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Fumbling the Franchise

Edgar Bronfman Jr. Wanted to Be a Media Mogul. That Dream Cost Him Billions, as Well as the Canadian Liquor Empire His Grandfather Built. Guess What? He Still Wants to Be a Media Mogul.

November 16, 2003|Dennis McDougal | Dennis McDougal is the author of "The Last Mogul: Lew Wasserman, MCA and the Hidden History of Hollywood" (DaCapo, 2001).

From the fourth-floor conference room windows of Edgar Bronfman Jr.'s midtown Manhattan venture capital firm, the Seagram Building rises like a specter above the affluent Park Avenue foot traffic--a constant reminder of what the Bronfman empire once was. A plaque on one of its marble walls declares the skyscraper to be the last masterpiece of legendary architect Ludwig Mies van der Rohe and, thus, a New York historic landmark to be forever labeled Seagram. Never mind that Bronfman orchestrated the sale of his family's company three years ago to finance his dream of a global media empire built around Universal Studios.

During four hours of interviews in September, after he failed in his bid to buy back the entertainment company he once controlled, Bronfman was eager to point out that the family liquor dynasty began disintegrating years earlier. Seagram hasn't owned the building since 1979, he noted. Still, until last spring, he continued to work out of the Seagram Building.

But that was last year. Edgar Jr. has since moved across the street to the Lever House, where he has a clear if melancholy view of the building that stands like a lost family heirloom. Edgar Sr., now retired, and as fortunate a dealmaker as ever trod Wall Street, was once Edgar Jr.'s staunchest supporter. Nowadays he doesn't say much about Seagram, his son, or the expensive Hollywood gamble that cost the Bronfmans Universal, their liquor business and a good portion of their multibillion-dollar fortune.

By some estimates, the Seagram wealth has dissipated by at least $2 billion during Edgar Jr.'s more than five-year stewardship. His latest effort to win some or all of it back failed, when he lost a desperate bid to regain Universal. And while there will never be a tin cup in any of the Bronfmans' futures, the double loss of Seagram/Universal--first in 2000 to the French telecom giant Vivendi, and again this fall to General Electric's subsidiary of NBC--has split the family and been a jagged little pill for Edgar Jr. to swallow.

How was he able to lose so much of the family fortune in such a short time?

Bad timing and worse luck had something to do with it, but part of the answer lies in the personality and family history of Bronfman himself. He continues to spout well-rehearsed bizspeak about amorphous plans, and to claim that Vivendi shareholders were the real winners. But among his former Hollywood associates who view his lost grip on Universal as a failure, his is a weak argument.

On a September afternoon, Edgar BronfmanJjr. sits at his usual see-and-be-seen power table at the center of the perennially chic Four Seasons restaurant in midtown Manhattan. He is wearing a custom-tailored jacket over a slightly rebellious crew-neck sweater in a restaurant that has had a dress code for a generation.

At 48, Bronfman looks at least a decade younger. He first grew his closely trimmed trademark reddish-brown beard to overcome a perception of immaturity, and that slightly scruffy appearance, paired with his tailored wardrobe, suits him. Before ordering cracked crab on ice, he carefully covers the edge of the linen tablecloth with his own napkin to avoid a mess; then Bronfman attends to the needs of his guests: Have they ordered? Did they get anything to drink? Bronfman seems to care about others, sometimes to a fault. An avowed foe has described Bronfman's attentiveness as "feigned obsequiousness," but it certainly appears genuine.

Bronfman drinks only water for lunch, though he says he has sampled his share of Seagram's finest. When he addresses the Seagram/Vivendi debacle, among his first concerns are for the shareholders whose livelihood and pensions depended upon him. It's hard to tell whether this is heartfelt or noblesse oblige because Bronfman can switch without warning from deferential to defensive. He plays many roles: heir, pop-culture maven, student of Wall Street, would-be tycoon.

Last winter, he cast himself in the self-described role of "lion tamer" to a group of unruly private investors, pulling them together long enough to tender a $13-billion bid to buy back his Universal empire. He kept an unusually high profile throughout the summer, and by September, when Vivendi chairman Jean-Rene Fourtou promised to name a winner, it looked as though Bronfman might have triumphed. Up to that point, every Hollywood high-roller from MGM's Kirk Kerkorian to Viacom's Sumner Redstone had dropped out of the bidding for Universal, its USA, Sci Fi and Trio cable channels, and its theme parks. Their reasons were simple: Vivendi wanted too much money.

But Bronfman, who had stepped down from his vice-chair position on Vivendi's board in May to join the bidding, had a score to settle, as well as a fundamental belief in Universal's intrinsic value. The studio might not currently be worth the $14 billion Vivendi was demanding, but Bronfman thought the asking price was close enough that he meant to stay in the game to the end.

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