It’s three hours before show time at the Schaumburg, Illinois Convention Center. Inside and in adjacent circus tents sit 795 cars—everything from a much-coveted 1937 Cord to a much-maligned 1976 Ford Pinto. The Mecum Auctions show is revving up. A blend of contemporary rock music and oldies is blaring through the speakers, television cameras are in place, and Mecum’s traveling army of 200 workers—including a blue-shirted operations team and a black-shirted block team—are attending to final preparations.
There is one exception to the dress code: president Dana Mecum. He is wearing a yellow company shirt and matching baseball cap, but otherwise looks much like the 10,000 customers who will attend this weekend event. But Mecum isn’t just any car guy. His company auctions more collectible autos than any other in the world at 14 annual events across the U.S., including a monster 3,000-car, 10-day, $100 million extravaganza each January in Kissimmee, Florida. Mecum in recent years has also branched out into motorcycles, collectible farm tractors, and road art, the former two driving their own events. Altogether in 2017, Mecum will handle some 20,000 consignments, including 14,000 cars, and generate revenues in excess of $400 million.
For generations of Americans who came of age with octane in their blood, a Mecum event is more than just a car auction; it’s a bucket-list item. Nine out of 10 attendees will not bid; rather, they come just to ogle at precious metal and recall a youth long past. Thanks to television, the auctions reach a wider audience, providing 600 hours of annual programming on NBC’s Sports Network, where the events draw more viewers than anything except Europe’s Premier League football.
To be sure, Mecum auctions some pricey iron, but the ordinary and even sometimes the ridiculous cross the block as well. At Schaumburg, you could have bid on a 1996 Ford F-150 pickup or, for you ice hockey aficionados, a 1992 Zamboni. Mecum understands diverse tastes and does not discriminate. To him, you’re a fellow car guy, and that’s all that matters. He takes a floor-level seat on the auction block and the customers begin approaching.
“Hey, Dana, I brought my nephew,” says one. “Would you sign his badge?” Mecum cheerfully obliges.
“Dana, I’ve been coming since 1988,” says another. “Do you remember me?” Mecum not only remembers, he recalls where they first met.
“I watch you on TV all the time,” says a third attendee. I came up from Tennessee to see this and I told my cousin I wasn’t leaving until I shook your hand. I’m a car guy, but I don’t own anything like this.”
“You don’t have to own them to enjoy them,” Mecum answers.
Mecum—who runs the Wisconsin-based, 300-plus-employee business with his wife, Patti, four sons, and CEO Dave Magers—grew up in the car business. His father had a Pontiac dealership in Marengo, Illinois and later resold Avis rental cars, becoming the nation’s largest fleet dealer before getting wiped out by high interest rates in the 1980s and later recovering.
Mecum’s first auction, in 1988, ended in disaster when 90 mph winds hit, followed by a storm of litigation from unhappy customers. “My wife asked me what I was going to do. I said, ‘Hell, we might as well have another auction.’ There was no business plan—it was just survival.” For 15 years, Mecum soldiered on without making a profit, plowing his earnings from another automobile business into the auction company to keep it afloat. At one point, someone offered to buy him out. Mecum asked for $500,000 because that’s how much debt he had.
Luckily, the buyer balked, because the business has thrived to the point where Mecum can now afford to get around in his own Cessna Citation Excel.
What are your favorite cars in your personal collection?
I used to have Corvettes and muscle cars, because those are the cars I was driving when I was a kid. But when I started this business, customers would always want those cars. It was the way I was feeding my family so I would always sell them. Then I fell in love with Indy race cars because none of my customers wanted them. I loved the romance and the history about them, and I really liked the fact that customers weren’t always wanting my car. My first one was a Rex Mays Gilmore Special that was on the pole at Indy in 1935 and 1936. I still have it.
How did you get into this business?
I bought 40 semi tractors. I didn’t know anything about trucks so I traded 10 of them for four rental houses. The tenants started calling me in the middle of the night to fix this and that. So I went back to the guy I traded the trucks to and gave him his houses back and told him he could keep the trucks. He said, “You know, you’re going to lose a lot of money,” and I said, “Yeah, but I’m going to get a lot of sleep.” So a guy from North Carolina shows up with 40 collector cars and I traded him the rest of my trucks for the cars. So I had these 40 and 15 of my own and decided to have an auction.
When did you start flying privately?
I got a Citation Ultra in 2011 and moved up to an Excel in 2015. The Ultra couldn’t make trips to the West Coast without stopping for fuel.
What made you decide to buy the Ultra?I was looking at King Airs, but a friend told me I should really be looking at a jet. He said he had one for me. Even put the N number registration I wanted on it—N50LD [for “SOLD”]. But I couldn’t get my head around the expense.
Then I had a flight from O’Hare. It took me two hours to drive to the airport. I’m in the security line for an hour, get pulled out for a pat down in a private room and that takes a while, and finally I get to the gate, where I decide to use mileage to upgrade to first class. They tell me I owe $5.43 tax but they won’t let me pay them. They say I have to go back to ticketing and come through security again. So I refuse and tell the gate agent to call security because either I’m getting on the plane in first class or I’m going to jail. Meanwhile, the plane is delayed an hour for some other reason, and finally they let me on. We back up from the tarmac and sit there for two hours. So my two-and-a-half-hour flight winds up taking nine hours when you count the drive to the airport.
When we land, my phone rings. It’s the guy with the jet with “N5OLD” on it. I bought it.
It’s one of the best decisions I’ve ever made. We get to a lot of business we wouldn’t otherwise get because of the time factor. I can leave home in the morning, call on a piece of business, and be home for dinner, a trip that used to take three days on the airlines. And the worst thing is to be ready to close a deal with a customer and have to say, “Sorry, I have to leave to catch my plane.”
I’m 63 now. Money isn’t as important as quality of life. Sure, you think of the extra business you can get to with a plane, but nothing beats just getting home every night.
How has the plane enhanced your bottom line?
Over the last five years, we’ve been selling more collections—people with 15, 20, 30 cars—and those are the people we are getting to with the plane. We get most of the single-car consignments from television and internet exposure but the plane helps us get to the collections and that helps increase our bottom line.
We’re in the air two or three days every week. The first few years, I was the only one flying but now my sons are. I’ve told the other consignment guys, if they have a quick deal and other things to do, use the plane.
So you got over your concerns about the economics of aircraft ownership?
I used to fill the seats when we would go to an auction for economy but I got past that. Now when I get ready to come home I’m coming home. And I don’t have to fly the chicken and pig express [the airlines]. Besides, I’ve got a great pilot who really watches expenses. He always tanks up where fuel is cheap.
You did something unusual in a family-owned business in that you hired an outside CEO. What was your thinking?
I was a control freak, and around 1999 I got sick and had to let go and let other people do things. That was part of how I got sick: I was trying to do everything. So I learned a great lesson from that. I know what I can do well, and I have to let other people do what they can do well.
I had a hard time managing when we had six people. We have 130 in the home office now. [CEO] Dave Magers spent 37 years at Country Financial, and he has the financial background we needed.
How important has television been to the business?
Immensely. In 2008, before the banking debacle, 80 or 90 percent of our business was car dealers who would buy from us and then resell from little retail lots and in trader magazines. The recession put a lot of those people out of business. Fortunately, we started on TV at the same time so overnight we rolled from 80 to 90 percent of customers being dealers to 80 to 90 percent being the end consumer. The dealers that survived that period turned into sellers at our auctions. Their new business model was housing their cars in low-cost warehouses and bringing them to public auction. Without TV, not only would we not have grown, we might not have survived.
What’s the rarest car you’ve auctioned?
Rare does not necessarily mean valuable. Value depends on desirability, quality, and then rarity and who owned the car. We sold Steve McQueen’s Porsche for $2 million. That car, had he not owned it, would have been worth $350,000. In today’s marketplace, the restorer comes into it as well. Also, say you have two $1 million cars and one has been in five
well-known collections. That one is going to bring more money.
What’s the most expensive car you’ve sold?
In 2009, we sold a 1965 Shelby Daytona Cobra coupe for $7.25 million. In 2014, we sold a 1964 Ford GT40 [prototype] for $7 million.
Sellers can be emotional about their cars. How do you get them to lift the reserve [price] when the bidding is not moving?
It’s important to have a crowd [at an auction], whether they’re bidders or just attendees. You can have a car with a value of $20,000. If there’s no one in the audience, you can have a $30,000 bid and the guy won’t sell. Alternatively, you can have a $30,000 car with a $20,000 bid and if every seat is full, the guy will sell. I’ve seen it a thousand times: a guy turns down the best offer he’ll ever get because there aren’t enough people in the room.
The other thing is energy. If you have a good roll of selling cars, it’s contagious. If we’re selling a small collection with reserves, we try and arrange it so that the first few cars sell for sure. Otherwise, the crowd quits bidding on that collection because they think the seller isn’t serious. So a lot of mind games go on. The main thing is making people happy. If they are, it’s easier to get them to a decision.
What advice would you give a first-time buyer?
Buy what you like, not just because you think it’s a bargain. Because if you ever try to sell something you don’t like or don’t know anything about, you’re going to have a hard time. If you buy quality and pay too much, the price will catch up and you will either make money long term or at least get your money back. So enjoy what you are buying and know something about it.
Another thing for a first-timer: don’t ever go to an auction alone. Even if the guy you take with you knows nothing about cars, it helps to have someone who is on your side and you can talk to. The other thing is come to an auction [before buying] and practice bid in your mind.
Where do you see the business going from here?
The shortcoming is the age of the consumer. Look out there [at the audience]. See the age? [Almost all appeared to be over 50.] Long-term we think it will be OK, but the era I come from, everyone had gas and oil in their veins. Today, people have computers and cell phones in their veins.
Over the last 60 years our prices have gone up for four or five years, then they’ve stabilized, then they’ve gone down for a few years, then they’ve gone back up [to a new high]. But every time they go higher, the lane gets thinner.
A good example is Duesenbergs. Twenty years ago, all Duesenbergs were worth a million bucks. Today 80 percent are worth $750,000 to $1 million and the rest are worth $3 million to $10 million. Every time the prices go up, what is considered investment grade gets thinner. So we are going to have a lot of inventory, but are we going to have enough of the kind of inventory the crowd supports as it ages? That’s a big concern.
The other thing is that now we have two business models. Our core business has always been sales commissions. We now have limitless entertainment [revenue potential] if we can learn to harness it. So far, we have used it to sell more cars. Now we have thousands of people who come and will never buy a car. They’re here for the entertainment. So that’s a challenge going forward. We think entertainment can be 25 times the size of our regular business.
Any thoughts about your next plane?
I was on a customer’s Falcon 7X a few weeks ago, and that was really nice. Maybe in three years or so I’d buy one, but that wouldn’t be for business. We’ve got nine grandkids, and we like to go places.
Name: Dana Mecum
Born: Age 63. Born in Monmouth, Illinois
Position: Founder/president, Mecum Auctions
Transportation: 1999 Cessna Citation Excel
Personal: Lives in Lake Geneva, Wisconsin, with wife Patti. Has four children, nine grandchildren.