NEW YORK — Edgar Bronfman, Jr. still thinks the 3-year-old merger of Seagram and Vivendi, which he engineered, could have worked.
“The original merger was a bold idea that had merit in theory — until it was undone by operating execution and by overleverage,” Bronfman says today, placing the blame squarely on former Viv U topper Jean-Marie Messier.
In the year since giant Viv U nearly went belly up, the former Seagram chief exec formed his own venture capital group, Lexa Partners. He is a partner in a firm called Accretive Technologies, co-chairman of luxury goods concern Asprey & Garrard and sits on a number of boards, including Barry Diller’s USA Interactive and online movie ticketing company Fandango.
Bronfman, 47, also has seven children ranging in age from 2 to 22.
But he’s spent most of his time in recent months trying to shore up the corporate disaster called Viv U. He shuttled between New York and Paris, negotiating with banks, lobbying the conglom’s board, on which he’s the vice chairman, and helping self-proclaimed Hollywood neophyte Jean-Rene Fourtou comprehend the U.S. showbiz assets well enough to formulate a strategy.
Voila. On April 29, Fourtou finally declared his intention of selling Vivendi Universal Entertainment as a package this year — a huge step ahead, Bronfman says.
“I would say now that Vivendi’s worst days are behind it. Clearly there is light at the end of the tunnel,” he says, speaking from Paris after taking a battering by incensed Viv U shareholders at the conglom’s annual meeting.
Bronfman faded from the headlines after leading a pivotal and highly publicized push last summer to oust Messier.
But the soft-spoken former Seagram CEO and scion of one of Canada’s richest families took the spotlight briefly last week as shareholders rained insults, comparing his family to Al Capone’s, bashing his meaty consulting fees and inviting him to quit the board ASAP.
Shareholders, who have seen the value of their Viv U investment shrink by more than 80% since the merger, also piled on Fourtou and just about any other exec in sight at the raucous confab.
Despite a nasty bout of laryngitis, Bronfman shot back.
“I initiated the action to remove Mr. Messier,” he reminded the group.
But by then it was too late for shareholders as the company faced default and saw its credit rating and stock price plummet. The board has come under intense fire for not policing Messier’s acquisition spree and the debt it created.
The Bronfman family, Viv U’s largest shareholder, has lost more than anyone. But they did the deal — and, unlike some shareholders, they don’t depend on Viv U stock for a comfortable retirement.
It’s a darn shame that the former Seagram chief exec made such a disastrous choice of partner just as a painfully earned reputation in the biz was starting to take hold.
“I’ve never worked for a better CEO,” says one Viv U exec. “He was a decisive manager and had become very savvy, despite never having gone to college.”
Bronfman’s days as songwriter, film producer and lad-about-town from a rich family initially provoked snickers on Wall Street. Then he pulled Universal Studios out of a trough, bought the world’s biggest music company and ran it all well.
“He made a personality mistake with Messier,” the exec says.
Former AOL Time Warner CEO Gerald Levin picked the wrong business, Bronfman the wrong guy.
Now behind the scenes, Bronfman is said to have been key in orchestrating Diller’s exit from the helm of VUE. USA Interactive is a shareholder of Vivendi and embroiled in a tax dispute with the French conglom. Diller’s running both companies was a clear conflict of interest.
Diller could emerge as a bidder for VUE with a partner like Liberty Media. Every major showbiz conglom has expressed interest in all or part of VUE, which Vivendi finally decided it wants to sell in one piece.
But neither Bronfman nor Viv U is said to favor any one offer. The only public overture to date is a bid by oil billionaire and former 20th Century Fox owner Marvin Davis and a group of financial investors.
Other offers are expected to start coming in by late May or early June after interested parties review the books.
As Viv U moves ahead with the sale process, Bronfman’s involvement is likely to wind down. But with his family’s fortunes and Vivendi’s still entwined, don’t expect him to be far from wrangling.