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Family Business, or the Tale of Two Edgars
Edgar Bronfman Jr. has always been an enigma to the music business. When he bought MCA in 1995âwhich he would use to build Universal Music into the worldâs largest record companyâpeople in the record industry noted that he didnât conform to stereotype. He was neither a âkiller,â the cutthroat executive whoâd chewed his way through everyone ahead of him on the corporate ladder, nor a âreal record man,â the romanticized and no less Machiavellian music maven with a feel for the street and the will and raw ego to transform a lifelong obsession with music into a commercial empire cut in his own image. âIâm not sure what he brings to the table,â one second-generation record executive said dismissively at the time. âHeâs not book smart and heâs not street smart.â
In 1955, the year Edgar was born, his familyâs liquor empire, Seagram, supplied one of every three drinks sold in the United States. His father, Edgar Sr., is the only person to have made the Forbes list of Americaâs five hundred wealthiest individuals every year since its inception, and his mother, Ann, is a Loeb, of the historic Wall Street investment bank Kuhn, Loeb & Company. Home for young Edgar was a duplex penthouse at 740 Park Avenue, the celebrated building where Jacqueline Onassis grew up and Time Warner founder Steve Ross owned a thirty-two-room penthouse. On the weekends, Edgar swam and played tennis at the familyâs Georgian-style mansion in Purchase, New York, and played with the other wealthy Jewish children at the Century Club. Once asked what it was like to grow up a Bronfman, Edgar laughed. âItâs terrific. I thoroughly recommend it.â
Being a Bronfman hadnât always been such a great deal. In 1888, Edgarâs great-grandfather, Yechiel, a Bessarabian miller and tobacco farmer, fled a pogrom with his family to become part of what proved an unsuccessful Jewish agrarian community in Wapella, Saskatchewan. Yechiel grubbed for work in the frontier towns dotting the western lines of the Canadian Pacific Railway. There, along with his oldest sons, Abe and Harry, he sold scrap wood in the summer and frozen whitefish in the winter.
According to family legend, the Bronfmans discovered the liquor business through the circuitous route of trading horses. It was a tradition to seal those deals with a drinkâand usually the only place to do that was the bar in the small hotel that marked each railroad town. The Bronfman boys saw that dispensing drinks was a better deal than buying them and cobbled together the money for a small hotel in Emerson, Manitoba. It proved a good idea: by World War One they owned hotels in Yorkton, Saskatchewan, as well as in Port Arthur and Winnipeg, the latter managed by a younger brother, Sam, who was just twenty-two. The last son born in Russia, Sam engineered the Bronfmansâ almost inconceivable change of fortune, moving them in one generation from the shtetl to the castle. Faced with lifelong accusations that their hotels had been little more than brothels, the rapacious and unapologetic Sam would declare, âIf they were, then they were the best in the West!â When Canadian prohibition hit in 1916, the Bronfmans gave the first indication that they were a business family to be reckoned with.
Their economic salvation lay buried in a loophole of Canadian law. When the country went dry, each province determined the specifics of prohibition within its borders, while the federal government retained control over sales between provincesâwhich remained legal. Unable to sell alcohol in their hotels, the Bronfmans moved into the mail-order liquor business and opened warehouses around the country for the sole purpose of using the federal provision to ship whisky from province to province. And when World War One rationing later banned alcohol sales for any but medicinal purposes, the Bronfmans obtained drug wholesaling licenses and sold their wares to drugstores. In the end, the brief-lived Canadian prohibition proved a boon to the Bronfmans, a tune-up for what was to come in the United States.
By the time of the Volstead Act in 1920, the Bronfmans had ware-housesââboozoriumsââin small border towns from British Columbia to Ontario, where Americans could purchase all the liquor they wanted legally. It was a rough-and-tumble business, and a Bronfman brother-in-law managing several of the warehouses was shotgunned to death by bootleggers in 1922.
Harry, who ran the business, had a ready supply of Canadian and Scotch whisky but saw a chance for the family to do even better by making its own. The Bronfmansâ first forays into distilling were reputedly nothing more than rotgut: four parts water, one part pure grain alcohol, a few gallons of someone elseâs good whisky for flavor, a touch of caramel for color, and a dash of sulfuric acid for a little kick and the illusion of age. The famous aged Scotch whiskies Glenlivet (which the Bronfmans would eventually own) and Johnnie Walker inspired the familyâs fake brandsâfinger-numbing two-day wonders âJohnny Walkerâ and âGlen Levitt.â They were a howling success. And though hardly alone in the perfectly legal business of selling alcohol in Canada to Americans, they were far and away the most aggressive. They would one day agree to a settlement with Canadian and American tax authorities amounting to a de facto admission to having provided 50 percent of all whisky smuggled in from Canada.
In 1924, the Bronfmans purchased the shuttered Greenbrier Distillery near Louisville, Kentucky, tore it down, and shipped the equipment to Montreal, where they built a new distillery in Ville LaSalle on the St. Lawrence River. Two years later they started Distillers Corporation Ltd. as a partnership with the Distillers Company Ltd. of Great Britainâthen the worldâs largest distillerâand became the exclusive Canadian agents for many of the worldâs best Scotches. In 1928, they purchased Ontarioâs Joseph E. Seagram & Sons, a small distiller with a good reputation. In one of their most prescient moves, the Bronfmans held back their best and better-aged liquor and sold parched Americans such now-forgotten beverages as Chickencock (sold in a can), stockpiling their superior distillations against the day Prohibition would be repealed and consumers could afford to be more selective. More than any other, this move made the Bronfman fortune. When Prohibition ended in 1933, Seagram was sitting on 3 million gallons of aged and select whisky. Overwhelming their competitors, they bought US distillers, brands, and distributors, and by 1938 claimed to be the leading company in the US spirits market.
Throughout much of Prohibition, Sam and Harry had each held 30 percent of the company. But Harry found himself indicted on various bootlegging and related bribery charges. He eventually beat them, but the publicityâparticularly regarding his flair for convincing key witnesses of the financial merits of moving beyond the reach of the courtsâmade him a less-than-ideal candidate to head the rapidly expanding and increasingly respectable company now known as the Distillers CorporationâSeagramâs, Ltd. As Sam made the company more and more his own, he would present his brothers and sisters with a succession of revised share plans, until he personally held 37.5 percent out of the familyâs 51 percent stake in the company. At that point, he and Allan, the youngest brother and Seagramâs attorney, were the only ones retaining significant shares and inputâand Sam always made sure Allan knew the score. âThe business is mine,â Sam told him. âYou must understand that the words âweâ and âusâ no longer apply.â
Taking over, Samâor Mr. Sam, as he was now called by his employees and associatesâconcentrated on expanding the business in the United States and treating himself like a pasha. He acquired a chauffeured Rolls-Royce and moved the family to Westmount, the English-speaking suburb that most of Montrealâs affluent Jews called home. There, Sam and Allan occupied adjacent mansions at the top of Mount Royal. Sam usually spent his weeks in New York, traveling back and forth to Montreal by private sleeper car on Friday and Sunday nights. His apartment at the St. Regis Hotelâwhich he kept for thirty yearsâwas the largest in the hotel and boasted an oak-paneled living room, a library, three bedrooms, a full kitchen, a maidâs room, and two butlerâs pantries.
Nursing an irrational fear that Prohibition could return, Sam strived to make drinking as respectable as possible. Seagram urged consumers to drink moderately and following World War Two, made several prestigious European purchases, including both Perrier-JouĂ«t and Mummâs champagne, cognac maker Augier FrĂšres, and the highly successful wine shipper Barton & Guestier. But Samâs greatest feel was for marketing and selling whisky, and he was justly proud of his creation and launch of the companyâs two premium whisky blends, Crown Royal and Chivas Regal. He acquired the Aberdeen-based Chivas Brothers for ÂŁ80,000, intent on making the small, well-regarded distiller into the greatest name in blended Scotch whisky. Crown Royal, packaged in its signature purple jewelry bag, was a triumph of marketing and likely Samâs greatest moment as a liquor executive. It commanded top dollar and for more than twenty years had no real competitors.
Despite the newfound wealth, Mr. Sam spent much of his adult life and large chunks of his fortune in a fruitless attempt to deny his past and wash away the stain of bootlegging. Driven by a near maniacal need for acceptance, he falsely claimed to have been born in Canada, affected an English accent, and became a devout Anglophile. He gave millions of dollars to both the Liberal and Conservative parties in a vain quest for one of Canadaâs ceremonial senate seats. When he attempted to join such exclusive Montreal institutions as the Mount Royal Club, he was rebuffed with a potent cocktail of anti-Semitism and elitist disdain for the way the arriviste Bronfmans had made their formidable fortune. Unwelcome in society, he grew dictatorial in the world that he could control, erecting a cult of personality in which he was all things Seagram: master blender, marketing genius, infallible corporate titan. In order to avoid inheritance taxes, Sam and Allan had jointly placed their 3.3 million shares of Seagram stock into trust for their children through Seco Investments, a holding company with two parts: Cempâfor the 2.2 million shares for Samâs children Charles, Edgar, Minda, and Phyllisâand Edper, which held the 1.1 million shares of Allanâs sons, Edward and Peter. However, Sam made sure that his majority share in Seco gave him the right to vote all of its stock and subsequently used his absolute control over his brotherâs shares to bar Edward and Peter from coming to work at Seagram. Finally, in 1960, Sam announced that he wanted to buy 600,000 of Edperâs 1.1 million sharesâat a discount, of course. His nephews agreed, partly out of a perceived threat that Sam would strip their father of his Seagram vice presidency if they refused. Over the next few years they earned a measure of revenge by unloading all of their Seagram shares and launching an investment and real estate empire of their own.
Tyrannical and abusive, Sam would berate employees, his favorite all-purpose sobriquet âcocksuckerâ applied continuously and without prejudice to salesmen, lawyers, board members, and secretariesâand even at the dinner table until his wife, Saidye, shamed him into silence. âCocksucker,â she mused. âIsnât that a charming word? Cock-sucker. Iâm going to learn to use that.â His greatest vitriol was aimed at his younger brother, Allan, whose acquiescence to being abused only seemed to provoke him further. Sam once threw an ashtray at Allanâs head during a meeting. When Mr. Samâs longtime attorney and advisor, Lazarus Phillips, was offered Samâs coveted seat as Canadaâs token Jewish senator by the Liberals, Sam went berserk. After three decades as the Bronfmansâ go-between, deal maker, and consigliere, Phillips found himself cut dead by Sam, who now described the man who was arguably Canadaâs most sophisticated barrister and deal maker of the day as âa two-bit lawyerâI made him a millionaire.â
In front of his children he was never seen in less than a jacket and tie, even on the hottest summer Saturday. âNext to my father,â his eldest son, Edgar Sr., would later say, âQueen Victoria looked like a swinger.â Growing up in the Westmount mansion was torture for Edgar. Slaves to their fatherâs WASP pretensions, kept at armâs distance by their mother, the four Bronfman children were placed under the care and tutelage of European governesses and nannies until they were old enough to go to boarding school. Contact with their parents was limited to two weekend meals for which they were required to dress, and Saturday evenings were set aside for âLife Lessons,â Mr. Samâs lectures on how to work hard and carry oneself in the world.
Edgar loved his father, but he neither liked nor trusted him. âOne thing I never saw Father do was give a compliment,â he said. He never forgot watching his father curse out Allan in the middle of an annual shareholdersâ meeting or throw a glass of ice water at him during a lunch. Regarding Samâs treatment of Lazarus Phillips, Edgar recalled, âThe language Father used to describe a man whom he had often called his best friend was beyond foul,â leading him to the conclusion that âthis man could turn on anyoneâmeaning me. Consciously or subconsciously, I lived with this all my life. The idea that I was only conditionally loved was reinforced by what I observed of Fatherâs conduct toward others.â
Miserable, Edgar was less than warm and considerate toward others. In a story his mother liked to tell, one of Samâs business associates, Julius Kessler, discovered that Edgar was impressed with his pocket watch and promised to give it to Edgar as a bar mitzvah present. The boy shook his head: âYouâre an old man and you might be dead by the time my bar mitzvah comes around,â he said. âYou better give it to me now.â
âMy father was an empire builder,â Edgar once said. âAnd, true to the customs of his times, the emperor needed a male heir. As the first son, I was destined to be that heir. In truth, Sam Bronfman wanted a clone.â Sadly, what Edgar didnât want, his oldest sister, Minda, craved. Tough-minded and temperamental, she was the child most capable of standing up to their father, for she was most like him, and probably best suited to be his successor. But such a role was unimaginable for a girlâleast of all any daughter of Mr. Sam. With no future in Montreal, she moved to Paris and became a baroness. Over the years, both before and after her fatherâs death, Minda made repeated attempts to become more active in Seagram business. Each effort was rebuffed.
Once he left home, Edgar grew ever more rebellious. At Waspy Williams College, where his main interests were drinking and chasing coeds, he briefly became engaged to an Irish girl in a bald attempt to anger his parents. A string of drunk driving accidents culminating in a motorcycle crash brought him back to Montreal. There, he saw Ben Raginsky, a psychotherapist Sam and Saidye had previously hired to explain the facts of life to Minda and Phyllis. Seemingly ready to accept that there might ultimately be more positives than negatives in being a Bronfman, Edgar completed his education at McGill and in the summer of 1951 went to work at Seagram.
While he accepted Seagram as his life, he still longed to be somewhere other than Montreal and spent as much time as possible in New York. It was there, filling in for his brother, Charles, on a date, he met Ann Loeb, daughter of the investment banker John Loeb, and the two soon decided to marry. Sam, who had repeatedly counseled his sons not to waste any time dating poor girls, was delighted with such a responsible match. The brideâs family was just as pleased: at the wedding reception, John Loeb quipped, âNow I know what it feels like to be the poor relation.â
Spending the summer of â53 in New York, Edgar studied at the elbow of his father-in-lawâs colleague Sam Steadman. A partner at Loeb, Rhoades & Co., Steadman pursued the then-unorthodox strategy of evaluating companies on their potential rather than their current asset value. Edgar returned to Montreal in the fall for a year in his fatherâs office before taking command of the US company. It was a role that some Seagram executivesâand his own motherâbelieved him unsuited for.
Edgar himself was deeply ambivalent about his career at Seagram. On one hand, he harbored a grudge over having to become his fatherâs successor, yet he was eager to prove himself capable of running the company should his father ever let him. Still, Edgar bristled at any challengers, real or perceived. Whatever shame he felt over his fatherâs despicable treatment of his uncle and cousins, the notion that they should even think there was a place for them at Seagram could set him off. Like a jealous prince, he ruminated on who among his fatherâs aides and executives would get to stayâand who would taste the axe.
The transformation of Seagram from its opportunistic, wild-and-wooly beginnings into a respectable international corporation drove Sam in his later career. He crafted an image for the company that bore little relation to its roots. The new company motto implied a storied past: âIntegrity, Craftsmanship, Tradition.â By the mid-fifties, the future of the company was in New York, not Montreal. When Seagram planned its new corporate headquarters on Park Avenue, Mr. Sam envisioned something in the moat-and-drawbridge school, but his younger daughter, Phyllis Bronfman Lambert, persuaded him to make what she characterized as a more âsignificantâ statement. Given free rein, she hired the already legendary architects Ludwig Mies van der Rohe and Philip Johnson. Today, the Seagram building at Park Avenue and Fifty-second Street is considered one of the greatest buildings of the twentieth century. It was a triumph for Seagram and the Bronfmansâand further proof of just how much family talent Mr. Sam had overlooked when he anointed Edgar over his daughters.
When Edgar assumed the presidency of the US distiller in November 1957, he was nowhere near as involved in the day-to-day running of the company as his father had been. âI donât much like details and Iâm not really suited to being a hands-on operating executive,â he admitted. âIâm better at laying out long-term strategy.â
Sating the old manâs ego was nearly impossible, but Edgar was audacious enough to succeed occasionally. When Ann was expecting the coupleâs first child, Edgar told his father that he wanted to name his first son for him. It was a startling suggestion: Sam was far from a religious man, but the gesture flaunted Jewish tradition. âMy husband was well aware that in Orthodox Jewish tradition a child is not supposed to be named after a living person,â Saidye said. âHe sat perfectly silent and he didnât say a word. Later, when we went upstairs to bed, he confessed that he was very pleased but was so taken aback by what Edgar had proposed that he simply didnât know what to say. He mulled it over and next morning, with a twinkle in his eyes, gave the children his consent.â Sam didnât remain abashed for long: when Minda named her second child Charles Samuel, he tried unsuccessfully to have the boyâs name changed legally to Samuel Charles.
The family trust, Cemp, also gave Edgar Sr....