Sotheby’s nicks CEO from Madison Square Garden
Auction house Sotheby’s appointed Madison Square Garden Co Chief Executive Tad Smith its CEO, a surprise development that could delay the plans of the owner of the New York Knicks to spin off its live entertainment business.
Sotheby’s said on Monday that Smith, who has led Madison Square Garden for just a year, would replace William Ruprecht on March 31.
Madison Square Garden’s shares fell 1.4 pct in morning trading, while Sotheby’s shares rose 1 percent.
Smith has about 25 years of experience, mostly in the media and entertainment business.
He joined Madison Square Garden, which also owns New York Rangers ice hockey team, from Cablevision Systems Corp, whose CEO James Dolan is the chairman of Madison Square Garden.
Previously, Smith had led Starwood Hotels & Resorts Ltd’s online business, experience that could help Sotheby’s catch up with privately owned Christie’s in online auctions.
“Smith brings what shareholders want, broad-reaching ‘business’ experience rather than luxury or art experience which is what (Sotheby’s) brand and experts already have,” Stifel, Nicolaus & Co analyst David Schick wrote in a note on Monday.
Ruprecht, a 35-year Sotheby’s veteran, had been CEO since 2000. The centuries-old company said in November that Ruprecht would step down once a successor was found.
Sotheby’s, which has been under pressure from activist investors to make big changes to become more competitive, also said it had separated the roles of chairman and CEO. Lead independent director Domenico De Sole will become chairman.
Activist investor Daniel Loeb, whose hedge fund Third Point LLC was Sotheby’s largest shareholder as of May 2014, had asked the company to sell its headquarters on the Upper East Side of Manhattan.
Marcato Capital Management LP, Sotheby’s second-largest shareholder, urged the company in February to buy back $500 million of shares and replace its chief financial officer.
Third Point and Mercator were not immediately available for comment.
Smith’s departure could throw a spanner in Madison Square Garden’s plans to separate its live entertainment business from its sports and media assets.
“It sort of sets (the company) adrift until they get a new leader. And that took a long time last time,” Needham & Co analyst Laura Martin said.
Under Smith, Madison Square Garden’s net profit more than doubled in the six months ended Dec. 31.
Source : Reuters
