Tad Smith, Sotheby’s and what it means for auction
By Curtis Kitchen, NAA Director of Publications & Trade Show
News broke this week that Tad Smith …
… will jump from his perch as CEO of Madison Square Garden at the end of March to take over as CEO at famed auction company Sotheby’s.
After receiving an inquiry from a national media outlet asking whether this kind of move is common — for business leaders outside the auction industry to be asked to come in and assume top roles — it seems prudent to explore why the high-profile and exciting Smith-to-Sotheby’s story is important to the auction industry; and why it serves as an example on a couple of trends the National Auctioneers Association believes it has seen growing the past several years.
It is important to note Smith’s move is about a media and entertainment professional taking on the challenge of re-raising an established company’s stature. For all its romance, history and deserved attention for bid-calling, auction is a method of marketing — one that provides a unique and effective set of selling strategies — and more people are coming to understand the power of the method. This has led to more instances of someone coming from outside the auction industry to lend their own experiences and talents, even at the highest levels.
But, while Smith and Sotheby’s has become newsworthy, it is important to note that such a move has become more common than one may think.
1. Crossover is happening.
The reporter I spoke with seemed surprised to hear that auction isn’t just a collection of family-run businesses these days. Well, reporter friend, there are many great examples of families doing quite well, but auction certainly isn’t limited to just that. NAA designation classes and regular auction schools have seen more and more in the way of first-generation auction professionals entering the industry. For some individuals, it was and is a solid supplemental income. For others, it may have started that way before a decision was made to go auction full-time.
Reasons for why someone may choose to pursue auction as a career can vary, but one strong pull can be working with a wide range of people and personalities through local schools, non-profits, businesses of all sizes and individual families. Doing so provides a healthy sense of belonging and standing in the community, not to mention career satisfaction as auction professionals are often asked to help solve challenges.
Elsewhere, other industries also have begun to fully recognize the flexible power that the auction method of marketing provides. Real estate offices, banks, appraisal companies, etc., are increasingly dedicating a staff person, or even whole departments, in order to provide auction as a means for moving assets.
As one could imagine, if other industries are dedicating that kind of effort, money and time into developing their auction offerings, it must be because they believe in auction’s time, efficiency, sale-control and transparency benefits.
2. Auction’s big-business relevance
An easy Google search will show how auction has, with increasing speed, begun to work its way into the general public’s forefront thinking. Reality TV shows dedicated to the auction method have been around for more than a decade. Bonds are daily bought and sold. The United States military regularly uses auction to unload equipment and continues to find new ways to do so. And, Google itself jumped into the auction services arena in the past year.
Real estate auctions are nothing new, but the actual size of auction’s influence is something that seems to have been somewhat undervalued until recently. In a study of its members who hold a current Accredited Auctioneer of Real Estate designation (see NAA designations here), it was found that with only 18.79 percent reporting, AARE-holding NAA members achieved $1.35 billion in real estate auction sales in 2014.
It’s tempting to want to extrapolate such a find, but that kind of number stands firm on its own.
So, yes, auction absolutely has its place in big business. That hasn’t ever really been the question. Instead, it seems the biggest players seem to have known this for years, and it’s just that the auction-is-relevant secret is getting out and continues to grow its public footprint when items such as the Tad Smith news arise.
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