Seagram heir wants to buy Paramount

The 69-year-old executive, heir to a former beverage giant, made a last-minute bid this week to take control of Paramount Global, home to the Top Gun and Godfather franchises. His bid comes as Paramount is about to be sold to the offspring of another billionaire: David Ellison, CEO of film producer Skydance Media and son of Oracle co-founder Larry Ellison.

Bronfman sees in Paramount “significant growth potential” and the opportunity to reshape “one of the world's most celebrated media companies,” according to a letter delivered this week to Charles Phillips, chairman of Paramount's special committee of directors. The letter was seen by The Wall Street Journal.

Bronfman prides himself on helping companies navigate big transformations. He also enjoys making bold bets. He constantly asks himself a simple question he was asked as a young man, before he produced his first film as a teenager: “Why not?” And when he was presented with the opportunity to run Paramount, he found himself asking that question again, according to those close to him.

“He’s looking for a great future,” said Barry Diller, chairman of the IAC media conglomerate and a friend of Bronfman’s since they were teenagers. “Maybe he’s Don Quixote. Or maybe, given Mr. Money Bags, it’s not a winning position — who knows? But he’s looking.”

Bronfman first entered the entertainment world as a teenager, running errands on the set of the 1971 film Melody. After high school in New York City, he skipped school and began a career as a songwriter, eventually writing lyrics for Celine Dion, Barbra Streisand, and Dionne Warwick under pseudonyms.

Decades later, Bronfman has reshaped the music industry as an investor and executive, though he has had mixed success in the broader media sector.

In the mid-1990s, he helped transform his family's business — Seagram, a Canadian maker of alcoholic beverages, juices and sodas — into a diversified media conglomerate. The foray proved more complicated than making drinks.

Less than a decade after building the conglomerate, Bronfman decided to sell Seagram to French rival Vivendi in 2000, a deal that destroyed billions of dollars in value for his family.

Paramount is facing a lot of disruption. As millions of American homes go offline each year, the company's television businesses, which include CBS and cable channels Comedy Central and Nickelodeon, are eroding rapidly.

Bronfman is looking for ways for Paramount to cut costs through partnerships. In recent weeks, he has been in talks with streaming hardware maker Roku — in which his venture capital firm, Waverley Capital, was an early investor — to provide back-end technology for Paramount’s streaming service, according to people familiar with the situation.

“The media landscape is changing, as it has in the past and will again,” Bronfman said in his letter to Phillips. “However, the value of content has increased over time.”

Waverley was an early investor in Pluto TV, the free, ad-supported streaming service later acquired by Viacom, now Paramount. Other investments include Athletic, which was acquired by The New York Times, and FuboTV, a sports-focused streaming service of which Bronfman is executive chairman.

“He and I always talk about his work at Universal and Warner Music, what happened back then and how he was able to overcome those situations,” FuboTV CEO David Gandler said of Bronfman.

Bronfman is unlikely to win the Paramount prize. Skydance has the right to counter any offer and has deep pockets, given that the CEO’s billionaire father is helping to back the effort. On Thursday, Skydance asked Paramount to end negotiations with Bronfman because they violated the terms of its own negotiations with the company.

Ellison and Bronfman are similar in many ways. “Both are wealthy scions with creative minds who have propelled their family businesses into entertainment,” said Chris Marangi, co-chief investment officer of Gabelli Funds, Paramount’s second-largest voting shareholder.

“Bronfman's advantage is that he is well known and deeply loved by Wall Street investors,” Marangi said.

Bronfman became interested in film in the late 1970s. He co-produced the 1982 film “The Border,” a failure starring Jack Nicholson. Later that year, he accepted an invitation from his father, Edgar Bronfman Sr., to join Seagram in Europe.

As Edgar Sr. prepared to choose the next head of Seagram, many thought it would be the family's eldest son, Sam. But he ultimately chose Edgar Jr. for the role.

He took over as CEO of the family business in 1994 and put in place plans to steer the alcoholic beverage business into media, which he believed offered better growth opportunities.

In the years that followed, Bronfman set about building a media empire. In 1995, he acquired MCA, the movie, music and theme park giant, which he renamed Universal Studios and Universal Music Group. Two years later, Seagram sold its USA and Sci-Fi cable channels and nearly all of its Universal Studios production company to Home Shopping Network for $4.1 billion. In 1998, he made the largest deal in music industry history: the acquisition of PolyGram, home to artists such as Hanson and LL Cool J, for $10.6 billion.

The PolyGram deal, funded in part by the sale of Seagram's Tropicana juice business to PepsiCo, transformed the Canadian alcoholic beverage maker into the world's largest music company. It gave it some clout, but the industry was on the brink of massive digital disruption brought on by the internet age.

Bronfman quickly concluded that Seagram did not yet have the critical mass to compete with other media giants and orchestrated its sale to French conglomerate Vivendi in 2000 for $34 billion in an all-stock deal. Vivendi sold the core beverage business to Pernod-Ricard and Diageo, which split the assets, marking the end of Seagram's 143-year-old spirits empire.

Vivendi Chairman Jean-Marie Messier went on a spending spree. Eighteen months after the Seagram acquisition, Vivendi was saddled with debt and on the verge of bankruptcy. Bronfman convinced the board to get rid of Messier, and Vivendi put its U.S. entertainment assets up for sale in 2003.

Bronfman, then a non-executive vice chairman of Vivendi, assembled a group of investors to make an offer, which fell through. Later that year, he resigned from Vivendi's board to focus on another takeover target: Warner Music, which he acquired with a group of private equity firms for $2.6 billion.

“When everyone was running away from music, he was super optimistic and prescient about the future of the industry,” said Craig Kallman, chairman and CEO of Atlantic Records, who first met Bronfman in 2004 when he took over at Warner Music.

Bronfman then took Warner Music public in 2005 before selling the company to billionaire Len Blavatnik's Access Industries for $3.3 billion in 2011.

When he visited Boston in May and met with Shari Redstone, Paramount's majority shareholder, she was impressed with his understanding of the business, according to a person familiar with the situation.

“Edgar understands artists,” said Brian Grazer, co-founder of Imagine Entertainment, who recalled his first meeting with Bronfman in 1995, at the premiere of the film “Apollo 13,” which Grazer produced and distributed by Universal Pictures. “He knows that these people are harder on themselves than anyone else because he is an artist in his own way.”

Write to Lauren Thomas at [email protected], Anne Steele at [email protected] and Jessica Toonkel at [email protected]