Seagram offers the total entertainment package - movies, television, music, theme parks, and a wide variety of beverages to imbibe. The company also operates about 570 gift stores, like DAPY, Glow, and Spencer Gifts. Seagram runs one of the largest distilleries in the world, and its executives are working to build an entertainment monster to rival Disney. In addition to 84% ownership of Universal Studios, the company operates the largest record company in the world. Seagram is run by the Bronfman Family, who own about 35% of the company. CEO Edgar Bronfman Jr. is the third generation of his family at the helm.

Going postal

The Seagram conglomerate was first known as the Bonaventure Liquor Store Company. Sam Bronfman bought the business in Montreal in 1916, two years before Prohibition began in that country. Bronfman sold liquor by mail, which was legal at the time, and later smuggled alcohol over the border to customers in the U.S., where temperance was also compulsory. In 1924, Bronfman and his brother Allan opened Distillers Corporation, Ltd. in LaSalle, Canada. Four years later the company purchased Joseph E. Seagram & Sons, went public, and changed its name to Distillers Corporation-Seagrams Ltd.

Noble experiment

Anticipating the end of the so-called "noble experiment," Bronfman began hoarding whiskey in the late 1920s. By the end of Prohibition in 1933, his company had the largest reserve of aged whiskeys in the world. Seagram then established now-classic brands of smooth, blended whiskeys including Seagram's 7 Crown, V.O., and Crown Royal. In the following decades, the company purchased a number of distilleries in the U.S. and the West Indies; and diversified through the acquisition of a variety of liquor brands, including Mumm and Perrier-Jouet S.A. champagne and Chivas Brothers scotch.

Around the world

In 1955, the company commissioned Ludwig Mies van der Rohe to build Seagram's landmark headquarters in New York City. Sam Bronfman's son Edgar took over as president in 1957, and worked to expand Seagram's wine and spirits offerings, both through acquisitions and through expansion of existing segments. The second-generation Bronfman was also instrumental in the company's investments in businesses ranging from Texas oil to British clothing retailers. The company changed its name to The Seagram Company Ltd. in 1975. In 1980, Seagram acquired a major stake in DuPont through the purchase of $2.6 billion in shares in Conoco Inc. In 1988, the company acquired fruit juice purveyor Tropicana Products, Inc.

Absolut expansion

Seagram has been super-active in the 1990s. Early on, the company brokered deals to market and distribute a number of beverages in the U.S., including Absolut Vodka, Patr'n Tequila and Grolsch beer. In 1993, Edgar Bronfman, Jr., the third generation to run the business, led the company's investment in Time Warner. Edgar Jr. was appointed to the CEO post the following year. In 1995, Seagram purchased Dole's juice business. But Edgar Jr. had plans to move beyond beverages. A more significant transaction that year was the sale of Seagram's stake in DuPont, which generated $7.7 billion in after-tax profits. (The young Bronfman has since been lambasted for that move - since the sale of their stake, DuPont's stock price has increased 77%, while Seagram's has dropped 12%.) Ed Jr. used the money to fund the purchase of an 80 percent controlling interest in Matsushita Electric's MCA Inc., a floundering entertainment conglomerate specializing in film production, theme parks, recording and publishing, for $5.7 billion. MCA had acquired Universal Studios when it purchased Decca Records in 1962.

Music and martinis

In 1996, the MCA Music Entertainment Group acquired a 50% stake in Interscope Records; additionally, MCA Inc. was renamed Universal Studios, Inc. That year Seagram broke the liquor industry's voluntary ban on radio and television advertising and launched campaigns for a number of its distilled spirits brands. A year later, the company expanded its interest in the entertainment business by paying $1.7 billion to Viacom to gain full control of USA Networks (it already owned a 50% stake). Seagram then shifted most of its TV assets into a joint venture with Barry Diller's Home Shopping Network. Diller runs the combined entity, and Seagram received a 45% stake, plus more than $4 billion in stock and cash (and the option to take a majority interest in the future).

The company's Universal Music Group took an equity stake in startup musicbank Inc. and began licensing its music to the group in July 2000. The San Francisco-based company develops services to give consumers access to recordings they purchase through the online database of music.

Starstruck?

Perhaps Edgar Jr. has always had superstar dreams, because he is clearly building himself a music empire. The self-described amateur songwriter has certainly received his share of criticism from the rest of the entertainment establishment. Many have described him as a rich boy (Fortune Magazine called him "a starstruck dilettante") trying to buy his way into the industry. He definitely certainly received a chilly reception from Time Warner higher-ups, who ultimately declined him a seat on the board. Plus, Since Ed Jr. was appointed CEO, Seagram's stock price has remained flat, though the Dow has more than doubled. And the company is certainly not winning many awards for management of its entertainment businesses. Universal Studios' 1997 fiscal revenues were $6.5 billion - paltry when compared to those of rivals Time Warner and Disney.

Boy toys

In the end, however, the rich boys still get all the toys. In 1998, Seagram acquired PolyGram for $10.2 billion, making it the largest record company in the world. To reduce debt and fund the deal, Seagram sold off a number of properties, including Tropicana (sold to PepsiCo), a majority share in Herve Leger (a French fashion house), and all of its shares in Time Warner. That December, due to poor box-office showings for films including "Primary Colors," "BASEketball," and "Meet Joe Black," Seagram announced a $6.5 million loss for the second quarter. This prompted a massive reorganization of Seagram's entertainment businesses. Bronfman dropped artists and music executives like they all had the plague. Today, 3,000 music industry insiders are now out of work, including Frank Biondi, Universal's former Chairman/CEO. Seagram is now divided into three areas: beverages; music; and film, theme parks and international television. This allows the successful Universal Music Group to operate outside of the troubled Universal Studios umbrella.

In the biggest move in the company's history, in June 2000, Seagram agreed to be acquired by Vivendi S.A., a French water utility that is transforming itself into a telecommunications and entertainment giant, for $34 billion in stock. The sale amounts to one of the largest media deals ever and ends the Bronfman family's control over Seagram, at the same time giving Europe a media company which rivals its American counterparts. When the deal is completed, the new company will be called Vivendi Universal and be based in Paris. Mr. Bronfman will become vice chairman, with the music and Internet businesses reporting to him. Vivendi executives do not see the liquor business as part of the company's future and plan to sell all of it, or at least a stake in it. Although the boards of Vivendi and Canal Plus (a Vivendi partner) have both approved the deal, the Seagram board and the European Union must still sign off on the deal before it may be finalized.