In New Book, Charles Bronfman Provides An Unvarnished Account Of The Seagram SagaMay 2, 2017
In his new book, “Distilled: A Memoir Of Family, Baseball and Philanthropy,” Seagram heir Charles Bronfman tells his side of the story surrounding the sale of The Seagram Co. and the unraveling of the Bronfman family drinks empire.
Charles is the son of Samuel Bronfman, Seagram’s legendary founder and patriarch. Charles’s older brother Edgar M. Bronfman ran Seagram’s U.S. operations, and eventually the entire company, from the 1950s into the 1980s. In those years, Seagram was the U.S. market’s largest spirits player, with twice the revenues of its nearest competitor. The company was also a global colossus, with subsidiaries around the word.
Charles begins the saga of Seagram’s demise in 1986, when his older brother unexpectedly announced that his son, Edgar Jr., would be Seagram’s next CEO. Charles writes that he was “blindsided” by the move, which he describes as “a clear violation of boardroom protocol.” But he remained silent, in order to maintain family unity. It was an approach that would dominate his thinking throughout the entire affair—and an approach he later came to regret.
Edgar Jr. didn’t become chief executive until 1994, but then quickly began a series of disastrous decisions that led to the loss of the family business. Charles focuses on Seagram’s sale of its 25% stake in DuPont in 1995—a deal engineered by Edgar Jr. to finance Seagram’s transition into the entertainment business. He describes the DuPont sale as “the beginning of the end.”
Seagram sold its DuPont shares for $8.8 billion. “Had we kept that stake, it would have doubled, not counting the hundreds of millions in dividends we would have received each year for the last 20 years—meaning at least six or seven billion more,” Charles writes. “In all, Seagram’s DuPont holding would have been well north of twenty billion dollars. Once we sold, though, the company had lost its cash cow and was then on the path to losing the farm.”
Days after the DuPont deal, Seagram acquired an 80% stake in entertainment giant MCA from Matsushita for $5.7 billion and renamed it Universal, effectively putting the drinks business on the back burner. Seagram would now have four divisions: Universal Music; Universal Pictures; Recreation (including theme parks); and Seagram Spirits and Wine.
Five years later, the farm was lost. In June of 2000, Edgar Jr. announced that Seagram was selling out to French media multinational Vivendi in a three-way share deal that also included French pay TV firm Canal+. The new company, Vivendi Universal, would focus fully on entertainment. The drinks division, Seagram Spirits and Wine, would later be sold to Diageo and Pernod Ricard.
Rapidly, the value of Vivendi Universal began to collapse. Chairman Jean-Marie Messier continued a spree of ill-advised acquisitions, and the stock price wobbled. Soon the company was posting losses in the tens of billions of dollars. Ultimately, its scale was drastically reduced as key subsidiaries were sold to pay down debt. “It did end in disgrace for everyone concerned,” Charles writes. “We took a major bath.”
The book covers many other aspects of Charles’s remarkable life—including his family, his charitable endeavors and his ownership of the Montreal Expos Major League Baseball team. While the legacy of the Expos was mixed, Charles’s stewardship was a financial success. He paid $10 million for the team in 1968 and sold it for $110 million in 1989.
Charles writes in depth about his concept of “entrepreneurial philanthropy” and how his business background shaped his approach to charitable giving. “Those investments have perhaps been my best, paying dividends to my soul, and I hope they continue to do so for many, many years after I’m gone,” he writes.—David FlemingSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.