early October, 2src19, on the day that the deal was finalized. The meeting took place in the main salesroom, on the seventh floor, and consisted of a question-and-answer session with Tad Smith, the company’s chief executive. Smith, a former C.E.O. of Madison Square Garden, was an assiduous, somewhat robotic character, who had been appointed four and a half years earlier to modernize the auction house, which was the oldest company listed on the New York Stock Exchange.

For years, it had been axiomatic among Sotheby’s employees that the auction house would benefit from having a single, rich proprietor, as Christie’s did. “Looking back, I realized Tad was brought in to sell the company,” a former senior executive told me. The last private owner of Sotheby’s was Alfred Taubman, a charismatic Midwestern mall developer, who bought the auction house in the early eighties and helped to transform it into a glamorous retail experience. (Taubman was later convicted of colluding with Christie’s to fix pricing and spent ten months in prison, but he is still fondly remembered at Sotheby’s as a pioneer of the modern art market.)

In person, however, Drahi did not make a big impression. “He was not an Alfred Taubman. He’s not a larger-than-life person. He’s just the opposite,” the longtime Sotheby’s employee said. “I found him a little geeky.” Drahi emphasized that he was buying the auction house for his family. (Within days of the deal going through, all four of his children were given Sotheby’s e-mail addresses.) He stressed his admiration for the Sotheby’s brand, but he also warned that the company would be run differently from now on. “I make quick decisions,” another former executive recalled him saying. “Most of the time, they’re right—sometimes they’re wrong. And if they’re wrong we fix them. But I don’t like getting stuck in the past.”

“I don’t think anyone was terrified, but they certainly weren’t reassured,” the former executive said. Drahi’s previous acquisitions were associated with brutal restructurings and, often, declining levels of service. In the French media, Drahi was caricatured as a “cost killer.” Soon after Altice bought the New York-based cable company Cablevision, he told a conference, “I don’t like to pay salaries. I pay as little as I can.” In 2src17, Drahi gave a speech that was broadcast to employees around the world. “If you want the comfort and stability of a large bureaucracy,” he said, “Altice is not for you.”

In early, private meetings with Sotheby’s senior staff, Drahi came across as highly intelligent but also caustically blunt. “He just says whatever he’s thinking,” the former senior executive said. Another recalled, “He walked in like he knew the business and what he needed to do.” A third described their meeting as perplexing: “He kind of philosophized, and then asked a couple questions that seemed really out of left field.” A fourth executive warned Drahi that he would face resistance if he tried to change the company too fast. “He said, ‘That’s fine,’ ” the executive recalled. “ ‘I don’t mind breaking things.’ ” Drahi confided that he thought that the auction house employed too many people and that its senior staff were overpaid. But when he was asked at the town hall whether he was planning any layoffs, he said that he didn’t think so. “All I was thinking was, Wow,” a fifth executive said. “They are poring over the company right now, looking for cost reductions.”

During the creation of his telecom business, Drahi was admired for his ability to see where the industry was going. “He was really good at managing the cycle,” the former banker said. “Most people will borrow at the wrong time, buy at the wrong time. He seemed to be able to get it right.” In the fall of 2src19, the stock price of Altice USA was around thirty dollars a share. The global art market was enjoying a long, resounding boom. The most expensive art work sold at auction that year was “Meules,” a haystack painting by Claude Monet, which was bought for a hundred and ten million dollars, at a Sotheby’s evening sale in New York. “The longer you spend buying it, the longer you’ll spend enjoying it,” the auctioneer, Harry Dalmeny, urged bidders.

But the timing of Drahi’s acquisition of Sotheby’s was unfortunate. Six months after the deal was completed, the coronavirus pandemic shuttered the art market. The main auction houses, led by Sotheby’s, scrambled to take their business online, but public sales fell by around a third. Then, for a while, the good times roared back. But now the art market has become a stressed and anxious realm, enduring its first prolonged contraction in a generation.

During the same period, Drahi’s broader business empire has experienced the worst crisis of his career. After amassing sixty billion dollars of debt, Altice was hit by rising interest rates while seeing indifferent performance by its brands on both sides of the Atlantic. In the summer of 2src23, one of Drahi’s closest business partners was arrested following a corruption investigation. Altice USA’s shares currently trade for around $2.5src, less than a tenth of their price in 2src19.

All the while, Sotheby’s has assumed a new, unstable identity: as both a billionaire’s indulgence and the subject of his latest corporate experiment. At a hearing in the French Senate in 2src22, Drahi said that he did not buy Sotheby’s for power or influence. Instead, he intended to triple the value of his investment. “This is always the goal of the entrepreneur,” he said.

For those caught up in the experiment, it has been torrid in the extreme. Since 2src19, hundreds of employees have left Sotheby’s—up to a quarter of the workforce, according to some estimates—including dozens of specialists who bring in the consignments essential to the company’s bottom line. (Sotheby’s disputes this.) Last year, sales fell by twenty-three per cent. As the auction house has cut costs and shed staff, its holding company, which is controlled by Drahi, has extracted more than a billion dollars in dividends from the business—mainly to manage its debt load.

Last fall, after a round of layoffs, Drahi sold a minority stake in Sotheby’s—close to a third of the company—to ADQ, the Abu Dhabi sovereign wealth fund, for around a billion dollars. The move gave rise to speculation that he might sell the business outright. But people close to Drahi insist that he is more likely to give up his telecom holdings, at least in Europe, than to let go of Sotheby’s. “This is for his grandchildren,” the associate said.

The question is what he will leave behind. Drahi and his team wouldn’t be the first, or the last, corporate titans to trip and stumble in the vagaries of the art market. “This is niche,” a leading New York art adviser told me. “And if you don’t get it, this is what happens. They’re not art people. And maybe they can never be art people.” But the other version is that Drahi is deliberately hollowing out one of the world’s great auction houses, turning it from an institution of taste and knowledge into something much closer to a generic platform that sets a price for things that have no price, taking a cut along the way. To make Sotheby’s more like everything else, in other words. “I think if he could automate this business, just put it online, take out all the people . . . that’s his goal,” a former director said. “It’s just pure money.” But was it ever about anything else?

The word “auction” comes from the Latin auctio, which means “increase.” But it’s always been a bit more complicated than that. In the fifth century B.C.E., Herodotus described the Babylonian custom of selling girls for marriage. The more attractive ones were sold first, with ascending bids; then the process was turned on its head, with “the plainest” won by the suitor who would accept the smallest dowry. Auctions can be as varied as human desire. There are whispered auctions in Italy and simultaneous-yelling auctions in Japan. For years, cod was sold in the fish market at Hull, in northern England, by descending bids (the Dutch method) before switching to English, or ascending, bids later in the day. Seventeen miles downriver, in Grimsby, fish auctions worked the other way around.

In 193 C.E., the Roman Empire was sold to the highest bidder, one Marcus Didius Julianus, giving rise to a memorable case of buyer’s remorse. “He passed a sleepless night; revolving most probably in his mind his own rash folly,” Edward Gibbon reflected. (Emperor Julianus was murdered two months later.) Auctions are built on an illusory symmetry of hope. Buyers sense a bargain, sellers hope for a war. What you want is validated because someone else wants it, too. Everyone believes in their own capacity to master the situation. In 1662, Samuel Pepys, the London diarist, watched three ships auctioned “by the candle” (the length of time it took a one-inch candle to melt) and noticed that one bidder was particularly successful: “He told me that just as the flame goes out, the smoke descends, which is a thing I never observed before, and by that he do know the instant when to bid last.”

The task of the auctioneer is to dramatize the possibilities of the sale while attempting to control them at the same time. “To get the audience’s confidence right away, and after that to dominate it—in the nicest possible way,” Peter Wilson, a legendary Sotheby’s chairman, told this magazine, in 1966. Wilson, a former British intelligence officer, led the company’s expansion into the U.S. market and introduced the first evening sales—with ball gowns and television cameras—in the fifties. Even today, when people complain that much of the excitement of live bidding has disappeared, salesrooms at the major auction houses retain a singular atmosphere of politesse and extortion. Money is present like sin in church: sometimes its presence goes unsaid; sometimes it is the only thing being said.

One Tuesday in early March, I stopped by Sotheby’s Modern and Contemporary Evening Auction in London. The equivalent sale in 2src23 brought in more than two hundred million dollars and was led by a Wassily Kandinsky landscape that sold for forty-five million. This year, the top lot was a large, hypnotic study of a girl, “Cosmic Eyes (in the Milky Lake),” by the Japanese artist Yoshitomo Nara, with an estimate of less than a quarter of that. The mood was brittle and unsure. Earlier in the day, tariffs imposed by President Donald Trump had unnerved global markets.

A few minutes before the auction began, the walls were lined with Sotheby’s specialists, arranged sharply by the phones, while people in cashmere and expensive anoraks milled about. Oliver Barker, the company’s star auctioneer of the past decade, tucked in his shirt. Barker always looks happiest when the bidding is in “a new place,” which means that a fresh competitor has entered the fray. The rest of the time, he is more like a solicitous but firm personal trainer, asking for one more rep. “Give me six, please, Alex,” he said, not really asking, to Alex Branczik, a chairman of modern and contemporary art, who was wrangling the Nara’s lead bidder over the phone. Barker wanted another hundred thousand pounds. “It’s here at six million five hundred thousand,” Barker said. “Want to give me six?” Branczik gave him six.

There were outbreaks of what the auction houses like to call “determined” or even “passionate” bidding. Lisa Brice’s “After Embah,” a bold, reddish mise en scène featuring a silhouette of Nicki Minaj, sold for £4.4 million, a record for the artist. A dark Alberto Burri, “Sacco e Nero 3,” from 1955, shot through its high estimate, to four million pounds. But most of the contests were thin and quick. A van Gogh drawing once owned by Taubman (“much loved at Sotheby’s here,” Barker said) sold on a single bid for less than its estimate. “Give me a bid, sir,” Barker pleaded, dropping the bid increments as he attempted to shift a large gray Christopher Wool canvas on the wall to his right. Again, Barker extracted a single offer, and again below the estimate. The Wool was sold in fifty-one seconds. In all, the evening sale—Sotheby’s first major auction of 2src25—raised a little more than sixty million pounds, including fees, around forty per cent less than the previous year.

Even people intimately involved with the big auction houses can’t figure out whether they are great or terrible businesses these days. Given that Sotheby’s charges a “buyer’s premium”—essentially a commission—of twenty-seven per cent on all lots up to a million dollars, and often a seller’s fee on top, the margins should be tremendous. “It’s never not been profitable,” the longtime employee insisted. It’s just that the profits are so much harder to come by. At the height of the eighties art boom, Sotheby’s made an annual profit of a hundred and thirteen million dollars. Twenty-five years later, in 2src14, at the peak of the next wave, the auction house made just twenty-nine million dollars more—the price of a mid-range Basquiat.

Part of the problem is the sheer expense of keeping the show on the road. Sotheby’s and Christie’s feel fancy because they are. Sotheby’s has premises in forty countries. At the time of the Drahi acquisition, it employed more than fifteen hundred people. The cost of parties, marketing, shipping, insurance, and the decorous administration of nearly five hundred sales a year only ever drifts one way. “You basically make profit in December,” a Paris-based art adviser who used to work for one of the big two told me. “Until November, you pay the fixed cost of the company.”

A major auction house has many parts. “Sotheby’s is really three businesses, which had been run as one business,” a former employee who joined under Tad Smith told me. Since the late eighties, Sotheby’s has offered loans and other financial products, secured against art (in fact, anything that the auction house will sell) as collateral. When Drahi acquired the company, Sotheby’s Financial Services was lending around eight hundred million dollars a year.

Next, there is everything under a million dollars in value: the wine, the jewelry, the furniture, the sneakers, the watercolors, the Hermès handbags. These are the collectibles—a nice watch, a decent painting, a rare manuscript, the family silver—that have kept the auction houses ticking for the better part of three centuries. The average price of a Sotheby’s lot is still around fifty thousand dollars.

And then there is the top end. And the top end is where everything goes to hell. According to the consulting firm Arts Economics, less than half a per cent of works sell for more than a million dollars, and yet these lots make up more than half the total revenue of fine-art auctions. An even smaller fragment—sales of more than ten million dollars—contributes around a quarter.

Sourcing sensational objects to sell has been the central mission of Sotheby’s since Samuel Baker offered “several Hundred scarce and valuable Books in all branches of Polite Literature” in the house’s first recorded auction, in March, 1744. It is the motivating mission of the specialists—hundreds of experts, in everything from Judaica to barometers, whiskey to Himalayan art—who are the primary business-getters for the company. But the unstopping competition between the big two auction houses, especially in the realm of fine art, has put extraordinary power into the hands of the people who have those things to sell. “Everything’s on the table,” Richard Polsky, an art authenticator in New Mexico who has helped to negotiate major sales at both Sotheby’s and Christie’s, told me. “If you have a great painting by an artist who’s in heavy demand, they’ll do anything for you. It’s crazy, but they will, and they often lose by doing anything.”

“It’s almost like a concert rider,” the former Sotheby’s executive said. Routine requests have included putting a photo of the work on the front cover of the auction catalogue, with a scholarly-looking essay about it inside. Other asks might include a travelling exhibition or a facsimile made of the original. Seasoned consignors want propitious placement in the sale: near the start, but not too near. (Works just before the star lots often have low estimates, to encourage bidding and to improve the atmosphere in the room.) Important sellers often request Barker as their auctioneer.

And that’s before you get to the substantive negotiations. Top sellers won’t pay a seller’s fee. They probably want a minimum guarantee. (If the bidding goes higher, they will split the upside with the auction house or a third-party guarantor.) Or they might prefer a portion—even the majority—of the buyer’s premium, the basic income of the auction house, an arrangement known as “enhanced hammer.” And if they don’t get what they want they will go down the road to the other place. “You’re trying to squeeze every dollar out of these guys,” Polsky said, “and you don’t feel bad doing it.”

Some of these “bespoke terms” go back decades. In June, 1956, according to “Rogues’ Gallery,” by Philip Hook, Wilson offered a presale guarantee of thirty-five thousand pounds for Nicolas Poussin’s “The Adoration of the Shepherds,” in order to break the grip of London’s private dealers on the sales of Old Masters. Sometimes the bet pays off; sometimes it misfires. (Sotheby’s lost six thousand pounds on the Poussin.) But the relentless increase in the value of the most expensive art works—frequently engineered by the auction houses themselves—has meant that negotiations with consignors have become only more vexed. The objects that everyone so desperately wants to put in the salesroom have become, in a real sense, too expensive to make money from. “Essentially, in order to win business, you’re throwing out the baby with water of the bath,” the French adviser said.

“I would say, for the longest time, the profitability of something was not on the minds of the specialists chasing after things,” a former Sotheby’s chairman told me. (The top-ranked specialists are known as chairmen.) In 2src15, Dan Loeb, an activist shareholder, led a revolt against the company’s then C.E.O., a rug expert named William Ruprecht, describing Sotheby’s as an “old master painting in need of restoration.” Smith, who had an M.B.A. from Harvard, was installed as his replacement.

Smith accelerated the breathtakingly slow digitization of the auction house. (Sotheby’s didn’t have a Facebook account until 2src11.) He upgraded the company’s technology, introducing an online auction platform, code-named Viking, at a cost of some fifty million dollars. In 2src16, Sotheby’s acquired Art Agency, Partners, an art-advisory firm led by Amy Cappellazzo, a former chairman of postwar-and-contemporary-art development at Christie’s, to improve its margins at the top end of the market.

Under Smith, Sotheby’s became more mercantile and more systematic, but it didn’t always make better bets or have a deeper understanding of what it was selling. “The temperature changed,” a specialist who worked in the contemporary department at the time told me. “Things got very tight, and people became much more concerned with how much they were bringing in and how much they were selling.” Dozens of employees, including veteran experts, took buyouts and left. Clients and dealers registered a diminished emphasis on connoisseurship and its replacement by what is sometimes referred to as “collector’s taste”—a phenomenon not limited to Sotheby’s. (A London dealer told me that he recently visited the house of a client who, instead of naming the artists of his paintings, labelled them by where they were acquired—Gagosian, Zwirner, Christie’s—like they were designer loafers.)

In the spring of 2src18, Sotheby’s lost money on a thirty-six-million-dollar Picasso and barely broke even on a hundred-and-thirty-eight-million-dollar Modigliani. In the years leading up to the Drahi takeover, during the greatest art market that the world had ever seen, the company’s stock zigzagged around thirty-six dollars a share—the same level that it had been in 2src1src. It was the Romans, auctioneers of their own empire, who came up with job titles for the people involved: dominus, the seller; argentarius, the organizer; emptor, the buyer. Caveat emptor—buyer beware. No one knows how much Drahi understood about what he was buying in 2src19. “I could truly think that he bought Sotheby’s thinking, This is run the old-fashioned way by a bunch of morons who know about art but don’t know about finance,” the French adviser said. “I think he felt that Sotheby’s was completely virgin of all that. And it’s not true. It’s a super, super thin business.”

François de Mazières, the mayor of Versailles, encountered the work of Drahi in 2srcsrc7. That is when ivory-colored cabinets started appearing on street corners in the Versailles Grand Parc, a collection of eighteen upscale districts west of Paris. The cabinets were for broadband connections and belonged to Numericable, a recently formed cable company.

At the time, Europe’s telecom industry was in a phase of creative destruction, as upstarts and established companies made bets on which technology—wireless, cable, or A.D.S.L., a form of data transmission through existing telephone lines—would best deliver the internet. Drahi, who had a postgraduate degree from Télécom Paris, one of the country’s top engineering schools, was a cable guy. Starting in 2srcsrc2, he had begun to acquire small regional cable companies with the aim of building a national network. In 2srcsrc5, Altice, with a group of private-equity investors, paid five hundred and twenty-eight million euros for the assets that became Numericable.

Mazières didn’t have a grasp of the finer points of the telecom industry, but he did notice one thing about the new cabinets: they were made of plastic. “They were of such bad quality, you could kick them open with your foot,” he told the French journalist Elsa Bembaron, for her 2src17 book “The Network Ogre,” about Drahi. “The wires were visible. In a town like Versailles, it was unacceptable.”

Drahi prided himself on doing things more cheaply than his rivals. “A large group counts in millions, I count in cents,” he liked to say, according to Bembaron. In the sleepy world of French regional telecommunications, his methods could be shocking. After another acquisition, in 2srcsrc6, one of Drahi’s companies found itself the object of simultaneous protests by its customers and its employees.

There was an outsider’s swagger to some of Drahi’s behavior. “He has spent his life by being the challenger,” the associate said. Drahi was born in Casablanca, Morocco, in 1963. His parents, Lucette and Marcel, were math teachers from Algeria. The family, which was Jewish, moved to Montpellier, in southern France, when Drahi was fifteen. According to Bembaron, he was small and somewhat conspicuous, because of his North African upbringing and his head for math.

Between 2srcsrc2 and 2src13, Altice acquired twenty companies. For a long time, Drahi ran the corporate affairs of Numericable—which had around four million customers in France—out of an apartment in Geneva. When he had to conduct a news conference for Numericable in Paris, he would reportedly use the basement of an electronics store on the Avenue de Friedland, near the Arc de Triomphe. He designed Altice’s logo himself.

In the spring of 2src14, Drahi bought SFR, France’s second-largest cellphone network, in a deal that was ultimately worth seventeen billion euros. The negotiations made Drahi a figure of national attention. He was attacked for his management style and his residency in Switzerland, which he maintained for tax reasons. “I was suspicious,” Arnaud Montebourg, the French minister of industrial renewal at the time, told me. In person, however, Montebourg found Drahi to be charming and impressive. “I knew he had to do a restructure,” Montebourg recalled. “But I said, ‘Be careful. I don’t want blood on the walls.’ ”

Drahi promised unions that there would be no job cuts at SFR for three years. Sana Iffach, a commercial manager at the company, remembered meeting him in the fall of 2src14. Iffach was in a conference room with about ten colleagues when Drahi walked in and asked why a projector screen on the wall was on, wasting energy. He made them switch it off.

Drahi was accompanied by a man whom he did not introduce. Iffach wondered whether he was Drahi’s driver. She later learned that he was Armando Pereira, a former subcontractor from Portugal, who ran the operational side of Altice. Like Drahi, Pereira was entirely self-made. By the age of thirteen, he had worked as a fairground assistant and a plumber, later immigrating to France. In the eighties, Pereira founded his own telecom subcontracting firm in the Vosges. He and Drahi started working together in Cavaillon, a Provençal town famous for its melons, where Pereira’s company installed connections for Sud Câble Services, one of Drahi’s first cable ventures. Pereira became a co-founder of Altice and, although he shunned publicity, his technical know-how was understood to be a critical part of the company’s success. “Pereira was seen to be an exceptionally good operator,” the former banker told me.

Iffach got used to seeing Drahi and Pereira at SFR’s headquarters, normally at the end of the week. She and her colleagues started calling their visits Dark Fridays, riffing on the weekly eliminations on “Koh-Lanta,” the French equivalent of “Survivor.” Within a month of Altice’s acquisition of SFR, fifty-five of its seventy top managers had been fired, according to Bembaron. Once the moratorium on cutting jobs passed, SFR announced plans to eliminate five thousand roles––around a third of the workforce. Drahi later compared the company to a “Daddy’s girl” who didn’t look at her credit-card receipts. “But today the father has changed, and my daughter doesn’t behave like that,” he told French legislators.

One of the ways SFR changed was by delaying payment to its suppliers. “Usually you have one case, two cases, ten cases,” Pierre Pelouzet, a mediator who was appointed by a union of French I.T. companies to collect unpaid invoices from SFR, told me. “But a hundred companies coming together? It’s fairly unusual.” When Iffach arrived for work one morning, in March, 2src18, there were notices stuck to SFR’s front entrance from its water supplier, warning of reduced flow to the building because of unpaid bills. “The Drahi method is, I pay you thirty per cent less,” she said.

Financiers sometimes laughed at the brazenness of Drahi’s methods. “They told investors that this is what they were going to do,” Jonathan Chaplin, a telecom analyst, said. “Everyone thought they were geniuses.” Chaplin began following Altice when it broke into the U.S. market, in 2src15, by agreeing to buy Cablevision and, a year later, Suddenlink for a combined total of around twenty-five billion dollars. It was a period of heady expansion for the company. Altice also bought the former state-owned telecommunications network Portugal Telecom, where Pereira was installed as chairman.

In corporate filings, Altice described its approach to business—which included an aggressive combination of outsourcing and cost-cutting techniques—as the Altice Way. The company boasted that its “founder-inspired owner-operator culture” set it apart from other cable and cellphone businesses in every market that it entered. And it was true that, everywhere the Altice Way was enacted, it looked more or less the same: suppliers were replaced by cheaper alternatives, employees were fired, and debt rose.

It is unclear how successful the Altice Way was as a business strategy. Between 2src14 and 2src16, SFR lost two million subscribers. Its share price fell by forty-five per cent. Between 2src18 and 2src22, when Suddenlink was rebranded as Optimum—along with Altice’s Cablevision brands—it went from being above average to the worst of twelve internet-service providers, as ranked by the American Customer Satisfaction Index.

But the Altice Way was certainly profitable for Drahi and his closest associates. SFR surprised analysts by paying out a €2.5-billion dividend to its investors, led by Drahi, a year into his ownership. The Altice Way was many things, but it was not free. Drahi used Next Alt, his personal holding company, based in Luxembourg, to charge subsidiaries for implementing it and for his own “strategic services.”

Ahead of its I.P.O. in the U.S., in 2src17, Altice USA disclosed a fee of thirty million dollars a year for “executive services” to Altice N.V., its parent company, which was controlled by Drahi. Altice’s brands in Israel and the Dominican Republic contributed a similar amount in 2src15. In a speech in Paris about ten years ago, Bembaron writes, Drahi talked about which financial indicators he thought were the most important. “When analysts talk about operating margin, about EBITDA”—a standard measure of business performance—“what I look at is the N.I.P.,” Drahi said, breaking into English. “Net in the pocket.”

The Altice Way reached Sotheby’s in the fall of 2src19. On October 2nd, the day of the Drahi acquisition, the company was formally split into parts. Sotheby’s Financial Services became a subsidiary, as did BidFair Property Holdings, which would control the auction house’s York Avenue headquarters. (Another corporate vehicle would hold the company’s British properties.) Although the auction house was now owned, ultimately, by Drahi’s personal holding company, he contributed only about two hundred and fifty million dollars in cash to the purchase price. As a result of the deal, Sotheby’s debts doubled, to more than a billion dollars.

Drahi insisted that Sotheby’s had nothing to do with Altice or the rest of his businesses, but, when the takeover was complete, employees at the auction house found themselves in meetings with Dexter Goei, the chief executive of Altice USA. “That was very, very strange to me,” the former executive recalled.

Smith, the C.E.O., left Sotheby’s in late October and was replaced by Charles Stewart, the forty-nine-year-old former co-president and chief financial officer of Altice USA. Stewart was new to the art market, but staff found him smart and personable. Soon after he arrived, he took fifty of Sotheby’s most senior employees to the New York Stock Exchange, to show them a heritage business that had transformed itself into a global digital trading platform.

But people sizing up the incoming regime wondered whether Stewart was really in charge. “Charlie’s a bit of a figurehead,” the former employee said. “He likes standing in front of sports cars.” The new C.E.O. didn’t seem to belong to Drahi’s innermost circle, whose members had license to roam across his business interests. “You’re usually male, French, or Israeli—or all three,” the former senior executive said. (A spokesperson for Drahi disputed this.) Many inside the company came to believe that Drahi’s true lieutenant was Jean-Luc Berrebi, the company’s new C.F.O., who had previously run Drahi’s family office.

Another curious figure who started working at the York Avenue offices was Yossi Benchetrit, Armando Pereira’s son-in-law. At the time, Benchetrit also held two senior roles at Altice USA: the company’s head of procurement and its chief programming officer, in charge of negotiating broadcast deals on its cable networks.

In the fall of 2src19, Benchetrit met with the auction house’s suppliers—of everything from catalogue printing to art shipping and software—and sought to renegotiate their contracts. Benchetrit had a ponytail and a mild manner. “He kind of looked like this aged hippie,” the former longtime employee said. Soon afterward, staff started hearing reports that specialist suppliers to the auction house—such as conservators, who repair damaged paintings—were having to wait longer to get paid. “There’s only, like, three people in the world who can do this,” one former executive told me. The executive recalled confronting Benchetrit about the issue, but he maintained his Zen demeanor. “He was, like, ‘Who needs to be paid? We have the power. We’re Sotheby’s,’ ” the executive said. (Benchetrit could not be reached for comment.)

When COVID hit, Sotheby’s was able to adapt quickly, thanks partly to Viking, the online platform developed during the Smith era. On the evening of June 29, 2src2src, Sotheby’s carried out the first white-glove sale of the pandemic—ahead of Christie’s—with Barker addressing eight screens in Bond Street as he took bids simultaneously in London, New York, Hong Kong, and online.

“Everybody put their big-boy pants on,” the longtime employee recalled. Drahi had been an enigmatic presence at the company since the takeover. (During lockdown, he joined an all-hands Zoom from his house in Zermatt, Switzerland, with a magnificent view of the Alps behind him, and complained that he was having to iron his own shirts.) But he flew to New York for the sale. Drahi stood off camera while a ten-minute bidding contest unfolded over the evening’s top lot, Francis Bacon’s “Triptych Inspired by the Oresteia of Aeschylus,” which sold for $84.6 million. “Tonight, we redefined the boundaries of what is possible,” Barker said. The mood at the auction house was jubilant.

In 2src2src, Sotheby’s new management reduced the company’s costs by about a hundred million dollars. It also renegotiated the compensation of senior staff. The best-paid specialists and executives at Sotheby’s earned more than a million dollars a year. Previously, around half of their income came in the form of bonuses and company stock. But now some of them accepted lower salaries and many were enrolled in one of two new long-term-incentive programs, which would pay out in three or four years’ time.

Senior staff were shown presentations that envisaged Sotheby’s rapidly increasing in value as it followed a fresh strategy, which would involve deploying the auction house’s name across a range of new businesses, including hotels, and sales categories—most notably in the domain of luxury goods. The company already owned a twenty-five-per-cent stake in RM Sotheby’s, a classic-car auction firm. Under Stewart, this stake increased to seventy-five per cent, and the company’s lending business expanded. The incentive program forecast that, in the best-case scenario, Sotheby’s would be valued at more than eight billion dollars—at least twice what it was worth when Drahi took over. “They actually promised people wealth transformation,” the specialist said. (The company denies this. “We were ambitious in our growth agenda, but nothing was ever promised,” a spokesperson said.)

In 2src21, Sotheby’s secured the Macklowe Collection—one of the most sought-after auction-house consignments in years—with a reported guarantee of more than six hundred and fifty million dollars. The collection came to market after the divorce of Linda and Harry Macklowe, a New York real-estate developer, and included masterpieces by Mark Rothko, Jackson Pollock, and Cy Twombly. For Sotheby’s, the sale of the collection—in two auctions—represented the final act of the staggering art bazaar of the twenty-tens. Bored by the pandemic and awash in stimulus funds, the global rich hit the scene one last time. In 2src21, Sotheby’s recorded sales of $7.3 billion—the largest in the company’s history.

“It was a high,” the former specialist said. The company’s dealmakers felt it. Before Drahi, bonuses at Sotheby’s had been fairly stable. The only time that senior staff could remember not receiving an annual bonus was during the financial crisis, in 2srcsrc9. In the following years, bonuses typically paid out between eighty-five and a hundred and thirty per cent of their target figure. “It would never be, like, something radically different,” the employee said. After the Macklowe sale, some bonuses were paid out at close to two hundred per cent. “That was the first moment when people realized, Oh, this is really a whole different way of running things,” the employee recalled.

The recalibration of bonuses was part of a larger corporate transformation at Sotheby’s. Staff were introduced to the accounting metric EBITDA, rather than plum consignments, as the determining measure of success. “EBITDA is everything at the new Sotheby’s,” the former executive said. In EBITDA terms, the first three years of Drahi’s ownership were extremely successful. The auction house was making around three hundred and sixty million dollars annually—a forty-per-cent increase from the latter years of the Tad Smith era.

Most employees did not experience it that way. “Things were good for, like, a hot second,” the executive said. When the pandemic eased, staff returning to the offices in London noticed a shortage of technicians to look after and mount objects properly. Some works that had previously been hung on J-hooks were now hung on wires, which made it harder to put pictures flush against the wall. “We were told it was too expensive,” a former specialist from a smaller department told me. “It just looked shitty and cheap.” Marketing budgets, client dinners, trips to Art Basel—the inciting atmosphere of consumption—all became harder to come by. For people used to selling art, the cuts represented a paradox of thrift that hurt their over-all results. “Because it’s all about relationships,” the specialist explained. “When you limit the time of people in the sale room, in front of the work, you limit that interest, that desire for it, that potential.”

Employees across Sotheby’s fine-art division—the historic core of the auction house—noticed a new distance between them and the company’s leadership. Compared with their predecessors, Stewart and his executives dramatically reduced the time that they spent with the specialists, who were used to thinking of themselves as the conscience of the business. “They created a lot of friction within the organization by not treating the experts as experts,” the former specialist said. The New York art adviser told me, “You know, these auction-house specialists have been kind of relegated to salespeople, which defies the purpose of having a relationship.”

In the summer of 2src21, Cappellazzo, the head of the company’s global fine-art division—and the totemic hire of the Smith years—left to set up a new advisory firm. Cappellazzo could be domineering. “She had her style and her way,” a current Sotheby’s chairman told me. “But she was really a great businesswoman.” Her departure gave rise to the sense that the Drahi regime either didn’t know how or no longer wanted to work with the company’s traditional, highly paid stars. “That was a radical idea,” one of the former executives said. “To sum it up: talent doesn’t matter when you have a brand as powerful as Sotheby’s. That was a profoundly disruptive concept.”

Another disruptive concept was the rapid ascent of Nathan Drahi, one of Drahi’s twin sons, who was appointed to run the company’s Asia business, at the age of twenty-six. For years, the auction house’s Hong Kong office had been a point of pride and stability for the company. It was led by Kevin Ching, an industry veteran, and Patti Wong, an independently wealthy Hong Kong dealmaker, and it routinely outperformed Christie’s in the region. “It was one of the pillars of the company’s success,” the former specialist said.

Nathan arrived in Hong Kong in the summer of 2src2src. His career at Sotheby’s was closely watched for signs of Drahi’s larger plans for the auction house. “Nathan Drahi had no business being anyone’s boss in Hong Kong,” the New York art adviser said. Ching’s contract was coming to an end, and Nathan was promoted to be the managing director in his place. (Ching joined Christie’s two years later.) Almost immediately, reports began to reach New York about Nathan’s overbearing management style. “His way of disregarding people on every level is staggering,” the former specialist said. Nathan sought to interpose himself in sensitive deals despite his lack of experience. He also maintained draconian office policies, such as demanding that all the blinds be constantly raised, sweeping desks clear at the end of the day, and challenging the travel and lunch receipts of senior staff. “Literally half of the H.R. department’s job is trying to manage Nathan’s damage,” the former executive said. Wong left Sotheby’s in 2src22.

In October, 2src23, Nathan oversaw the sale of the collection of the founders of Shanghai’s Long Museum, which came in forty per cent below its presale estimate of ninety-five million dollars—reportedly costing Sotheby’s millions of dollars in failed guarantees. The following summer, the auction house opened Sotheby’s Maison, a two-story gallery and retail space in the Landmark Chater, a high-end shopping mall. Visiting colleagues were struck by the opulence of the new downstairs galleries but noted that they were very dark and not well suited to the hanging of Western art. (Sotheby’s said that the lighting is adjustable.) In the upstairs retail space, staff recorded two hundred sales in the first six months of the Maison operation—slightly more than one per day. “That’s madness,” the executive said. “That could barely even cover the cost of the staff.” According to ArtDai, an art-market analytics company, the auction house’s market share declined by nine per cent during Nathan’s time in charge of Sotheby’s Asia.

Around 1src A.M. on July 13, 2src23, Armando Pereira, the Altice co-founder, was arrested at the front door of his villa, overlooking the village in northern Portugal where he was born. Pereira, who was seventy-one, had an estimated net worth of €1.6 billion, making him one of the richest men in the country. According to the Portuguese authorities, he was detained—along with a businessman named Hernâni Vaz Antunes—after a three-year investigation known as Operation Picoas. “Picoas” is the name of the Metro station nearest to Altice Portugal’s offices in Lisbon. The investigation centered on Altice procurement contracts, which prosecutors believed Pereira had used to enrich himself, by funnelling business toward particular suppliers.

Pereira and Antunes were also suspected of diverting money paid by Altice for telecom equipment into another set of companies based in the Madeira Free Trade Zone and in Dubai. Cars worth thirty million euros were seized as part of the investigation, including an Aston Martin and a Lamborghini that were delivered to Pereira on the morning of his arrest. Pereira was held briefly in a Lisbon jail before being released on a ten-million-euro bond. (Both Pereira and Antunes have denied any wrongdoing.)

On an earnings call for Altice International on August 7th, Drahi portrayed Pereira as a rogue operator who no longer played a key role at the company. He told analysts that, if the allegations were true, he had been “betrayed and deceived by a small group of individuals, including one of our oldest colleagues.” But people familiar with the Altice Way wondered whether it was as simple as that. “We are not in the presence of a simple shareholder,” the Portuguese prosecutor’s report said of Pereira, “but of a de-facto director, who has the ability to intervene in the decision-making process.” Drahi and Pereira owned adjacent plots of land on Nevis, and the two men’s fortunes were tightly entwined. (On the earnings call, Drahi acknowledged that Pereira owned twenty per cent of his “personal economic interest.”) At Altice USA, Benchetrit, Pereira’s son-in-law, helped oversee a budget of around two billion dollars a year.

The arrest of Pereira catalyzed a slow-motion crisis that had been enveloping Altice since the summer of 2src21, when poor performance, followed by rising interest rates, began to threaten Drahi’s ability to finance his companies. “It was all holding together just about O.K. until the pandemic hit,” Chaplin, the telecom analyst, said. Sequestered at home, Altice customers in the U.S. and Europe complained about the subpar quality and high prices of Drahi’s brands. “He’d underinvested in the network at that point for years,” Chaplin said. “The whole thing crumbled.”

Around the time of Pereira’s arrest, Altice France alone had debts of more than twenty-four billion euros. In the U.S., officials in New Jersey and Connecticut launched investigations into whether Altice had misrepresented its internet speeds. The company’s share price tumbled from thirty-seven dollars to less than three, as subscriber numbers and revenues fell and its debt burden became unsustainable. “Leverage is fantastic when you’re growing a little bit,” Chaplin said. “It all unravels when you start shrinking.”

The circumstances of Operation Picoas raised the prospect that Altice companies outside Portugal might be the victims of similar schemes. Le Monde reported that another company controlled by Antunes had been used to supply SFR stores in France. A month after Pereira’s arrest, Craig Moffett, a U.S. telecom analyst, noted “uncomfortable connections” in Altice’s American businesses. The former chairman of Altice USA, a Portuguese telecom executive named Alexandre Fonseca, resigned. Earlier this year, Fonseca was named as a suspect in the Picoas case. (No one has yet been formally charged with a crime.) Benchetrit was fired, reportedly after failing to engage with the company’s investigation.

The decline of Altice coincided with increasing scrutiny of Drahi himself. In the fall of 2src22, Reflets, a French investigative outlet, began publishing stories about Drahi based on documents that had been hacked from Altice’s servers and made available on the dark web.

Antoine Champagne, the editor of Reflets, is in his late fifties. He started reporting on hackers in the nineties. “I’m very well aware of what the internet is and how it works,” he told me. “And I know that it’s primarily cables.” He had heard of Altice because of the company’s dismal reputation as the owner of SFR. In August, 2src22, Champagne and a colleague spent days downloading about four hundred and fifty thousand documents, many of which concerned Drahi’s family office in Geneva.

The first #DrahiLeaks stories concentrated on the billionaire’s meticulously ordered life style. A fifty-eight-page “Bible” for Drahi’s chalet in Zermatt ordered staff not to leave any fingerprints in the bathrooms or to call him anything other than Monsieur. “DO NOT CALL HIM MONSIEUR DRAHI,” the manual noted. In keeping with Drahi’s “cost killer” reputation, Champagne found repeated requests for discounts, even on trivial expenditures: a new barbecue; electrical work at his house; a wine order, in which the most expensive bottle cost around a hundred and fifty dollars. “We have a saying here in France: le prix d’un paquet de cigarettes . . . but it’s not even that,” Champagne said. “It’s not even src.srcsrcsrcsrc1 cent for him,” he added. “It’s nothing.”

The Reflets team moved on to the workings of Altice and the complex lattice of holding companies that surrounded Drahi and his closest associates. But, after months of poring over documents and internal e-mails, Champagne found himself most struck by what he had not found. “In all this leak, there is not one mail, one thing, where you see something about strategic policy for the company,” he said. “What we should do so that the company will thrive? Never. It’s always: How can we pay less taxes? Or create a new company that will buy the other?”

Champagne came to think of Drahi as a man with two pockets. One contained Altice, which was really just an elaborate agglomeration of debts and corporate shells, moving around. “It’s a financial company,” Champagne said. “He’s not producing anything.” By contrast, the contents of Drahi’s personal pocket were strikingly tangible. “It’s really real things,” Champagne observed. “It’s buildings. It’s art. It’s jewelry. It’s planes.” Stuff you can sell. “Even if Altice goes bankrupt, which could happen,” Champagne said, “he will still be a multibillionaire, because he owns a lot of things.”

Drahi’s personal pocket was now bulging with art. #DrahiLeaks revealed just how aggressively the billionaire had expanded his collection in the preceding three years. In December, 2src19, two months after Drahi bought the auction house, a confidential appraisal by Sotheby’s for insurance purposes valued forty-eight works at a total of a hundred and eighty million dollars. Within three years, Drahi’s collection had grown fourfold and was valued at an estimated seven hundred and fifty million dollars; much of it was owned by corporate vehicles, controlled by his children, in the Caribbean.

It was Drahi, standing at the back of the socially distanced salesroom in New York, who had bought the Bacon triptych, in order to make a big success of the first online evening sale of the pandemic. That fall, with the art market still badly disrupted, Sotheby’s also conducted a dramatic “sealed bids” auction for a nine-foot Giacometti sculpture, “Grande femme I,” cast in 196src, from the collection of the American financier Ron Perelman, with a minimum bid of ninety million dollars. It was Drahi, again, who ended up with the sculpture. Recent filings by Sotheby’s parent company, in Luxembourg, showed that, in 2src21 and 2src22, purchases made by “stockholders and members of management” totalled nearly two hundred million dollars.

Sotheby’s was an Altice company now. One of the documents that Champagne unearthed was a contract between the auction house and Drahi’s personal holding company, under which Sotheby’s—like other Altice subsidiaries—would have to pay for the privilege of being owned. Drahi’s services included introductions to banks, guaranteeing art works, and “advices on strategic direction.” During the first two years of the contract, the auction house paid Drahi $26.4 million.

Inside Sotheby’s, Altice’s worsening fortunes did not directly affect day-to-day business. The more pressing concern was the downturn in the art market. In 2src22, the auction house reported another record-breaking year, with eight billion dollars in revenue. But the headline figure obscured a modest decline in art sales. After the generous bonuses that followed the Macklowe sale, average bonuses fell sharply, to just sixty per cent—their lowest level since the financial crisis.

As the art market cooled, the weight of the auction house’s debts began to make itself felt. In the first three years of Drahi’s ownership, more than a billion dollars in dividends were extracted from Sotheby’s while the company’s debts quadrupled, to more than two billion. “We were always working to basically create enough money for Patrick’s debt service. That was what this was all about,” the former executive said. “If you take a pie and you take three-quarters of that pie and give it to Patrick, it doesn’t matter how much you make.”

An employee who joined Sotheby’s around this time was taken aback by the state of the offices at the York Avenue headquarters. The carpets were tatty; the meeting rooms were ill-equipped. “Venders would not work with us, because we had sixty-day payment terms, not thirty,” the employee recalled. There was a general atmosphere of dysfunction and anxiety. “Not only was it incredibly short-staffed, because they kept firing people,” the employee said. “There was no efficiency.” The employee described Stewart as capable of good ideas—but he was also disengaged. During meetings, he liked to spend time on Instagram and play Candy Crush on his phone.

In June, 2src23, Sotheby’s announced that it had bought the Breuer building, the former home of the Whitney Museum, on Madison Avenue, to serve as its new headquarters. The deal, which was worth a hundred million dollars and financed with a loan from Barclays, provoked mixed feelings in the company’s employees, many of whom were simultaneously excited by the artistic importance of the Breuer and worried about the practicalities of conducting auctions there—everything from running trucks up Madison Avenue to the lack of office space. “I think it will be alluring for sellers,” the former longtime employee said. “Logistically, it will be a nightmare.”

For many junior and mid-level employees, it was hard to reconcile the purchase of a new, jewellike headquarters with the constraints of their own working conditions. “We were not getting our bonuses. Everything was being cut,” the former specialist from a smaller department told me. “It’s a terrible atmosphere, and then they’re doing all these things?” The Breuer deal, along with the development of a new headquarters in Paris and the Maison in Hong Kong, only deepened the sense of mystery around Drahi’s finances—and how he chose to deploy them. “Clearly, there’s money,” the former specialist went on. “But where is it?”

In December, 2src23, Stewart and Berrebi informed staff that Sotheby’s would be changing its premiums the next year. The new fee structure—which represented the biggest such reform since the seventies—would begin in just a few weeks. The plan, which originated in conversations between Stewart and Drahi, was intended to arrest the long-term erosion of Sotheby’s margins and to bring more transparency to the auction business. Stewart’s solution was to lower buyer’s premiums and to standardize seller’s fees, at ten per cent on the first five hundred thousand dollars for most lots, with new fees for guaranteed works. In the interest of fairness, Stewart announced that the new fees would be nonnegotiable. “You deserve clarity and simplicity when buying and selling with us,” he said.

For many in the art market, the reforms misread at least two profound truths of the auction business. The first is that you need things to sell. “They worried about Z before they got to A,” the New York art adviser said. “And ABC all the way through, like, QRST is get the consignment.” Second: that buying and selling art is a negotiation. The market chooses opacity for a reason. Its terms are necessarily bespoke. The whole exercise, after all, is about going against your better judgment.

Sotheby’s specialists were appalled by the new fees. “It was tone-deaf in terms of the timing and the numbers,” a senior employee said. The premiums came into force four months later. “It was, like, we’re so stupid,” the former specialist said. “We’re not worth listening to. We don’t have a pulse on our clients and what they would and wouldn’t tolerate.”

Stewart’s premium policy lasted seven months. For the dozens of former and current Sotheby’s employees I spoke to for this article, those were the worst days of Drahi’s tenure. “It has huge parallels to the way Trump rules in the United States. It’s that kind of chaos that is totally not necessary,” the former executive said. “It’s, like, why did you do that?” Christie’s did not change its pricing, which meant that, overnight, it became dramatically more attractive to consignors.

“Having unmeetable targets just sort of gets everyone a bit down,” the former London-based specialist said of the general pressure of Drahi’s management culture. “But what gets people more down is, sale after sale, you are just losing to Christie’s.” In the first six months of 2src24, profits from Sotheby’s auction businesses fell by eighty-eight per cent. In July, Moody’s downgraded the company’s debt, citing “governance concerns” and the continued extraction of dividends. One of the long-term-incentive plans for senior staff, which had been due to vest, was delayed. Instead of wealth transformation, executives were given I.O.U.s. (They received their payouts five months later.) There was another round of layoffs. A rumor spread that the cuts were being made, in part, to offset the losses caused by Nathan Drahi in Hong Kong. “It was Shakespearean,” the employee who joined during this period recalled.

At a meeting at the York Avenue office in June, 2src24, the Sotheby’s chairmen—the company’s top specialists—had a chance to present their concerns to Drahi in person. Grégoire Billaut, a French chairman of contemporary art, confronted him about the new fee structure. Billaut had been supportive of Drahi’s ownership until that point. “You need to do something,” Billaut said, according to several sources. “I’m losing business. I never lose. And now I’m losing and I can’t take it anymore.”

Drahi was incensed. “If that is how you feel, then walk out the door,” he replied. “This is not a democracy. It’s my company, and I run this company. At the end of the day, all of you, every single one of you, is replaceable.” Looking at Stewart, Drahi added, “Even you.”

There was a sense of order breaking down. One London-based dealer described an atmosphere of “instability in the rooms and the feeling that expertise is gone.” Dozens of employees in Sotheby’s British office lost their jobs last year. Gossip and paranoia spread to the market. “It’s, like, how are you going to survive without these people that have either been fired or left the company voluntarily?” the senior employee said. “What’s happened with my payment? How long are you going to be there? I’m not going to sit here and pretend that those are not conversations that are going on amongst our clients all the time.”

The combination of poor compensation and absent leadership led some staff to start selling art, or acting as intermediaries, off the company’s books. Under Sotheby’s employment rules, staff are allowed to buy and sell works for their personal collections, but must avoid other forms of dealing that conflict with the interests of the auction house. It is a gray area—a zone of temptation—in which the art market abounds and which specialists were long taught to avoid. “We used to have training all the time: every time you have a question mark over what you’re doing, ask yourself if you would want it on the front page of the newspaper,” a former senior specialist told me. “Maybe it still exists somewhere, but I don’t know.”

According to multiple sources, such side-dealing, as it is known, is concentrated in Sotheby’s private-sales department, which sells objects outside auctions and is run by David Schrader, a former investment banker. (Sotheby’s private sales totalled $1.4 billion last year.) The practice involves Sotheby’s employees setting up private L.L.C.s and carrying out deals that would otherwise have taken place within the auction house. “No one’s taking money directly from Sotheby’s,” one source explained. “They basically just went around Sotheby’s and took an opportunity that was Sotheby’s to sell.”

The New Yorker has spoken to five people with knowledge of these deals, including two who were parties to such transactions. All blamed the deteriorating culture at the auction house. “This is the state of the fucked-up situation that this company’s in,” the first source said. “If Drahi doesn’t respect his experts, the experts are forced to behave in a way that is the antithesis to how a specialist is supposed to behave,” a second source explained. “They’re all trying to make money in their own little way.”

Former executives told me that Stewart was informed on several occasions of reports of side-dealing at Sotheby’s. But he declined to act, citing a lack of proof. “Nobody was home. Nobody was listening,” a third source told me. “They don’t actually want to exit these people. They don’t understand how damaging it is for the culture or particularly care.” In a statement, Sotheby’s said that no evidence of activities outside the company’s policies had been brought to senior management. A spokesperson referred to the company’s conflicts-of-interest guidelines and added, “We are confident that our team abides by these policies.”

Drahi probably can’t break Sotheby’s. The duopoly of the great auction houses is a codependency on which the rest of the sixty-five-billion-dollar art market relies. “As long as there’s art worth a million dollars or more, you need Sotheby’s and Christie’s to sell it,” the former longtime employee said. “You don’t need more than two, but you need two.” The former senior specialist said that one of the curiosities of working at Sotheby’s was how much time the staff spent thinking about ways to differentiate the auction house from Christie’s, only to discover that most clients couldn’t really tell the two apart. If someone wants to sell a Roy Lichtenstein painting or a van Gogh drawing at auction, they are—almost without fail—going to see which one offers a better deal. Patrick Drahi’s debt ratio isn’t going to change that.

Sotheby’s declined to let its staff be interviewed on the record for this article. But earlier this summer I met with someone authorized to speak for the company, who said that Sotheby’s was still in the early stages of the Drahi revolution. “How do you grow beyond the auction room?” the person asked. The representative emphasized the importance of the recent investment by ADQ, the Abu Dhabi sovereign wealth fund, and the opportunities for Sotheby’s in the Middle East. In February, the auction house staged its first sale in Saudi Arabia. An array of expensive miscellany—a James Turrell work of pink L.E.D. panels, a Magritte, a Banksy, a few Warhols, a couple of Damien Hirsts—went under the hammer in Diriyah, the country’s ancient capital. Payments in cryptocurrency were accepted.

The representative reminded me of Drahi’s long record as a disrupter of established businesses. “When you’re trying to convert an old-fashioned car into a modern supercar, that’s hard,” the person said, of the attempt to remake Sotheby’s. We talked about whether Drahi had changed in recent years. In the past decade, his net worth has shrunk by two-thirds. In June, Altice France filed for a form of bankruptcy protection in the U.S. Pereira awaits the results of the investigation in Portugal. The representative described Sotheby’s as Drahi’s “forever thing.”

Conversations about Drahi and Sotheby’s always touch on his fascination with the brand. Unlike a telecom company, whose worth can be measured in customers and connections, what Sotheby’s symbolizes is more valuable than the money it makes. It is the idea of the rarefied auction that matters. For the first hundred years of its history, Sotheby’s was celebrated for its sale of libraries. In July, 1823, the auction house sold off the books that Napoleon took with him into exile on St. Helena, along with his tortoiseshell walking stick. The pivot to art didn’t take place until the twentieth century. In the years since the pandemic, art sales have retreated even as luxury-goods revenues have doubled, to more than two billion dollars. A current Sotheby’s executive observed to me that the watch industry alone is now comfortably larger than the global art market. It is possible that Drahi’s legacy at Sotheby’s will be to accelerate a change—in taste and consumption and the expression of desire—that was happening anyway. The evening sale will be superseded at some stage. Just as cable was usurped by fibre.

In late May, I flew to New York for the spring sales. Since Sotheby’s abandoned its new fee structure, the auction house has been aggressively trying to win back business. I spoke to an art adviser who usually consigns with Christie’s and whose clients had recently been choosing to go with Sotheby’s instead. “It’s really who’s going to work the hardest for it,” the adviser said. Sotheby’s had landed the most valuable consignment of the week, Giacometti’s “Grande tête mince”—a painted bronze sculpture of a head, cast in 1955—with an asking price of seventy million dollars.

On the afternoon of the sale, I walked through the galleries at York Avenue to look at the Giacometti, an open-mouthed, quietly devastating bust of the artist’s younger brother, Diego. The sculpture was being offered without a guarantee, in accordance with the wishes of the consignor, the foundation of Stefan Soloviev, a real-estate developer and a collector.

Ahead of the sale, dealers had speculated that the auction house’s estimate of the Giacometti was too high. The specialists were under too much pressure. They were reaching too much. There were only ever a handful of collectors bidding more than fifty million dollars, even when the going was good. The previous night, Christie’s had pulled a thirty-million-dollar Warhol painting, “Big Electric Chair,” from its sale for lack of interest.

The Giacometti was lot No. 17. I was sitting at the back of the room. Barker opened the bidding at fifty-nine million dollars. He knew that interest was thin. But it only takes one bid. Barker rattled off a few air bids—from no one, but to give the impression that a competition was under way. He settled at sixty-four million dollars, somewhere near the reserve. Barker is a great auctioneer. He is particularly admired for his stamina. He offered the Giacometti for sale at sixty-four million dollars a second time. Somewhere around the fourteenth time, a stillness settled onto the salesroom. Even the specialists seemed to stand a little straighter by their phones. Barker tried for a twenty-eighth time before switching, unaccountably, to sixty-four million two hundred and fifty thousand dollars—as if that might finally shift a collector’s appetite and avert one of the most expensive auction failures of all time. But it didn’t. There was not a single bid. The buyers were watching; the buyers were wary. And nobody wanted what Sotheby’s was selling. ♦