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NRT CEO Ryan Gorman compared Compass’ recruitment of agents and efforts to gain market share in competing marketplaces to “shoplifting,” at Inman Connect Las Vegas Thursday morning.

Ryan Gorman

NRT’s parent company Realogy is suing Compass over “unfair business practices and illegal schemes to gain market share at all costs.”

“We don’t sue for show,” Gorman told interviewer Clelia Peters, the president of Warburg Realty. “This is the real deal… the industry should take it seriously.”

Gorman encouraged everyone in the audience to read beyond the headlines and take a full look at the lawsuit. He said after reading it, people won’t wonder why Realogy is suing Compass, but rather why it took them so long to do so.

He specifically pointed to Realogy’s allegations that Compass CEO Robert Reffkin, “personally solicited Realogy to enter into an illegal price-fixing agreement where the two companies would agree to limit agent compensation and ‘compete on brand,’ but not on price.”

“He proposed the most anti-agent thing I’ve ever heard,” Gorman said.

Peters reminded Gorman that at this point, it’s just an allegation that Reffkin could not respond to. Gorman replied, in his dry-humor style, that he expects a judge will indeed make Reffkin respond to that allegation.

He said he doesn’t pay much attention to the actual stock price and that often people confuse market cap with enterprise value. Realogy’s market cap on Thursday was roughly $625 million — but Gorman said the company’s enterprise value was more like $4 billion.

“We’re currently more profitable than the next 15 companies combined,” Gorman said, noting that the market trades on future expectations and people are betting against the company’s ability to grow the bottom line in the future. He added that people are always expecting the biggest player in each industry to be displaced at the top and that could be what’s contributing to the stock decline.

Gorman also spoke briefly about Realogy’s new deal with Amazon, which resulted in the launch of TurnKey, a platform that connects consumers to Realogy agents through Amazon’s website. Those consumers get a closing gift based on the price of the home from Amazon. The cost of that gift is covered by Realogy and agents pay a roughly 30 percent referral fee back to Realogy for the leads.

Gorman said it’s a way for Realogy to get closer to the consumer, and it’s the type of partnership that a company of Realogy’s size can pull off. Realogy is often dinged for its size and ability to move quickly, but Gorman said that the partnership with Amazon is just the start.

Watch the entire conversation between Gorman and Peters in this video of the ICLV session. 

Email Patrick Kearns

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