New wrinkle at B-J Options

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Barrett Jackson, The Truth... Tom P (Login tomposthuma)
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I recieved this...

" Barrett Jackson fraud claimed


>This was forwarded to me by a buddy in the business. Not sure of the
>validity, but it definitely makes you wonder....
>
> 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 gav el 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 w orking 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
>boot ed 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 -- h e 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 in to 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. "



So do you think he'll be stamping collector car license plates in the future?

[Mueller]

interesting reading...I've never trusted those auctions, seem too easy to plant a shill bidder....

[shaggy]

i was there and it did seem like some cars were hauled off while the bidding was still hot.

but does 3 minutes on the block mean on center stage or on the ramps on both sides?

i also saw a number of bidders trying to get bids in at the last minute but fail(that happened several times around me in the bidders pit).

-jim

[rick 918-S]

Why am I not surprised. A local friend of mine and I have been discussing BJ and the prices being achived year after year. The auction never cools..... In the real world the market always cools.
And how many car guys can keep coming year after year and keep buying these cars for more money every year? Sooner or later they have to run out of buyers. That leaves the bargain hunters and deflated prices. This spells the death of the auction.

Would you continue to watch the auctions in facination and dream about maybe bringing your car there someday if people were selling Cobra's and Hemi's for $ 10,000.00 to $ 20,000.00 less than they were getting last year?

And the less the auction sells each vehicle for the less they take on comission... Surprised this is coming out? no...

[ppickerell]

Thar be dragons, and ye will be swimmin with the sharks!

[914werke]

(will)everything just go away with an exchange of a little money?

Perhaps a LOT of money but, Im guessing that is exactly what will happen (IMG:style_emoticons/default/icon8.gif)

[biosurfer1]

i dont think any of this will hold up in court. no one forces any seller to go there. they dont force anyone to bid. liquored up bidders are all over the place, so saying things like "paying six figures for a car you could get for $50,000 all year long" isnt BJ's fault. saying the car has to be on the block for 3 minutes could be ripped apart by any laywer without a proper defination.

i'm not defending BJ and I would never buy/sell a car there because its too crazy, and I wouldnt put it past them to shill bid. but without proof, they will do the same thing as ebay and just say "we're doing everything we can to prevent shill bidding"

[jasons]

I heard this years ago from a friend whos father is a player in that big boy car circle.

[BMartin914]

When you start seeing very consistent $1,000,000+ being paid for a hemi cuda, you have to wonder if something is going on...

These are not Buggatis or Dusenbergs or Birdcage Maseratis - these are 35 y.o. grocery getters with big motors from Detroit. It just doesn't make sense at a certain point.

[rwjames]

It wouldn't surprise me if this was true. Just watching most of the auction on TV, I witnessed some of this.

Even though, cars no longer have a reserve, it was obvious B-J had an idea what owners wanted for their cars. Some auctions were ended early while bidders were still talking to the assistants and many bids were placed just as the hammer fell. A lot of money left on the table.

In other cases, the bidding had obviously ended on some cars and B-J kept trying to drum up more bids which in most cases never came. If they were in such a hurry, why did they rush some cars through that obviously had more interest and then continue to drag out some cars for no apparent reason.

I have attended many auctions myself for antiques and real estate and have seen my fair share of monkey business. If antiques don't go for what they think they should, you'll see one guy in the very back of the auction house buy lots of items that show up again the following week.

I also attended an auction for a commercial property. The auction company claimed there were no sealed bids before the auction started. After I was the only one to show interest and had a bid for half of what the property was worth, a bidders assistant came up with a mystery bid that they claimed was good. I walked away and another bidder ended up buying it even though the mystery bid jacked up the price by a lot.

When it comes to auctions, let the buyer beware. Especially, B-J IMHO.

(IMG:style_emoticons/default/smash.gif) (IMG:style_emoticons/default/sheeplove.gif) (IMG:style_emoticons/default/smash.gif)

[balljoint]

An auction can also be a good way to launder money.... (IMG:style_emoticons/default/stan.gif)

[7TPorsh]

An auction can also be a good way to launder money.... (IMG:style_emoticons/default/stan.gif)

Just what I was thinking!

[carreraguy]

Thanks for the post Craig - very interesting! Kinda explains those atmospheric prices for the muscle cars!

[GeorgeRud]

Do you mean that y 914-6 isn't worth 30something thousend dollars anymore?

[KaptKaos]

I really love watching B-J, especially when they tell me that a particular car was the only one in that color, with that interior. That made me laugh.

[URY914]

I read about this on another forum. So the word must be getting out about to people. A little underground bad press will effect them in someway. I've never understood why any one would want to buy a car they really know nothing about in three minutes.

[scotty b]

Funny, I was just discussing this with one of our customers 2 weeks ago. He told me the gov't is already looking into them for one of the auctions from last year, also caught on tape. Apparently 2 guys were bidding on the same car, one guy on camera waved himself out, the auctioneer kept "upping" the bid as though there was a third bidder, then the second bidder dropped out, hammer comes down and to his surprise he (the second bidder) "won " the car. BOTH bidders on tape dropped out. Our customer also went on to say the article said it has been common practice for BJ to end an auction early so that one of there regulars can win the car at his set price (IMG:style_emoticons/default/stromberg.gif)

[Gint]

I don't doubt it.

I watched 80% of this year's Scotsdale auction and specifically remember thinking on more than one occasion, why did they end that auction while the bidding was so hot and there were still people willing to bid?

[boxstr]

The bidders receive a booklet months ahead from BJ that shows all of the cars that are scheduled for the auction. You can then critique the car and find out from past sales what an expected bid should be for a particular car.
One car that I bid on this year for a client was a GTO that had been to BJ and sold the three years previous. Each year the price increased and average of $12,754.
This told me the car should sell in 2007 for $75860. The price that the car sold at was $75700. After all was said and done. My client was happy, he now has a GTO to drive.
CCL

[smontanaro]

The presence of live TV has to have a significant effect on the auction, much of it negative. Just like other broadcast entertainment, people are interested in "action". In the auction business that action is selling stuff, preferably for large sums of money. B-J is understandably going to skew things to make lots of cars sell very fast for loads of money. My guess is that the revenue they generate from TV far outweighs the extra fees they might get from waiting an extra minute to bring the hammer down on an active auction.

Also, think of who's watching. It's not the guy with a Duesenberg waiting to be restored. It's the guy with a clapped out Barracuda on blocks in the back yard. There are a lot more potential 'cuda-owning butts in chairs watching than duesie-owning butts. Cater to the audience you know is out there.

"Hey honey! Get me another beer! A Hemi 'Cuda just sold at B-J for $95,000!!! We're gonna be rich once I finish restoring mine. *buuurrrppp*"

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