Barrett-Jackson rumblings: Trouble in Westworld?
It seems like the recent rumblings out of Westworld are failing to die down. A high profile ejection of a respected collector car expert, rumors of shill bidding on company-owned muscle cars, and cars not getting their fair amount of stage time have all generated headlines from this year's biggest auction event, the Barrett-Jackson auction at Scottsdale, and those don't even address the biggest gripe most people seem to have – the seemingly insane high bids. For years people have commented on the super high prices muscle cars have been bringing at the Arizona auctions every January. Some have speculated that there might be something shady behind these gavel values, while others have simply been amazed.
We've vacillated over individual vehicles that don't seem to be "worth" six (or seven!) figures, but in the end understand that "worth" is determined by the buyer. At this year's auction we had a lot of fun getting caught up in the show and seeing some of our favorite vehicles throughout history, up close and in the flesh. It was a very exciting week of muscle cars, race cars, classics and customs, with a bit of drama thrown in for good measure. You might recall the story about Keith Martin, the editor of Sports Car Market, who was allegedly ejected from the Barrett-Jackson media center and the premises for his reported sleight of the proceedings and of company President, Craig Jackson. Not one to pass judgment or take sides, we decided to stay out of it. But this story seems to have legs. Follow the jump to find out why.
[Source: The Four Wheel Drift]
We just received a tip from AB reader, Peter, who pointed us to a recent blog by Sam Barer over at The Four Wheel Drift. Sam put together an opinion piece on his own take of the ruckus and went a little deeper, claiming he had spoken to several auction insiders who apparently supported the notion that something was indeed fishy in the big top that is B-J. He even had spoken to a collector car judge whose own vehicle had allegedly been short-timed during the event, not getting its promised three minutes of stage time. As this is an exclusively No Reserve auction, sellers are understandably interested in getting a fair amount of time to get the highest possible bid for their vehicles. Barer's blog went on to speculate about other aspects of the B-J auction that were fairly inflammatory. We speak of this blog in the past tense because it was taken down.
A return visitor to the original link would find a retraction in place of the original article. As Barer explains in this new replacement blog, after some soul searching (and being contacted by B-J President Steve Davis) he decided to take it down. Barer claims he decided to post an explanation because, "after widespread rumors, many emails and telephone calls, I wish to set the record straight." Barer says he went too far and didn't balance the piece by getting B-J's side of the story. Although he sticks to his guns on the material he previously ran, he knows it's only fair to allow Davis to respond to the points made. Barer says he will give B-J and others more time to address the claims and if and when the responses come in, he may update the story. One thing we can count on is that this won't be the last we'll hear of the Arizona auctions, or Barrett-Jackson in particular.
Reader Comments (Page 2 of 2)
Phatboyc 2:13PM (2/07/2007)
Here is a cut and paste of the article.
http://forums.thecarlounge.net/zerothread?id=3054304
"January 27th, 2007 by fourwheeldrift
As a collector car journalist, I have been watching the Barrett-Jackson auction for years. For the last five or so years, it has been very apparent that the Scottsdale auction is at best a bastion of greed and manipulation…and at worse, all-out fraud.
I’ve discussed B-J with collectors, dealers and enthusiasts, many of whom would be considered “insiders,” meaning they’ve bought and sold cars at B-J and other auctions, or are well-known in the collector car hobby. For some reason, it is this year that people are all finally grumbling and passing rumors in unison.
The bottom line is that Craig Jackson and the B-J company have really screwed themselves this year. Their contracts specifically promise every car three minutes on the stand. Due to ego and greed, they expanded the Scottsdale ’07 auction to the point they could not provide this, plus they had the audacity to do it on live television.
A well-known former head judge in the Ford Thunderbird circles was one of the sellers who had his car short-timed. He has already filed a law suit against B-J, and this is already headed towards class-action status.
According to this judge and other sources, it appears Barrett-Jackson was operating a bit on the same level as an evangelical healing show. They had assistants milling around asking what specific sellers thought their cars would bring. Armed with this information at the control desk, if a lot passed the value at which a seller indicated he’d be happy, the car would be rushed off and the gavel would fall – even if bidding was still very much alive.
Because the event was televised on live television via the Speed TV network, the plaintiff(s) now have video/audio proof that buyers were signaling increased bids before the three-minute marks, but were denied by a too-fast last call and hammer.
While this all might cause Barrett-Jackson to have to pay money to sellers in the form of a judgment or settlement, it is something else that might land Craig Jackson in jail.
It is no secret that Barrett-Jackson owns many cars that are run through the auction – it was something I suspected many, many years ago. This was proven when they started maintaining a showroom of cars in Arizona. This is not illegal, but stay with me.
I’ve always suspected that the cars owned by Craig Jackson and the B-J company were often driven up by shill bidders working for the company. Essentially, the strategy works in the sense that ever since the auction focus moved from classics like Packards and Duesenbergs to muscle cars, B-J has been able to shill, say a Hemi Cuda or mid-year Corvette 427 they own, which causes the value of the 10 other identical cars to increase. They wind up “buying” their own car back, but the others go on to regular buyers, who now are paying higher because of the perception the market has moved up.
This suspicion has been validated by auction attendees this year that witnessed cars sold at auction headed in trailers back to B-J’s warehouse. The lawsuit allegedly points out that these cars also spent significantly more time on the block than others.
If this isn’t all interesting enough, during this year’s auction, fellow collector car journalist, Keith Martin of Sports Car Market, was booted from the Westworld premises and his media credentials revoked for voicing loud, specific concern regarding the event while sitting in the media room. Barrett-Jackson accused Keith Martin of “holding court” and attempting to send VIPs and journalists to the competing RM and Russo and Steele auction events. Among the alleged opinions included that the cars at B-J were of inferior quality (and had quality misrepresented,) as well as that the bidders were significantly over-bidding cars, which shouldn’t come as a surprise to anyone who has witnessed people paying six figures for cars they could have bought for under $50,000 any other day of the year!!!
This is somewhat of an interesting twist. Keith Martin’s publication has marketed the B-J events and has helped fuel its popularity. Keith is definitely one of the great “insiders” of the hobby, and has been a friend to Craig Jackson. In past years, Keith nor his publication have been critical of the goings-on and rumors, while other collector car journalists have been outwardly screaming that something stunk.
It makes sense, since Sports Car Market really only tracks the value of vehicles and other items sold at auction, rather than via private sales (which really has skewed SCM’s values for years!) So without kissing-ass to B-J, Keith would have missed insider info on the largest events covered by his mag. So we can only guess that Keith and Craig had a falling out of some type.
I applaud Keith for turning the corner on his view of B-J, but I’m with others I’ve talked to about this: I hate to say this about a colleague, but I felt his behavior was a bit unprofessional. As journalists, it is our responsibility to write what we think, but going to the show for years, then promoting RM and Russo+Steele while at Westworld is somewhat unprofessional. I agree that Keith, a true hobbyist who started out by writing an Alfa Romeo newsletter, was for a long time too much a part of the “circus” about which he finally rejected, and that SCM has to a significant degree helped to fuel misinformation and a house of cards regarding specific auction prices and bidding behavior. Keith, by all accounts, is a really good guy — an enthusiast, who maybe just needed to take a step back and a big breath and reacquaint himself with those outside of the very insulated collector car “in crowd” — and spend time with some car people who are not trying to exploit the collectors. There are plenty of guys who have dug themselves too deep into this little crowd, and are no longer fun to deal with, because they’ve put personal greed well ahead of the cars and the collectors. Keith will rebound — he has a great internal staff of really fantastic people, who hopefully will help him return to his roots.
That being said… While I’ve never met him, the buzz among those in the hobby — both collectors and journalists, is that Craig Jackson is quite arrogant, so don’t expect many to come to his rescue. He inherited his father’s company, and has fueled B-J’s growth with a combination of intelligence, drive, ego, and greed. While there is nothing wrong with that combination, when it results in unethical and possibly illegal activities, that’s inexcusable.
Like many surrounding the hobby, I will be watching the events unfold. Will the Westworld tents come down like a house of cards, or will everything just go away with an exchange of a little money? It’s hard to predict. Craig Jackson has become a very powerful man, and his company has pumped billions of dollars into the Arizona economy over the years.
This all being said, there’s no doubt that Barrett-Jackson “jumped the shark” this year. Unlike when Fonzi did it, Craig Jackson drove his allegedly shill-bid Hemicudas over the tank and down a ramp that could lead to six years in a minimum security prison-issued orange jumpsuit. If that’s the case, maybe he can get Sports Car Market in the slammer to keep-up on Russo and Steele, RM and Kruse auction results.
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Richard Warren 4:32PM (2/07/2007)
Interesting article. Something else this year, I was there for Fri night Sat and Sun, I also thought the hammer fell too early a few times and there were a number of corrections being made by the various auctioneers, unlike past years. Something was very different this year.
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Robbie Sherwood 6:19PM (2/16/2007)
Barrett-Jackson responds
As always Barrett-Jackson wishes to thank our many customers, guests and fellow car enthusiasts. Working together we create something very special in Scottsdale every January and Palm Beach a couple of months later.
However, some recent, false postings on blogs and discussion forums now force us to shift from thanking so many to asking an irresponsible few: “what were you thinking?”
Also, please consider this posting an official, legal request of this blog from Barrett-Jackson to remove all content sparked by the post below since the original source of the information has since retracted the story and further publication of it, such as on this forum, will be subject to the aggressive legal action we should and must take to eliminate the absurd and false information contained on this site.
Though our attorney disagrees with me, I am of the mindset that Mr.
Barer’s original comments at www.apexstrategy.com (fourwheeldrift blog) – comments that led to others such as this blog to post the same inaccurate, irresponsible and legal defamatory information about Barrett-Jackson’s business practices -- may have been naïve or
innocent. That’s because he may have simply been careless to repeat
rumors he has heard from so-called “insiders” who claim to know various salacious things about our recent event. It is hard to imagine that a “freelance journalist” (as Mr. Barer’s website defines him) would recklessly publish so many unfounded and untrue statements in one package. Regardless of Mr. Barer’s intent, Barrett-Jackson takes all public attacks on its business practices quite seriously, particularly when they are published to an audience as far-reaching as users of the Internet by someone holding himself out as a professional journalist.
As with Mr. Barer’s original posting – one he has now replaced (see
below) --repeating his original comments on this blog does not excuse the false and defamatory information now posted as a result of Mr. Barrer’s original, bogus entry.
As President of Barrett-Jackson, I can assure readers of this forum that the claims made in Mr. Barer’s posting are patently false. There is no lawsuit by a well-known judge. There is no class action lawsuit. There is no situation involving Barrett-Jackson owning many cars that are run through the auction and providing “shill bidders” to inflate prices of vehicles. There are no secret trucks transporting vehicles back to Barrett-Jackson’s “warehouse” after unsuccessful sales. It is impossible to respond to each of the claims made in this posting in any reasonable, professional manner, and Mr. Barer should not be so reckless in repeating as “proven” such fabricated stories. This forum should not be so reckless as to repeat them.
In fact, the laundry list of wrongdoing cited as fact by Mr. Barer would be almost comical if the statements were not so directly harmful to the business that hundreds of people have worked so hard to build in these last
36 years.
The varied and far-fetched claims made by Mr. Barer in his story are not worthy of any further response other than to say that the only lawsuit surrounding these matters is likely to be one for defamation filed by Barrett-Jackson against any and all who repeat fantasy rather than fact.
Finally, thank you to all of our bidders, buyers and enthusiasts who wrote in and directly refuted this nonsense. It had an impact on Mr.
Barer and if we have one thing to thank him for is that he was willing to listen after receiving an avalanche of testimonials and facts directly refuting his rumor and innuendo.
Good people when confronted with good, new information re-evaluate and correct course. That is what Mr. Barer has done and what this forum should do as well.
Steve Davis
President
Barrett-Jackson Auction Co.
*******THE BARER RETRACTION POSTED ON WWW.APEXSTRATEGY.COM THE REASON IT IS NO LONGER HERE February 1, 2007 After some real soul searching I decided to take down the posting regarding Barrett-Jackson. I was not going to offer an explanation to readers, but after widespread rumors, many emails and telephone calls, I wish to set the record straight.
Steve Davis, President of Barrett-Jackson took the time and effort to read the article, and then posted a comment that argued that the content was “reckless.” I firmly believe that in writing it I far exceeded the standard of conduct applicable to opinion pieces published on the internet. Each of the allegations made in the piece was already published in print, on message boards, around the blogosphere, through email lists, or had been circulating via car club events. I have additional sources who provided other information regarding most of the points.
That being said, as I reread the piece and gave it a lot of thought, I came to the belief in retrospect that while a valid piece of journalistic workmanship, it could be arguably seen from Barrett-Jackson’s standpoint as unfair. I had aggregated claims and allegations from sellers and participants over the years, yet had not leavened the piece with B-J’s side of the story. In taking it down, it offers B-J time to respond, educate, investigate…I even provided B-J the name and contact information of the now-famous judge (with his
consent,) who sold his high-profile car on Saturday of the event.
Hopefully, they can communicate and come to an understanding, and both report back.
Since I have no personal animosity against B-J (I believe it to be one of the most entertaining auto events of the season,) and I realize there are two sides to this and every story, I felt the better course of action was to pull it down and integrate anything they chose to communicate within a new article.
Furthermore, the article brought out many additional people (including some names car enthusiasts would recognize) who have taken time to tell me their personal stories of interaction with B-J and other auction companies. So like an artist who looks at his painting after the fact, this story, if and when it is updated, can look so much better, in my opinion, with all of the information provided by these sellers, attendees, as well as auction company representatives. (I also thank Drew Alcazar from Russo and Steele for taking time out of his busy schedule to communicate with me. I look forward to hearing more from him, as well as representatives from other auction companies, who have contacted offering to share information regarding their experiences.)
My final reason for pulling the article was that it was getting too personal on many levels. From threats of lawsuits against me to attacks against those posting on the blog with differing views, it simply was not what The Four Wheel Drift was intended to be about.
I personally thank all those who have sent their stories and support, as well as those many great, trustworthy sources who were the basis of the original story.
Sincerely,
Sam Barer
The Four Wheel Drift
*********BARRETT-JACKSON’S ORIGINAL RESPONSE TO THE FALSEHOODS FOR IMMEDIATE RELEASE FROM BARRETT-JACKSON COLLECTOR CAR AUCTION SCOTTSDALE, Ariz. – February, 2007
THE Barrett-Jackson Auction Company is aware of postings on various “blogs” and online discussion boards that make false and libelous statement regarding the Company’s business practices. While the author that started this discussion decided to remove the posting after receiving a written statement and legal warning from Barrett-Jackson, the original blog content has been copied to numerous other Web sites and other locations on the Internet.
The reply from Barrett-Jackson has not been copied to these additional
locations. Continued posting of false and defamatory information
about Barrett-Jackson, no matter the original source, is not acceptable. We will pursue any and all legal action against individuals, forums and blogs that convey defamatory language about the company and its auctions.
The statements published in the original posting, and repeated in numerous other forums since that time, are untrue and are potentially harmful to Barrett-Jackson’s business interests. Barrett-Jackson issues the following statement for the purposes of clarifying the situation and providing its position regarding the accusations made against the Company.
• There is no lawsuit against Barrett-Jackson alleging improper or
unlawful auction practices.
• Barrett-Jackson has historically offered a combination of reserve and no-reserve vehicles across the auction block. In a sale with a reserve, a vehicle is not sold if the reserve price is not met. In a no-reserve sale, every vehicle that crosses the block is sold to the highest bidder, regardless of the amount of the last bid that is made before the fall of the auctioneer’s hammer. In a no-reserve sale, the owner of a car may not bid (by himself or through an agent) on his own car.
• In recent years, Barrett-Jackson has run auctions that are completely no-reserve. This is a business decision made by Barrett-Jackson; there is no legal or other requirement that all vehicles be sold at no-reserve. In the future, Barrett-Jackson may opt to offer vehicles with a reserve.
• Owner buybacks and so-called “chandelier” or “shill” bidding are
forbidden on all no-reserve vehicles sold at Barrett-Jackson. The practice is specifically prohibited in the consignment contract signed by each seller.
• Barrett-Jackson’s auction staff monitors all bid activity to the best of its ability while a vehicle is on the block. If Barrett-Jackson sees that an owner (or someone known to be the owner’s agent) is bidding on his own vehicle, the Company stops the bidding and reverts to the last bid.
• With the size of Barrett-Jackson’s auction venue and the presence of
thousands of registered bidders, it is physically impossible to guarantee that no owner (or an unidentified owner’s agent) attempts to bid on his own vehicle. For this reason, it is Barrett-Jackson’s policy to penalize any owner who successfully bids on his own vehicle by charging that person both the seller’s commission and the buyer’s premium on that vehicle. This penalty serves as a meaningful deterrent for those who may otherwise choose to ignore the rules. Individuals who fail to abide by auction regulations may also be barred from participating in future Barrett-Jackson events.
• Barrett-Jackson continually updates its practices and procedures to
implement additional measures to prohibit owner buy-backs and to prevent the practice of “chandelier” bidding in any no-reserve situation. These procedures include a continually evolving use of technology and visual aids to assist the auction staff in identifying owners who may attempt to bid on their own vehicles.
• Our business is based on honesty and integrity. We cannot conduct the ambitious events we do every year without it.
• We are always available to respond to questions. All one needs to
do is ask rather than respond with completely ridiculous, inaccurate and ultimately illegal commentary.
Sincerely,
Robbie Sherwood, Spokesperson-Barrett-Jackson Collector Car Auction
Former Reporter, Arizona Republic
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greg kaczmarczyk 12:47PM (2/27/2007)
Having watched BJ on tv the past few years, and being a car enthusiast my whole life. I decided to attend scottsdale this year. I was there for the full auction. Starting Tuesday with the "deal" cars all the way up to the "insane" cars on Saturday. I will say one thing, Craig Jackson makes PT Barnum look like an amatuer. He puts on a great show. It was quite the event,forget the cars and prices, just go for the party. I split the cost of a bidder pass with my brother-in-law and that was the best deal of the auction. I have been to other auctions and NO one puts on one better than BJ. I heard all the same comments everyone else did, prices too high, too much commission, not enough time, shill bidders etc. Bottom line is you know what your are getting into before you go, and nobody is twisting your arm to bid. It's America at it's best. If you have to spend alot of money to show someone how big your pee-pee is so what it's your money. While I will probably never buy a car at BJ I may sell one there someday. The only legitimate complaint anyone should have is the time on the block and that is easily enough to prove.
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Joel 1:15PM (3/02/2007)
As one who sold a car at this auction, I can speak from experience. The scenario that played out descibed in the original story about short timed Judges car was a carbon copy of my experience. When I read the paragraph, I saw my experience in the article.
There was a rep IN MY FACE, the entire time I was on the stage, and his ONLY concern was getting a dollar amount out of me, which I wouldn't give him. I personaly witnessed a gentleman on stage standing immediatley in front of the auctioneer raise the bid 500 bucks, only to watch the hammer fall with his bid not aknowledged. This happend just as the Clown in my face asked me if I was happy. To which I replied yes. My reply was yes, because I WAS happy, happy to be there, not that I was happy with the current status of the auction price. Thanks to these others experiences revealed now, it is very clear to me, I answerd a very different question, for a very obvious reason.
I can't wait to see how the story whole plays out for these over paid scammers.
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Mark 1:21PM (4/02/2007)
UPDATE: Just came back from West Palm BJ auction and to reinforce those comments regarding shaddy dealings at BJ and how money hungry they are, let me post this short note;
1. Point of interest---The contract has been changed as I could not find anbywhere that they guaranteed you 3 minutes on the block.
2. The contract specifically states under Terms & Conditions, #3 - Compensation - para f: No reserve. Owner Buy-backs (where the owner or agent of the owner is the succcessful bidder) are not permitted. In the event an Owner, at his own risk,fails to comply with this provision, blah blah blah
If it is prohibited, why go into 9-10 lines explaining the consequences of violotating this provision. It is a joke, that's why. BJ could care less if you buy your own car back - they get their fee either way. I state this because after I bought my car back, I cashed out and paid my fees and not one single person said anything about me buying my car back - not one person...they just took my money and moved on to the next buyer. So don't think for a moment buy backs are prohibited..think again...they are not even discouraged.
3. $500 to consign your car and then they want another $250 to park it under a tent...give me a break.
4. The most disturbing was on Wed night where they throw a reception, we went to park and when we showed them our ahndicap parking sign, they directed us to a spot and tried to charge us $5.00 for handicap parking...GIVE ME A BREAK - enough is enoough.
Never again
Mark
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jackh1960 11:32AM (5/11/2007)
Check out Keith Martin's Sports Car Market Magazine, June 07 issue, pages 30-31, for more on this story.
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dan 5:56PM (1/21/2008)
i just returned from the 2008 B-J and R&S auctions. both vastly different. both with their own pros and cons. i am very interested in hearing from other attendees this year.
my story (and i would welcome steve davis to call me to discuss, i have only spoken to B-J's attorney virginia llewelyn) last year regarding the sale of my car. the long and the short of my story is that i consigned the car only when the consignment rep told me i could buy my car back paying the 8% seller's and 10% buyers commissions. this is a fact.
a well-known, auto pundit attorney i consulted had the following to say about my situation...
"...Your consignment agreement does not specifically prevent you from bidding on your own car. It clearly obligates you to pay the 18% if you do, but it is unclear as to whether you can or not. Also, they give you a bidder number as part of your consignment. Under Arizona law, which is the same pretty much everywhere, you are allowed to bid on your own car only if BJ advises the bidders that your doing so is allowed. In 2006, their bidder contract made that disclosure, and seller bidding was legitimate. In 2007, they dropped that disclosure, although they could have legally made the disclosure in other ways (eg, signs, announcements).
Your consignment agreement does not contain a routine contractual provision that the written contract serves as the entire deal, so it could be possible for you to bring other agreements into the deal, such as the oral assurances. The biggest legal problem may be proving damages. BJ will argue strongly that the price brought by your car was actually market value, so you did not suffer any real damage by not being able to stop the sale. ...the case would force a very exacting analysis of their entire “all no reserve” approach. There are a vast number of opportunities to prove that seller buy-backs were condoned.
if there are others out there with similar situations from this year, i would like to hear from you. i don't believe i will ever have the wherewithal to ever pursue this; but somebody @ B-J should have talked to me on site rather than refusing to see me. the only conversation i had was with their outside legal counsel.
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