Edgar Jr. redux
When last we looked in on the life of Edgar Bronfman Jr. (July 13, 2007), he’d just sold his Manhattan townhouse on East 64th Street for $50 million, a stratospheric sum that remains among the top prices ever paid in New York. He’d bought the 31-foot wide townhouse in 1995, renovated the heck out of it, then dwelt there starting in 1999.
Edgar Jr., subject of my book, The Icarus Factor, now appears to be seeking an even faster real estate flip. Last month he paid $19.5 million for an eleven-room co-op on Fifth Avenue at 85th Street, with views of Central Park. He never moved in and has put the property back on the market for $24 million, a tidy 23 per cent bump. Did the furniture not fit?
Edgar Jr.’s also in the news because he’s come under formal investigation by French authorities for insider trading in Vivendi shares dating back to alleged activities in 2000. Hard to imagine there’s anything to this, given the fact that Edgar Jr. managed to lose three-quarters of the family fortune in the misbegotten merger with Vivendi then led by the Napoleonic Jean-Marie Messier, who also is under investigation.
Much more worrisome for Edgar Jr. is his current role as CEO and an investor in Warner Music Group. After he and his private equity partners bought Warner, cut costs, and took the company public in 2005 at $17 a share, they had one good year as share price rose to almost $30. Warner has been sinking ever since and now languishes at $6 a share.
When he first acquired WMG, I believed he might achieve redemption, away from the pressures of the family dynasty but – sad to say – at this rate, such an outcome may never occur. As F. Scott Fitzgerald has written, “So we beat on, boats against the current, borne back ceaselessly into the past.”
The Vivendi-Universal deal may have been a bust, but you cannot blame him alone for its failure. Jean-Marie Messier for one, noted for his lavish lifestyle, should bear more of the critiscm than anyone…he was Chairman after all.
“During his time as CEO of Vivendi, Messier used corporate funds to buy a $17.5 million apartment for his personal use at 515 Park Avenue at 60th Street in New York City, the swank Arthur Zeckendorf development that was home to luminaries such as Senator Jon Corzine. After he was fired, Messier tried to claim the apartment as part of his severance package, but was rebuffed. Messier then relocated to New York City to work as a business consultant.”
When Mr. Bronfman took over WMG, together with his partners, the music industry was at its peak; since then, the entire market, along with Universal, SonyBMG and EMI have all lost market share due to changes in the way consumers purchase and, in more cases, illegally obtain content. The truth of the matter is that more people are listening to music more now then ever before; unfortunetly, there is no silver bullet on how to monetize it…for now at least.
If anything, Mr. Bronfman was a shrewd investor in his property deals in NY; he sold his beautiful house at the top of the market and made a nice sum of cash…who wouldn’t want to make that type of profit from selling their home? Nicely done.
I think the attacks on Mr. Bronfman are just another attempt at the media trying to create a story where there is none. If you want a story on financial disasters, look at the mess the banking sector (eg. Citigroup anyone?) has created with the sub-prime mortage lending…that’s greed if I ever saw it.