Magazine article Newsweek

Edgar's Exit Strategy

Magazine article Newsweek

Edgar's Exit Strategy

Article excerpt

If Seagram CEO Edgar Bronfman Jr. ever sweated, he was cool enough to do it in private. Since the mid-1990s, the part-time songwriter labored to turn his family's booze empire into a global entertainment giant. First, he invested in Time Warner, then acquired Universal Studios and finally gobbled up PolyGram, the world's largest music company--for a total investment of $19 billion. But Time Warner denied him a board seat and Universal released a string of box-office bombs. Lately such Internet buccaneers as Napster have threatened the music business, and Bronfman's rivals, especially the looming behemoth AOL Time Warner, have cast an ominous shadow over his company.

As the temperature was rising outside the company, things were also getting uncomfortable on the inside for Bronfman, whose family owns 24 percent of Seagram. His Uncle Charles had agreed to his nephew's Hollywood incursion out of family loyalty, but afterward he sold part of his Seagram stake. His sale was widely seen as a vote of low confidence, although he said it was for financial-planning purposes. NEWSWEEK has learned other relatives have been quietly fretting about the uncertain dividend payments that the hit-driven entertainment industry produces. That uncertainty means they may eventually have to sell shares in the company to finance their lifestyle, according to a source close to the family.

More haunting, a hostile raid on Seagram loomed as a possibility. Earlier this year, sources told NEWSWEEK, buyout kings Blackstone Group and Henry Kravis were approached by prominent entertainment executives about backing a bid for Seagram. And a top media-industry investment manager, Gordon Crawford, tried repeatedly to persuade Viacom CBS boss Sumner Redstone to acquire Seagram, according to people close to the matter. All the parties declined to comment or couldn't be reached. …

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