Burst bubble: Cigar mag explains $eagram's beating
The bursting of the dot-com bubble destroyed the dreams and portfolios of millions of investors, but perhaps no family lost more zeros than the Bronfmans, sometime Albemarle residents and former owners of the Seagram empire, which was swallowed whole in 2000 by Vivendi International.
Vivendi's sale of the 200-acre Ivy Creek Farm last May for $8,383,000 was merely the most local sign of an empire in trouble.
The cover story in the April issue of Cigar Aficionado magazine details how the over-ambitious dreams of Edgar Bronfman Jr., grandson of Seagram founder Samuel Bronfman and son of Edgar Sr., devastated his family fortune.
According to the article, Edgar Jr. had breakfast one morning with Jean-Marie Messier, the man in charge of transforming Vivendi, a French water and sewer utility company, into a massive media conglomerate. Likewise trapped in a relatively staid business liquor the younger Bronfman envisioned an empire to compete with such sexy beasts as Disney and Viacom. Bronfman, a onetime songwriter, sold Seagram to Vivendi in an all-stock deal.
But before the deal even closed, the Bronfman family's Seagram stock had lost nearly 10 percent of its value, falling from $6.4 billion to $5.8 billion. And it only got worse... much worse.
With Messier at the helm, things couldn't have been, well, messier.
By the time the Frenchman was ousted in July 2002, the Bronfmans' stake in Vivendi had fallen to $800 million. Though the Bronfmans were able to unload $2 billion in stock, their total loss was $3 billion, nearly half of the original investment value.
But Edgar Jr. won't give up, the article explains. He once publicly stated he'd never go down in history as "the one Bronfman who pissed away the family fortune." But if he doesn't do some fancy footwork soon, it seems that's just what will happen.
Even with new CEO Jean-Rene Fourtou at its helm, Vivendi sounds like it's on life support. Fourtou is unloading Vivendi's recent acquisitions such as publishing house Houghton Mifflin– as fast as Messier once collected them. Edgar Jr. is standing by with his fingers crossed. Neither Edgar Jr. nor Sr. returned the Hook's calls by presstime.
But though Edgar Sr.'s brother Charles– whose loyalty and love for his family prevented him from voicing his serious doubts about the Vivendi deal, according to the article– says he misses Seagram terribly, Edgar Sr. says that in a strange way the loss of the Seagram empire may have been a blessing in disguise.
Speaking of his 22 grandchildren, Edgar Sr.– who frequently jets into Charlottesville to visit his Georgetown Farm bison businesses– tells Cigar Aficionado, "As a matter of fact, I'm glad there isn't any Seagram to leave to them. You know, this whole question of entitlement and that they're the Seagram Bronfmans or whatever is not a good thing. People have to go and fend for themselves. I don't know who the hell would run it, and there would be family fights. It's much better not to have that as a legacy."