The slow burn of a sweetgrass spell

BRIAN D. JOHNSON July 6 1998

The slow burn of a sweetgrass spell

BRIAN D. JOHNSON July 6 1998

Edgar Jr. just a chip off the old block

The Nation’s Business

Peter C. Newman

Much has been made of how Edgar Jr., the 43year-old Bronfman who has headed The Seagram Co. since 1994, is switching the family empire from booze to bop, from Crown Royal and Chivas Regal to Elton John, U2 and the Three Tenors. Nobody seems to have noticed, but he's just

following in his daddy’s footsteps.

His father, Edgar Miles Bronfman, who ran the liquor empire from 1962 to 1993, was tickled by similar fancies. During the late 1960s, Edgar Sr. aced his reluctant father, dynasty founder Sam, into paying $40 million to acquire 15 per cent of Metro-GoldwynMayer, the largest single block of one of Hollywood’s major studios.

“Listen, Leo, have you got any money?” the then 39-year-old Edgar Sr. enquired. “I’ve just bought $40 million worth of MGM stock.”)

Sam, whose temper could make boys out of men, ruled his empire with an iron will, but he was a puritan at heart—that is, if you forget that his fortune was based on having been Canada’s leading bootlegger during Prohibition. He hated the idea of being involved with the sleazy Hollywood glamor game. He allowed the movie deal to go through, but repeatedly expressed his displeasure with Edgar’s impetuous idea.

(The deal actually took place in a phone call to Leo Kolber, his father’s financial adviser.

There was a memorable exchange between father and son, when Sam couldn’t hold his suspicions in check any longer, and walked into Edgar’s New York City office one morning, and confronted the freshly minted movie mogul: ‘Tell me, Edgar,” he said, demanding an answer, “are we buying

“No, Pop,” Edgar shot back. “It doesn’t cost $40 million to get laid.”

It may have started out as a lark, but by May, 1969, Edgar had gained enough clout on the MGM board to be named the studio’s chairman. Ahead of his time, he intended to merge it with Time Inc., which had quietly accumulated six per cent of MGM’s shares on its own. Nearly half a century later, his son tried to grab control of a similar combination.

Just weeks after Bronfman’s MGM purchase, a Las Vegas high roller named Kirk Kerkorian bought a larger block of MGM stock and forced Edgar out of the company, much to Sam’s relief. Edgar’s most embarrassing sequel was walking into a New York nightclub, where he was spotted by comedian Don Rickies, who stopped the show: “Hey, there’s Edgar Bronfman, he was chairman of MGM for five whole minutes!” Edgar sold his MGM shares at a profit and es-

all this God damn MGM stock just so you can get laid?” tablished Sagittarius Productions, which made some forgettable, but financially successful films with George C. Scott, Peter Sellers, Elizabeth Taylor and Robert Redford. Edgar then hired Edgar Jr. to run its music division (Bowman Music Corp.), which was a link to his son’s current preoccupation with the music business. (Edgar Jr. is also a sometime songwriter.)

Edgar Jr.’s $15-billion purchase last month of PolyGram NV—the world’s biggest record label—has turned Seagram’s from a liquor company with subsidiary interests in music, TV and film, into a global entertainment colossus. Edgar has bet the farm. Alain Levy, the outgoing CEO of PolyGram, has called his business “more dangerous than astrology.” The purchase is a big gamble. At stake is the future value of the family’s 120 million shares of Seagram stock, now worth more than $7 billion.

Edgar’s most serious previous gamble was his 1995 decision to sell the company’s $11.7billion stake in E. I. du Pont de Nemours and Co. in order to buy Seagram’s 80-per-cent share of the entertainment conglomerate, MCA Inc. Scuttling the du Pont investment has been attacked by Seagram shareholders because under CEO Chad Holliday, the oncedormant chemical firm has become a world leader in pharmaceuticals and biotechnology. The stock that Bronfman sold for $11.7 billion is worth $28 billion now, and investment analysts predict it will double in the next 18 months. Edgar’s quixotic sale of Seagram’s Tro picana juice division to help pay for the PolyGram purchase similarly sacrifices an established steady income stream for the wild swings of the music business.

Charles Bronfman, Seagram’s co-chairman, has privately expressed serious doubts about the wisdom of his nephew’s controver-

What outsiders don’t realize is that the Bronfmans, unlike the Eatons or the Southams or most of the other once-powerful Canadian clans, have found the secret of how family power can be passed on and perpetuated without the infighting that so often wrecks family solidarity. One member in each generation is charged with running the business; the exercise of authority by the chosen successor, while carefully monitored, is supreme. He is allowed his run, as was Edgar Sr. who ran Seagram’s world operations while Charles remained in charge of the relatively small Canadian business.

There has never been any question of split loyalties at the top. When Sam died in 1971, Edgar and Charles made a private odyssey to his grave on the morning after his funeral, which is against Jewish tradition forbidding family visits for 30 days after interment. As Charles explained at the time: “We wanted to make a vow over Pop’s grave, that we’ll always stick together as one unit.”

That’s how a dynasty survives.

sial tactics. But as a loyal Bronfman, he has cast his influential vote as chairman of Seagram’s executive committee behind the move.

The Bronfmans have found the secret of how family power can be passed on and perpetuated without infighting

Allan Fotheringham is on leave.