Talk about throwing good money after bad.After arguably losing much of his family's fortune in the entertainment business -- first by purchasing a movie studio and record company, then by selling them for stock in Vivendi Universal ( V) -- Seagram scion Edgar Bronfman Jr. just can't get enough. Vivendi Universal, which is trying to sell off its U.S. media businesses to help undo the damage done by former CEO Jean-Marie Messier, said Wednesday that Bronfman has told the company he intends to lead a consortium of potential purchasers of these assets. Following a Monday meeting of Vivendi's corporate governance committee, the company says it reached a mutual agreement with the Bronfman family to suspend Vice Chairman Bronfman and his father, Edgar M. Bronfman, from board participation, and to put a hold on certain other agreements between Vivendi Universal on one side and members of the Bronfman family on the other. Thus, Edgar Bronfman Jr. has a chance to live out the greater fool theory yet again. After he became the latest outsider to take a stake in the entertainment business -- first by purchasing control of the Universal movie studio and theme parks, then by purchasing the Polygram music label now known as Universal Music Group -- Bronfman seeks to buy some parts of these assets all over again from the once-mighty, now-fallen Vivendi Universal. Shares in Vivendi Universal, which traded above $62 when the company was created in the December 2000 merger of the French utilities company Vivendi, the French TV network Canal Plus and the liquor/entertainment company Seagram, jumped $1.04 to $17.15 Wednesday upon news of the Bronfman consortium. The sale of the entertainment assets, which current Vivendi Universal CEO Jean-Rene Fourtou is seeking as he regroups the company into a European-based telecommunications firm, promises to be a messy, complex affair whether or not Bronfman ultimately participates.
One key player will be Barry Diller, who until recently was chairman of Vivendi Universal Entertainment, the Vivendi subsidiary that holds Universal Studios, the Universal theme parks and broadcast TV and cable assets contributed by the Diller-led company now known as USA Interactive ( USAI). Diller, who along with USA owns a minority stake in VUE, has made it clear that little will happen to VUE without his consent. In a Securities and Exchange Commission filing last month, USA said that if Vivendi Universal were to sell its own stake in VUE, both Vivendi Universal and any buyer would be subject to several USA-friendly restrictions. If Vivendi were to sell "virtually any" of VUE's assets, says USA, such a transaction would require either USA's consent or an irrevocable $2 billion letter of credit for Vivendi. Another likely player would be Liberty Media ( L), another business-partner-turned-litigant of Vivendi Universal. The John Malone-led media company said last week it was interested in VUE's assets. Earlier this year -- in what may or may not have been a negotiating ploy -- Liberty sued Vivendi Universal over the deal in which Vivendi Universal bought Liberty's stake in USA Interactive.