Sotheby's has guaranteed 78 percent of the value of a contemporary art sale next month, increasing the risk of losses in a market weakened by financial-market turbulence. Sotheby's promised sellers minimum prices for art valued at $174 million to $220 million, based on data in the catalog for the Nov. 14 sale, said analyst Kristine Koerber of JMP Securities. The guarantees include works by Francis Bacon, Mark Rothko and Andy Warhol. A year ago, Sotheby's guaranteed 35 percent of the value of its contemporary art sale, Koerber said. Sotheby's must pay the guaranteed amount to the seller if a work is unsold or fails to reach the agreed minimum. The high level of promised payments may be especially risky as buyers have lately discounted high-priced Western artists. A Bacon painting scraped above its low estimate and two Andy Warhols failed to sell at rival Christie's International this month in London. "When money tightens, buyers become more careful," said New York collector Larry Warsh, who plans to sell Western works to pay for Chinese art, which continues to soar in value. Sotheby's wouldn't comment on Koerber's report. Nor would Christie's, whose commitments run to 52 percent of its Nov. 13 sale, said Koerber. Before the London auctions, Sotheby's shares reached $57.64 on Oct. 10 in New York Stock Exchange composite trading, then slipped to $51.38 by yesterday's close. The stock has gained about 66 percent this year. Sotheby's Chief Executive Officer William Ruprecht couldn't be reached. He has said guarantees consistently added to profit over the past decade or so and Sotheby's approach to risk is "conservative".Bacon Bullfight Sotheby's guaranteed lots include Bacon's $35 million bullfight picture and $15 million self-portrait; an untitled Rothko painting valued at as much as $18 million; Jeff Koons's "Hanging Heart", with a $20 million top estimate; and an Andy Warhol self-portrait with a $12 million high valuation, Koerber said in the Oct. 19 report. Sotheby's contemporary evening sale may take in $220 million to $284 million before commissions, Koerber said. Christie's, which is owned by the French billionaire Francois Pinault, values its evening sale at $271.3 million to $373.4 million. Guaranteed lots include Andy Warhol's "Liz", owned by actor Hugh Grant and valued at as much as $35 million; a $30 million Rothko; a $20 million double-portrait by Lucian Freud, and Koons's "Blue Diamond", valued at around $20 million. Western Contemporary art may be most vulnerable to a setback after appreciating faster than works from earlier periods, said New York dealer Richard Feigen. Contemporary Gains The most expensive contemporary paintings, which are favored by the top 10 buyers including hedge-fund managers, appreciated 37 percent in the first half, or 4.5 times since 1996, according to Art Market Research's Contemporary Art 100 Index of the top 10 percent of works. The same index lost half of its value from 1990 to 1996. While Koerber said the spiraling of Sotheby's guarantees "is concerning," she rates Sotheby's shares "market outperform." The auction house may double its November sales of impressionist to contemporary art, which account for about a third of fourth- quarter revenue, Koerber said. The top 10 art buyers in the past year included billionaire Eli Broad, private-equity investor Henry Kravis, and hedge-fund managers Steven Cohen and Kenneth Griffin, said ARTnews magazine. Wall Street bonuses and hedge-fund payouts may decline 5 percent in 2007, New York-based pay tracker Options Group said in August. The ballooning guarantees show how the auction houses have taken the opposite bet to their customers, who have locked in prices in case the market turns down. "We'll Get Our Money" "Whatever happens, we'll get our money," London-based jeweler and art collector Laurence Graff said after getting guaranteed minimum prices on 30 U.S. artworks from Christie's in August, when U.S. subprime-mortgage losses spilled into the credit markets. Sotheby's board set a new limit in August of $500 million in guarantees. Christie's said it had similar commitments, and was depending on Russian and Asian buyers to boost sales. Phillips de Pury & Co. used guarantees to win art in 2000 and 2001. Auction losses the year after the World Trade Center bombings forced Phillips, then owned by LVMH Moet Hennessy Louis Vuitton SA, to retreat from impressionist sales, and it is now a smaller player in the market. Sotheby's, incorporated in Delaware, and London-based Christie's together auctioned almost $6 billion of art in the first half.