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Sotheby’s switches CEOs two weeks before auction season
[NEW YORK] New bosses generally bring in their own people. Nevertheless, the art world was surprised to learn on Monday that the new owner of Sotheby's, Patrick Drahi, had named Charles Stewart as his new chief executive officer, replacing Tad Smith just two weeks before the start of the fall auction season.
"It is clear with this news that Drahi's vision is to take Sotheby's in a new direction," said Abigail Asher, a longtime art adviser. "It will be interesting to see what these changes bring."
In a news release, Sotheby's said the appointment was "effective immediately," though it suggested that Smith — who has served as CEO since 2015 and declined through a spokeswoman to be interviewed — had no hard feelings. "Underscoring his confidence in Sotheby's long-term success," the release said, "Mr Smith will become a shareholder of the company and act as a senior adviser to Mr Stewart."
The choice of Mr Stewart, 49, is not entirely surprising. He comes to Sotheby's from Altice USA, a communications and media company that is also owned by Mr Drahi, and the two are said to be comfortable with one another. Mr Stewart has spent the last three years as co-president and chief financial officer of Altice USA. He previously served as chief executive of Itau BBA International plc., the European platform of the Latin American corporate investment bank, and previously spent 19 years as an investment banker at Morgan Stanley.
In June, Drahi, a French-Israeli telecommunications billionaire, took Sotheby's private in a deal worth US$3.7 billion. The purchase, by Drahi's BidFair USA, returned the only publicly traded major auction house to private ownership after 31 years on the New York Stock Exchange.
Over at Sotheby's main rival, Christie's — which is also privately held — Marc Porter, the chairman of Christie's, Americas, said that the price Mr Drahi paid to take Sotheby's private, and his installment of a communications and media executive at the helm, signalled "a pronounced chasm in the way we've been doing business."
"If you pay that much for the business, you have to have a different view of the amount of profit it can create that is commensurate with the communications and entertainment business, not the fine art business," Mr Porter said. "It feels like they are choosing that digital and entertainment road as an alternative to the fine art road."
In June, Mr Smith said the decision to go private would allow Sotheby's to operate more freely, without the constraints of having to report every business decision and quarterly decline in a notoriously volatile market. "This acquisition," Mr Smith said then, "will provide Sotheby's with the opportunity to accelerate the successful program of growth initiatives of the past several years in a more flexible private environment."
Now the decision has also cost Mr Smith a position he had only recently begun to fully settle into, given his background in the entertainment, sports and media industries (he previously led the Madison Square Garden Co) and the art-world skepticism he had to overcome.
But he's leaving with something of a cushion: a severance package worth more than US$28 million.