Big family-owned businesses can get pretty swampy. The battle at Rogers Communications is a case in point. Howard Greene writes:
Every family is a delicate ecosystem. But a family-controlled business can be akin to a one-party state. This has been playing out in full view on the nasty channel between members of the Rogers family over control of the company built by the late Ted Rogers.
Bad blood in the family can eventually lead to the demise of the business. That's what happened at Seagrams:
At Seagram, the disintegration was borne of Sam Bronfman’s iron grip on the company, and his legendary temper. At one point, he forced his brother out of the business (blood didn’t count). When it came time for “Mr. Sam” to pass the baton, he handed it to his eldest son, Edgar (blood counted). His youngest, Charles, became an equal owner. He and Edgar got 60 per cent of the family holding, while sisters Minda and Phyllis got 40.
But Charles didn’t want to be CEO, even though he held the same voting power as Edgar. Although Edgar ran Seagram for years, Charles recounted how his brother was often thwarted by their father who couldn’t let go. (Disclosure: I co-authored Charles’ memoir, “Distilled.”)
Eventually, Edgar anointed his second son, Edgar Jr., as his successor (blood counted) and, according to Charles, gave him “carte blanche.” Governance types would be aghast to learn that Edgar Sr. made Seagram’s succession plan public via Fortune magazine, without informing the board of directors or Charles, his co-chairman (blood didn’t count).
Edgar Jr, however, made terrible business decisions. The first was Jr.'s decision to sell Seagrams shares in Dupont. The second was his decision to get into the entertainment business:
The sale of DuPont led to Seagram’s U-turn into entertainment, with the subsequent purchase of MCA, which became Universal Studios. This would have infuriated Sam, who’d admonished Edgar Sr. for personally buying a piece of MGM in 1968.
Meantime, five years after the purchase of MCA, as the media and technology sectors lurched towards convergence, Seagram sold itself to Vivendi for shares in Vivendi, which began a downward spiral. Not only did Seagram disappear and gobs of money evaporate. Edgar Sr.'s brother Charles didin't go to war with Edgar Jr. and Seagrams became part of history.
When I was a kid growing up in Montreal, "Mr. Sam" had reached the pinnacle of success -- the symbol of which was his house atop Mount Royal. He had risen from his Russian roots, through his early days on the Manitoba prairies, through his bootlegging career -- making and distributing bathtub gin -- to the apex of Montreal society. After rejecting his money for years, McGill University built the Sadie Bronfman Centre on Sherbrooke Street and it became a temple to the arts in Montreal.
But Seagrams disappeared. Sic transit gloria mundi.
Image: particle.physics.ucdavis.edu
10 comments:
The company Ted Rogers built is renowned for its reasonable prices and outstanding customer service. It would be sad to see it go under. Bwahahaha!
Cap
Sounds like you'd be heartbroken, Cap.
Harken back to the grandaddy of them all, Timothy E. Founded in 1869, bankrupt in 1999. Like many of us I loved Eaton's. I spent hours browsing the annual catalogue. They had two excellent stores in the Lower Mainland, one in Vancouver, the other in West Van. If it was something they carried, I shopped for it in their stores. It was so... dependable.
Eaton's commanded a 60 per cent share of department store sales in 1930. By the time the next two generations were done with it, that had fallen to about 10 per cent. The inglorious end was marked when Sears Canada took Eaton Centre for, if memory serves, $1 per year.
I was truly saddened to see it go.
I had a front row seat, Owen, as Timothy Eaton's wastrel great-grandsons ran his department stores into bankruptcy. They'd roll into the office reeking of liquid lunch, ignore their own staff and listen to pricy consultants tell them how to copy Wal-Mart. Of course, we know how well that worked out.
But, no fear, Mulroney made Fred Eaton high commissioner to Britain, while Harper appointed Thor's wife Nicole to the Senate, where she tried to change our national symbol from the beaver to the polar bear and railed against the luxury of bicycles claiming that "most of us use public transportation or walk." There's nothing like a chauffeur-driven Con shitheel telling people how to get around town.
The Rogers empire seems like it's headed the same way. Privileged scions way out of their depths and used to getting their own way are truly loathsome. I hope the Rogers clan isn't allowed to run another scam like the Bronfmans used to escape capital gains tax on $2 billion of Seagram's stock.
Cap
As a kid, I remember walking down St. Catherine Street at Christmas time, Mound. The three major department stores -- Simpsons Eatons and Morgans -- all had terrific Christmas displays. Simpsons is gone. So is Eatons. And Morgans was taken over by The Bay. The full-service department store has gone the way of the dinosaur.
But the grandchildren did nothing to save them.
Something seems to go terribly wrong in the third generation, Cap. Everything withers and dies.
I remember Rogers out here in BC, but mostly for their "negative billing" practices they got rather famous for. Don't they have an offer on the table to purchase Shaw?
So, let's see: Telus gets their TV programming from Bell and Shaw gets theirs from Rogers - as I understand it. So under our vaunted CRTC, there's really only 2 TV providers in Canada. I also notice that CTV has their ads plastered all over the American based broadcasters now as well.
Still haven't seem that "skinny" TV package that was promised; the advertising breaks are getting longer and louder than the program I'm watching. So, exactly what is the purpose (for me as a hostaged consumer) from having this organization in place again? And don't even get me started on those 2 Sports packages out of Tronna! Bah, humbug.
The less competition, Lulymay, the higher the profits. It's nice when things go your way.
Your comment regarding the big department stores in downtown Montreal, did not mention their rue St. Catherine rival, Ogilvie’s, I remember them as the ‘French’ counterpart to the trio you mentioned. This was in the late fifties, early sixties. Seems Ogilvie’s is still around in some form. Other notables MIA; Kmart, Woolco, Zellers, Consumers’ Distributing, among others. Sears catalogue, especially “Christmas Wish Book”!! were the ticket at our place when raising family.
Yes, some big retail outfits have disappeared but hey, now we have USA styled retail: Walmart and a variety of “dollar stores”. Guess we really didn’t deserve “Tarjay” as that plan flopped badly. Mac
Zellers had a good long run, Mac. But, when Target took over most of their locations, everything went south. Thanks for mentioning Ogilvie's. They used to be really popular in Montreal. I think they went through some kind of restructuring.
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