From the Garden to the Auction House
The art world must be pulling the monocle closer to the small print on the stock ticker today as they get a new CEO as the preeminent auctioneer, injecting some new blood, and new life into the often stodgy culture, in the form of their and a brand savvy new leader. Understand, cable TV has kicked off so much money that an idiot like James Dolan can hire Phil Jackson and lose his CEO Tad Smith of Madison Square Garden (MSG) to Sotheby's (BID) without much effect on the stock price, as shares were down slightly and BID shares are higher .
The art world expressed some reservations and mixed reaction to the idea of a non-art expert running Sotheby's, but new CEO Smith said he was a quick study and should have few issues coming up the curve in his new role. All told, this was about branding, though it was also about the share price Smith oversaw at his former job. MSG improved its underlying value during his tenure, while Sotheby's BID has declined over a similar period. CEOs are measured (and paid) based on improvement in the value of the enterprise (Company MarketCap), and this is really the only measuring stick...or, at least the one they use when they look for a new job. I think Smith has run in these New York circles as CEO of MSG for some time, and he has impressed the Sotheby's shareholders and board enough to advance his career - I'm willing to bet he got some some great tickets to MSG events for Sotheby's board members. He would be a good guy to know, and he is known to utilize his fringe benefits as part of his role as head honcho.
Growth in the Garden
As for Jim Dolan, he loses a good CEO and takes over the CEO role for MSG in the interim period until an official successor can be found. Just as Phil Jackson has assumed responsibility for basketball operations for the Knicks, this will free up all sorts of time for Dolan to undermine the work on the brand that Smith created. Smith is right that he is a brand manager, and I bet working for Sotheby's will be much less of a micromanaged task than Smith faced when he was at Madison Square Garden. Frankly, I would rather see Phil Jackson run MSG than Dolan, but you must give Jimmy something to do that allows him to flash his choppers and hairpiece.
Sotheby's has traded sideways since 2011, ranging between $30 and $50 per share, and was in danger of going out of business when stocks unwound in 2008, trading as low as $6 per share at the low. The company has had internal turmoil over the years, and they're looking for leadership in the CEO position (Who isnt'?), but Smith is very familiar with New York City, and he understands his role as a brand manager CEO in the age of social media.
As for the Garden, I say bring back Isaiah Thomas to be Jim Dolan's assistant. He certainly showed his expertise while with the Knicks!
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