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
