(FORTUNE Magazine) – EDGAR M. BRONFMAN SR., chairman and chief executive of Seagram Co., sat down in his private dining room last spring with his eldest son, Sam, and spoke bluntly. ''You're good,'' he said, ''but an unfortunate fact of your life is that you'll always be compared with your brother. And as my successor, he's better.'' With that, the elder Bronfman, who acknowledges his judgment's potential ''heartbreak for Sam,'' broke the news that he would anoint his second son, Edgar M. Bronfman Jr., as his heir at the giant family-controlled liquor and wine company. ''Jealous?'' says Sam, 32. ''That's not the right word. Chagrined. But I wish him good luck.'' Says Edgar, 30, impressed by his brother's reaction: ''If it had been the other way around, I'm not sure I could have handled it.'' Since Samuel Bronfman bought Seagram in 1928, the question of management succession has centered on which Bronfman will run the company. As Edgar Sr., 56, points out, ''Nobody comes to work here thinking they're in line to be chief executive.'' The older of Samuel's two sons, he took over from his father in 1971. Edgar Sr.'s choice of Edgar Jr. as successor, which has not previously been announced, settles the question for the next generation. The choice may surprise some. In addition to being young, Edgar Jr. has only a secondary school education, has spent most of his working life in show business, and had been at Seagram only three years when his father made up his mind. Seeking assessments of Edgar Jr., FORTUNE interviewed Seagram insiders as well as former employees, independent liquor distributors, and competitors. Few have anything to gain by criticizing the future chief of one of the world's largest distillers. Even so, their comments, on and off the record, were remarkably uniform and favorable. When he became the crown prince, Edgar Jr. had been running the House of Seagram, the company's core distilling and marketing business, for less than a year. But he had been busy. Just weeks before his father's decision, Edgar Jr. launched a massive restructuring of the House of Seagram that sheared 94 people from a 646-person payroll. He also started pruning independent distributorships, saying he would do business only with distributors who ''treat Seagram brands importantly.'' In the months following, Edgar Jr. took on the three major television networks, lambasting them in speeches and in print for refusing to air Seagram spots pointing out that a shot of liquor contains the same amount of alcohol as a glass of wine or a can of beer. The networks accept ads for beer and wine, including such Seagram wines as Paul Masson and Taylor, but all have refused to run spirits commercials. He dumped four of his seven advertising agencies: ''We were spread too thin and weren't always getting their best,'' he explains. Off the job Edgar Jr. wrote the lyrics of ''Whisper in the Dark,'' an erotic song (''I want to hold your body next to mine/ I want to hurry love and take my time'') recently recorded by Dionne Warwick on her hit album Friends. It might have been more fitting if Edgar Jr. had also penned the words to the Edith Piaf standard ''Non, je ne regrette rien.'' ''I regret nothing'' is not far from Edgar's claim that ''I've done nothing I wish I hadn't done, and not < not done anything I wish I had.'' Or he might have written ''My Way.'' From his early teens, notes his father, ''he managed to avoid what he didn't want and get what he did. We sent him away to camp, and he made it clear that wasn't for him. Nor was he going away to prep school. Nor to college. And when he wanted something, he worked that out too.'' At 14, for example, Edgar Jr. was attending Collegiate School, an exclusive day school in New York City (Sam went to Deerfield Academy, a Massachusetts boarding school). Edgar Jr. managed to evade that year's summer camp and embark on a career, by way of a movie script he had found on his father's hall table. He took it away to read and then persuaded his father to do the same. As a result, Edgar Sr. invested about $450,000 in the project. That summer Edgar was not at camp but in England -- boarding for a while with actress Joan Collins -- working as a runner, teaboy, and all-round gofer on the set of the movie, called Melody. That was when he got the nickname his family and close friends still use: ''Efer.'' It was inspired by giant ''E for B'' (eggs for breakfast) ads that Britain's Egg Marketing Board plastered on billboards and buses, the E and B reminding colleagues of his initials. Just as the film got Edgar out of camp, so it got British producer David Puttnam out of the advertising business. Says Puttnam, who has since produced Chariots of Fire and The Killing Fields: ''My success is very largely due to Efer.'' The next year Edgar Jr. was back in London assisting the producer on another film and living with the Puttnams, ''washing dishes and idolized by our kids,'' says Puttnam. ''I wish the sons of our very rich families were like him. With very few exceptions, they're chinless wonders.'' At 17 Edgar produced his own film, The Blockhouse, financed by a London film investment company and starring Peter Sellers. It flopped. When college loomed, Edgar Jr. maneuvered again. ''He saw it as a waste of time,'' recalls Edgar Sr. That is one of the decisions Edgar Jr. has never regretted. Instead he pursued his show business career. His father's money opened doors to the stage, just as it had to movies. ''He never swung his weight around,'' recalls James Walsh, general manager of Soon, a rock opera in which Edgar Sr. held a stake and where Edgar Jr., again starting at the bottom, scampered as a gofer. The two worked together again in 1977 on the play Ladies at the Alamo. This time general manager Walsh went to work for Edgar Jr., who was an investor as well as the producer. ''He understood the numbers, got along with the artists,'' says Walsh. ''He could take the tough decisions, knowing that yes is not always the right answer.'' That ability was called on all too soon: Alamo got what Walsh calls ''some unkind notices,'' and Edgar Jr. closed the show. He notched up good reviews from his associates. ''A virtuoso performance,'' says the play's director, Frank Perry. Perry's respect for Bronfman dates from a scene some six years earlier when Edgar offered opinions on Doc, a Perry-directed movie. The film, a western shot in Spain, had been screened before a select audience at the senior Bronfman's Westchester County estate, just north of New York City. A polite patter of applause followed the film, but then young Edgar piped up. ''He gave me a detailed analysis of what worked and what didn't,'' Perry recalls. The critics, and apparently the moviegoing public, agreed with Edgar's view of what didn't work. Bronfman stayed in show business until 1982, producing movies and television programs that he financed with investors' money and his own. While working as executive producer of CBS's All Star Jazz Show he met his wife, Sherry Brewer. He had gone to coax Dionne Warwick, one of the show's stars, to prepare for a lip-sync. All he got was a single no. Back in the studio, he passed word that the beautiful black woman in Warwick's dressing room was not to leave the premises until they had been introduced. After living together for three years, the pair ''eloped,'' as Sam puts it, and got married in New Orleans. ''We didn't invite either of our families,'' recalls Edgar Jr. ''Why put everybody in a difficult position? It was clear our families would not be deeply happy.'' Edgar Sr. says: ''I was against the marriage. But my wife said, 'Don't be an a------. You wouldn't want him to marry anybody. Give them a cocktail party.' So I did.'' The couple live in Manhattan and have two children. Over those same years, Sam had been to college at Williams, where he majored in American civilization, and worked in the advertising sales department at Sports Illustrated (published by Time Inc., as is FORTUNE). He grabbed SEAGRAM HEIR KIDNAPPED headlines in 1975; the suspects were acquitted of kidnapping but jailed for extortion. In 1979 Sam told his father he wanted to join the company. He started with Seagram's California wine business, worked briefly in the spirits operation, and now is president of the fine-wine division, which owns and markets such famous brands as Mumm champagnes. ''I was never anxious for my offspring to get into the business,'' says Edgar Sr. ''I grew up knowing I had no choice.'' Nevertheless, Edgar Sr. approached Edgar Jr. in 1982 and invited him to join what he describes as ''a publicly held family business.'' Edgar Jr. had just finished producing The Border, a movie starring Jack Nicholson. As Edgar Jr. recalls, the invitation came in the small waiting room leading to his father's office. ''I told him I'd think it over,'' he says, and he flew back to California to discuss the offer with his wife and friends. ''I was certain Sherry would be absolutely against it. But she said I should do it.'' His friends were even franker: ''You're nuts if you don't.'' ''I also thought of my brother,'' he says. ''No family needs a fight, and certainly not this one.'' But Sam was supportive, he says, so Edgar Jr. called his father to say he was flying back to New York with his answer. ''I knew that's what you'd say. I knew it when you said you were flying back,'' said Edgar Sr., hearing Edgar Jr.'s reply. Responded the son: ''We've got some people-learning to do about each other. I'd certainly have flown back to say no. But I might have said yes over the telephone.'' THAT YES effectively blocks jobs at Seagram for Edgar Jr.'s two younger brothers, sister, and two half-sisters. ''There's an unwritten tradition around here that only two of any generation will work at the company,'' says Edgar Sr. His own younger brother, Charles, 54, is deputy chairman, while their two sisters found other work, one as an architect, the other in journalism and later with an art foundation that she established. The new employee's job was special assistant to Philip Beekman, Seagram's president and chief operating officer. Traditionally this had been a spot for young employees on the fast track, ''bright raw material, the kind of guy or girl who doesn't need a hot poker to keep them moving,'' says Beekman. The role afforded Edgar Jr. a fast overview of all Seagram operations, including planning, marketing, packaging, and an internal look at the wranglings of various committees. Edgar was, says Beekman, ''always very respectful, even when questioning my decisions.'' And question he often did. Three months later, Edgar made a pitch to Beekman to head European operations, a London-based job that was open. Says Beekman: ''I thought he could do it and told his father so.'' When Edgar Sr. asked Edgar Jr. if he was interested in the London job, his son's reply was succinct: ''I'd kill for it.'' Beekman, standing nearby, drily remarked, ''That won't be necessary.'' In his two years in Europe, Edgar Jr. oversaw the acquisition of two U.K. wine and spirits retail chains and a German winery. Sales increased 20% and profits 200%. Edgar Sr. admits to being ''quite chuffed'' -- pleased -- by his son's performance. As still happens, Edgar struck most of the people he met in Europe as a young man going on 50, far from stodgy but sound of judgment. He also was able to charm the potentially hostile, among them whisky makers, sherry importers, and members of ''the beerage'' -- the executives of companies that dominate not only Britain's beer industry but also spirits and wine. And he managed to buy a bit of good publicity. The famed Grand National steeplechase was financially imperiled, and the owner of the track where it is run threatened to sell. ''I couldn't believe it,'' recalls Bronfman. ''With only four days to go, nobody was coming forward with the money to save it.'' He contacted a member of the blue-blooded Jockey Club offering to put up $500,000. The member relayed the offer to the track owner, who wanted $100,000 more. Bronfman agreed and, as a result, was presented to the Queen Mother -- ''an expensive introduction,'' he notes. Edgar Jr. lobbied to run the House of Seagram for a year before getting the job. Back in the U.S., he traveled and met with salespeople and distributors, pondering how to reshape the operation. ''It was no secret that our marketplace had changed,'' Edgar Jr. recalls. ''Spirits had declined'' -- Seagram was losing ground to the rest of the industry -- ''and wines were leveling. We had to do something different from what we'd done in the past.'' Neither his father nor Beekman told him what to do, he says, but they did want him to look at new ways of doing business. Part of that new thinking concerned the stigma of liquor. The liquor-wine- beer equivalency campaign was on the drawing board before Edgar Jr. returned. He has pushed it hard. Edgar Sr. says it is ''unfortunate'' that his father advertised the need for moderation in liquor consumption. ''Beer is the villain'' in most drunk-driving cases, the chairman says, a point that a number of university studies back up. EDGAR JR. decided to reshuffle the divisions selling liquor to eliminate in- house competition between brands -- Chivas Regal scotch vs. Glenlivet, for example. Once he had his numbers and personnel changes mitered together, he took his proposal to his father. ''I gave him a 95%,'' says Edgar Sr. ''That's as high as I go.'' Edgar Jr. set January 15, 1985, a Tuesday, as the day to announce his changes. The Seagram Building in New York is not the best place to keep secrets. ''Usually it's Radio Free Seagram around here, which can be a liability,'' says Stephen Herbits, vice president for corporate development. Even so, Edgar Jr. managed to keep Project Alpha, as the reorganization was dubbed, under tight wraps until the moment it was launched. What gossip there was swirled around rumors of a major acquisition. The preceding Friday, young Edgar telephoned four key people, asking them to be in New York and at their desks on Tuesday. Bronfman then summoned them individually, speaking to one while the next waited in an anteroom, shunting and promoting according to his plan. ''Totally Machiavellian, totally Sicilian,'' says Jerome Mann, president of Seagram Wine Co. and, as he might put it, one of Edgar Jr.'s consiglieri during the planning. ''A good day for me,'' notes Martin Bart, who was promoted. ''But I know that one day there may be a knock on my door and I'll be told, 'It's been fun but now it's all over.' And I know it'll be Edgar Jr. who will do the telling.'' When the reorganization news hit the press, many distributors felt the chill of a threatened loss of profitable business. Today, both Edgars wonder whether it couldn't have been handled differently, since many distributors worried needlessly while others have sued. Some Seagram insiders say Edgar Jr. can be chillingly abrupt when his decisions are questioned. ''I suppose you always can find something better in the way you do things,'' observes Edgar Jr. ''But any mistakes that I've made I think have been executional in nature, not fundamental.'' If his father's succession plans hold, Edgar Jr. will find himself running one of the world's largest industrial corporations, possibly before he is 40. More than running it, he will command it, for the Bronfman family controls 38.5% of Seagram's stock. Edgar Jr. stands to play a role in the chemical business as well, since Seagram owns 22.6% of Du Pont (an investment that hurt Seagram's 1985 profits). He will also head one of the world's larger family fortunes; the Bronfmans' Seagram stock is worth more than $1.5 billion. The prospect of such responsibilities could carry an element of worry for a man of 30. Edgar Jr. does not seem weighed down. Asked recently what it is like to be a Bronfman, he laughed and replied, ''It's absolutely terrific. I thoroughly recommend it.'' BOX: INVESTOR'S SNAPSHOT Text not available.