Edgar Bronfman Jr. has often been derided as the spoiled rich kid who blew his family’s liquor fortune on Hollywood, but in reality he nearly tripled it.
Now, capping six years of intense dealmaking which culminated in folding the Bronfman family-controlled concern Seagram Co. Ltd. into the world’s second largest media company, Vivendi Universal, the soft-spoken mogul plans to walk away, possibly to start a new company.
Save for the timing, it was no surprise that on Thursday, Bronfman, 46, said he would step down as executive vice chairman of Vivendi in 2002. The announcement came one day after another major U.S. media figure, AOL Time Warner Corp. Chief Executive Gerald Levin, announced his resignation from the world’s No. 1 media company.
In an interview, Bronfman said the timing was purely coincidental and that he had been discussing the move for a month. He plans to remain as non-executive vice chairman of Vivendi Universal and be active on the board.
The billionaire had been at the helm of Vivendi with flamboyant group chairman Jean-Marie Messier since their companies merged late last year, although he admits he never expected he would remain long at the new company.
“In designing the Vivendi merger, I made a fundamental decision, which was consistent with my target to prize value over control. This (the announcement) is a natural extension of that decision. I’m ambitious to climb another mountain and it’s not constructive to pursue that within Vivendi,” Bronfman told Reuters in an interview.
Bronfman expressed no regrets, but rather pride, about the metamorphosis of his family’s company under his leadership. “There’s no question that Seagram shareholders had a good ride over the last six years. It was important to me to improve the returns for Seagram shareholders and the family,” Bronfman said.
“The family’s financial base has been significantly improved. The family shareholdings were worth under $3 billion when I started as CEO in 1994 and when we sold to Vivendi, they were worth $9 billion,” he said, noting those values along with other media companies and the entire stock market have now fallen to about $7.5 billion.
STANDS ON HIS RECORD
When asked why he is often maligned in Hollywood and the press, Bronfman said he stands by his own accomplishments. “I’ll stand on the record and they can think what they want to think,” he said.
The Vivendi deal was the latest in several gutsy and sometimes controversial moves by Bronfman, who first joined Seagram in 1982. Prior to that, he stayed away from the business, founded by grandfather Sam Bronfman in 1928, to try screenwriting and songwriting. He is well-known for his passion for music.
Seven years after joining Seagram, Bronfman was president and viewed as the heir apparent. By 1994, its diversification from liquor into show business began with the purchase of a 15 percent stake in Time Warner Inc.
In 1995, Bronfman persuaded his father, Edgar Bronfman Sr., and uncle, Charles Bronfman, to sell Seagram’s 25 percent stake in DuPont Co. for $8.8 billion to finance Seagram’s acquisition of an 80 percent stake in Universal (then called MCA Inc.) from Matsushita Electric Industrial Co. Ltd.
Bronfman found himself under the gun from angry investors for the deal after DuPont shares more than doubled, dwarfing the rise in Seagram American Depositary Shares (ADS).
EARLY CRITICISM
“A lot of people were critical about Universal Pictures when we bought the company. The studio was in complete disarray, but now we’ve got a strong, profitable studio,” he said. “Quietly, without trumpeting our own success, we’ve done a lot of good things,” he said.
In another bold move, Bronfman sold Universal’s television division – including USA Network and Sci-Fi Channel, as well as its money-losing domestic TV production unit – to Barry Diller in October of 1997 in exchange for $1.2 billion in cash and a 45 percent stake in Diller’s company.
It was a controversial move in Hollywood, and industry sources say Messier now wants to get back into TV more aggressively.
In one of his most highly praised moves, Bronfman in 1998 turned Seagram into the world’s biggest music company by acquiring PolyGram for $10.6 billion.
The dust from that deal had barely settled when Bronfman saw he needed to find a partner like Vivendi to compete within the digital media revolution against a merged AOL Time Warner.
Now the tall, bearded, bespectacled executive is ready to move on and said he would like to “lead an enterprise.
Claiming he has no formal plans, Bronfman said this marks “the beginning of an exploration. I don’t think you can plan for what’s next until you make this decision.
“It’s inappropriate to be a full-time employee and spend a significant portion of your time pursuing other opportunities.”
