(FORTUNE Magazine) – EDGAR BRONFMAN JR. says he doesn't enjoy the gaming tables. But seven months after Seagram Co. acquired an 80% stake in MCA, the scion of the legendary liquor family found himself in Las Vegas anyway, giving his first keynote address to a huge entertainment industry audience. The speech he delivered, by most accounts a success, was laden with a charm, an earnestness, and a naivete unusual for Hollywood, much less for MCA, an austere place run for half a century by Lew Wasserman, a shrewd taskmaster who befriended Presidents and once hosted a Pope.

If nothing else, the handsome young CEO's speech made it absolutely clear that Seagram's $5.7 billion purchase ended the 49-year reign of Wasserman as CEO. What's not yet equally clear: How does the company rebound from the recent paralytic five years it suffered under the ownership of Matsushita Electric Industrial Co.?

Bronfman, in what seemed to be his vision statement, spoke to the Vegas crowd of his desire to "unlock and unleash the talents of so many individuals at MCA waiting for the opportunity to contribute." A part-time songwriter and former film producer, he vowed to get better results by making the company "talent friendly." No one's heard a "suit" schmooze talent this way since the passing of the late Steve Ross.

Did this event mark the dawn of a new era at MCA--kinder, gentler, perhaps even more profitable? Well, maybe. But the jaded in this business have seen smooth strangers with deep pockets come to town before--Coca-Cola and Sony come to mind--only to have Hollywood hand them their heads. So, to some industry insiders, Bronfman's odds might improve if he turned to the casino tables.

Of more interest to them is...what to make of this songwriter-turned-tycoon? This is a crowd accustomed to relentless bosses like Rupert Murdoch, Barry Diller, Michael Eisner--or Lew Wasserman and Sid Sheinberg, to name two closer to home. The Bronfman they'd more likely identify with was Samuel, the cutthroat, hot-tempered patriarch of the family--not Edgar Jr., a man described as "soulful" by one of his own executives, and one who turned to business only after nine desultory years trying his hand at the arts and producing two films that bombed.

It's also an audience that knows the answer to the question What, exactly, has Edgar Bronfman bought for his $5.7 billion? Simply this: a good but somewhat isolated entertainment company, without one top-ranked business--whether in recorded music or motion pictures or TV or publishing or recreation (see chart).

MCA is expensive, it's big, but it's also been eclipsed by mightier mergers among its competitors, and half a decade of ill-starred ownership by tightfisted Matsushita--years during which competitors like News Corp., Time Warner, and Disney surged ahead, building and buying distribution pipelines for their product around the world.

Bronfman, it seems, may not even be interested in that chase. Sitting in his temporary MCA office in Los Angeles one afternoon, he explains: "In my view, there may be sensible arrangements to make with others, but huge amounts of capital to own one captive distribution system and then fight it out with other distribution systems--I think that's someone else's fight."

That raises the question much on Hollywood's--if not Wall Street's--mind these days: Does Edgar actually have a plan for MCA--or even for Seagram? The parent company has yet to squeeze a respectable return out of an earlier billion-dollar-plus acquisition--Tropicana--after eight years of trying. Now Bronfman calls MCA a "turnaround" situation and says it will take three to five years to see results from his first big move as chief executive officer. (He was named CEO in June of 1994, after five years as chief operating officer.)

Seagram can afford long-term gambles--thanks to a strong balance sheet and the Bronfmans' 32% controlling stake--but investors have yet to hear Bronfman articulate a strategy to lift MCA out of Hollywood's second tier. Or to define his own role at MCA. In another era or industry, the 40-year-old Seagram president might sort through these matters privately, but the twin spotlights of Left and East coasts are pinning him onstage. MCA sorely needs a business plan, and a CEO to implement it.

Bronfman has been filling in, but that's a stopgap. For one thing, he has his hands full just trying to live up to family tradition and expectations. Samuel Bronfman, the irascible founder of what became a huge oil, real estate, and whiskey dynasty, left a vast shadow that lurks to this day. He posed the challenge himself, in characteristic stark terms, when Edgar Jr. was still in elementary school: "Shirtsleeves to shirtsleeves in three generations. I'm worried about the third generation. Empires have come and gone."

Most heirs might try to confine such ancestral musings to the attic. But Edgar Jr. displays that very comment in a discreet nook of his Manhattan office overlooking Park Avenue--along with a photograph of the baleful old gentleman glaring out over a hand of solitaire and a glass of whiskey.

So there's a legacy here, and a powerful one at that. Which helps explain why Edgar Jr. hasn't forsaken his deep allegiance to the far-flung beverage business. Between that and family life in Manhattan, he says, he cannot move to California. After he failed to hire former Creative Artists Agency chairman Michael Ovitz for the job, he appeared reluctant to name a CEO at MCA. Instead, he opted to hire Ron Meyer, Ovitz's deputy, as MCA president and COO. Meyer--a likable talent agent with no prior corporate experience--appears surprised by the enormousness of the task, and Bronfman himself is taxed by the cross-country commuting. "He's killing himself," says Bob Matschullat, Seagram's vice chairman and CFO.

Now Bronfman appears poised to hire yet another professional nice guy, Frank Biondi Jr., as MCA's chief executive. Biondi, 51, is a well-liked entertainment executive with a grasp of finance who makes no pretense of picking scripts. At MCA he won't even pick the executive team--because Meyer and Bronfman already have, putting some untested executives in key operating and staff jobs. (Bronfman says he wouldn't install even a CEO to whom Meyer objects.)

Biondi's hands-off management was found wanting by Viacom Chairman Sumner Redstone, who fired him early this year after nine years as CEO. Says a high-level Hollywood veteran who has dealt with Biondi for nearly 20 years at three different companies: "Frank's problem--and it's been career long--is that he has a tremendous faculty in analyzing deals, wooing and schmoozing Wall Street, and playing politics very well in high towers, but getting strategies executed where the rubber meets the road escapes him. And that was, in the end, where Sumner found the flaw." For his part, Redstone has been slow to release Biondi from a non-compete clause.

IF SEAGRAM shareholders feel some trepidation, history would suggest they're entitled. Call it coincidence, but in the past seven years, the stock prices of five giant firms that have acquired large studios have slid.

Seagram's stock price tumbled last April after word of the MCA bid leaked. To raise cash, the beverage company sold most of its 24% stake in Du Pont, and shareholders who preferred Du Pont dividends to Hollywood futures dumped their stock. Since then, however, the Hollywood acquisition has added sizzle, attracting investors who are willing to overlook persistent problems in Seagram's core spirits and wine business, where operating income growth has stalled since 1992 despite a goal of double-digit cash flow growth. Amid the euphoria over MCA, Seagram took a $290 million "reengineering" charge in the third quarter, nearly all of it in spirits and wine. In the fourth quarter, cash flow dropped 16% for spirits and wine, and at MCA, cash flow fell 18%. Seagram explained that it was running against a record year, and also spending big bucks on new artists.

Seagram scuttled one analysts' meeting last fall and now says it won't host another until September. That cancellation "made them look bush league," says an analyst who has delayed a recommendation in part because he thinks Seagram hasn't figured out what to do.

It's not that Bronfman has done nothing. He has purchased 50% of Interscope Records (vowing to eschew its controversial gangsta rap business), and he has okayed two theme parks initiated under MCA's prior regime. In partnership with the Rank Organisation, MCA has begun the $2 billion construction of a new park for Universal City, Florida. In 2001, a $1.6 billion theme park is scheduled to open in Osaka. Bronfman also reached agreement with DreamWorks, the studio founded by Steven Spielberg, David Geffen, and Jeffrey Katzenberg. This could count; for 20 years Spielberg has provided MCA with some of its best "branded" products--Jaws, E.T., and Jurassic Park.

The new agreement assures MCA of the right to use DreamWorks characters in its theme parks and to collect some fees for distributing DreamWorks movies abroad, as well as its music and videos worldwide. Perhaps even more important in the short run: Spielberg has agreed to direct a Jurassic Park sequel for Universal this fall.

Fine. But Bronfman still doesn't know the business. He displayed some naivete in his Las Vegas speech to the National Association of Television Program Executives. "If we could do no more than bring MCA's profit performance up to industry norms, we could double the value of the company," he declared. What norms? When asked to define norms for TV, music, publishing, and recreation, neither Bronfman nor Matschullat--the new CFO who just came from Wall Street--has ready answers. Bronfman says the average operating margin for the film business is 10%; veteran entertainment analyst Harold Vogel of Cowen & Co. puts the number between zero and 5%. In Vogel's view, "You get your big return when the [film] library gets taken over."

That could be depressing news for Seagram shareholders; they're still waiting for their payback from Bronfman's 1988 purchase of Tropicana for $1.2 billion. Tropicana ranks second only to Coca-Cola in total fruit beverage volume, but operating margins are stuck at the 6% to 7% range. Says Martin Romm, beverage analyst at CS First Boston: "Until they start to demonstrate that they can generate for shareholders an adequate rate of return, you have to consider this an acquisition that remains very much on hold." Meanwhile, Romm gives Bronfman better marks for his $820 million Martell cognac acquisition, because it was a tactical bid for market share in Asia, where cognac is popular.

Bronfman seems to know that inevitably he'll be compared with the older men who run competitive companies, and to his own grandfather, father, and uncle, who built and expanded Seagram's fortunes.

"He's got something to prove. He went out on a limb with his family to do this," says one businessman who has met with Bronfman several times to discuss MCA.

For all the family legacy, Edgar isn't the first Bronfman to hear the siren call of Hollywood. His father, Edgar Sr., was still chief executive in 1993 when Seagram began accumulating shares of Time Warner, one of the biggest players in the business (and owner of FORTUNE's parent). Seagram ultimately invested $2.17 billion for a 14.9% stake, which it still holds (see box). Nearly 30 years earlier, Edgar Sr. had dabbled in Hollywood, first with a stake in Paramount, then with a big block in Metro-Goldwyn-Mayer.

By several accounts, Samuel, the family patriarch, heartily disapproved. In an anecdote recorded by Peter C. Newman, author of King of the Castle, the Making of a Dynasty: Seagram's and the Bronfman Empire, Samuel said: "Tell me, Edgar, are we buying all this stock in M-G-M just so you can get laid?"

" 'Oh, no, Pop,' " Newman says, "was Edgar's classic reply. 'It doesn't cost 40 million to get laid.' "

The son of Russian Jews who immigrated to Canada, Samuel Bronfman made his fortune as a distiller supplying U.S. bootleggers during Prohibition; he acquired Seagram in 1928. ("Of course we knew where it went," he told FORTUNE in 1966, "but we had no legal proof. And I never went on the other side of the border to count the empty Seagram's bottles.")

B all accounts, "Mr. Sam" was a demanding, hot-tempered patriarch ("I don't get ulcers, I give ulcers," another biographer recorded him as saying). He bullied a younger brother, Allan, who was his right-hand man, and barred Allan's sons, Edward and Peter, from Seagram, ultimately buying out their shares to secure control for his direct heirs. Sam's elder son, Edgar, moved to New York to supervise the American operation, while the younger son, Charles, stayed in Montreal to run the Canadian business.

The second generation ultimately proved its mettle not in show business but with real estate and oil investments that became a bonanza. Edgar Sr. and Charles persuaded their father to hire Leo Kolber, an ambitious Montreal lawyer, to manage their "Cemp" family trust fund. Its real estate unit, through mergers, became part of the giant Cadillac Fairview Corp., which the Bronfmans controlled until its 1987 sale to JMB Realty Corp. for $2 billion.

Seagram diversified with a U.S. oil investment in 1953, the year of Edgar Sr.'s marriage to Ann Loeb, daughter of a prominent New York banking family immortalized in Stephen Birmingham's "Our Crowd." When the U.S. oil and gas properties were sold in 1980, they fetched $2.3 billion--$2 billion of it profit--and provided a war chest for Seagram to bid for Conoco a year later.

Du Pont arose as a white knight, and Seagram ended up with a chunk of Du Pont instead. In the fiscal year ended January 31, 1995, its dividends from Du Pont came to $299 million.

That's a handsome return--gold-plated, by some measures--but Bronfman began chafing to move into a venture he could control. Less than a year into his reign as CEO, he sold 95% of the Du Pont stake for $8.8 billion and took control of MCA. For a progeny not even tagged as the third generation's crown prince at the time Mr. Sam died in 1971, it was a bold move.

Edgar's rise has been unorthodox. While his elder brother, Sam, went to prep school and Williams College, Edgar Jr. stayed in Manhattan, where he was smitten with Broadway. "He was always sitting around with his feet up, reading Variety," recalls Jonathan Becker, a classmate at the Collegiate School. "We all had our own serious pretensions, and Edgar was not an exception. He was completely into the theater." After his 1973 graduation, Edgar Jr. skipped college to write songs and produce plays. By the time he was 20, he'd co-produced an obscure film, The Blockhouse, starring Peter Sellers, and his first and only TV show: an afternoon special for CBS memorably titled The Original Rompin' Stompin' Hot and Heavy Cool and Groovy All Star Jazz Show.

In 1979, Edgar Jr. bucked his father's objections to marry a black actress and model, Sherry Brewer, with whom he had three children. In Hollywood, he co-produced his first and only film for a major distributor. But even with Jack Nicholson as its star, The Border bombed, pulling in only $6 million. Later that year Edgar Jr. accepted his father's invitation to join Seagram.

He was 26 years old.

He worked three months as the president's assistant, then asked for--and got--the top London job, overseeing Seagram's European operations. "To me he was a...kid," recalls Ed McDonnell, the Seagram executive who oversaw international operations from New York. But McDonnell was soon won over by Edgar Jr.'s ability to "listen, learn, act." The unprofitable operation was turned around after Edgar Jr. "started buying must-have type brands, [and] improving our distribution," McDonnell says. His best deal: the German sparkling-wine maker Matheus Muller.

Upon his return to New York in 1984, he was promoted to run the U.S. spirits business. Looking back, his elder brother, Sam, says, "It very quickly became clear to both of us where this was going to end. We worked it out." Still, it was a shock to Sam when his father announced the decision in a 1986 interview. "I was chagrined about how I was told, in Fortune magazine," says Sam, who is now president of the Seagram Classics Wine Co. in San Mateo, California. "It is a wound that has long since healed."

"Quality" and "family" were the bywords passed down, says Sam. According to a 1991 biography by Michael R. Marrus, the patriarch once declared that it was his sons' destiny to become "merchant princes."

As befitting a prince, Bronfman the grandson lives and works with a certain flourish. During his London stint, he pledged $600,000 to the imperiled Grand National steeplechase, winning Seagram favorable publicity and an introduction to the Queen Mother for himself. Then there was his courtship of Clarissa Alcock, a stunning Venezuelan, after his marriage to Sherry Brewer ended. For a year Edgar Jr. sent three dozen roses each day to Clarissa's office in Caracas. He'd fly to Venezuela for weekend visits. For a country home, he bought the old Lowell Thomas estate in New York's Dutchess County once owned by filmmaker Dino De Laurentiis. Now that he and Clarissa are married, they're meeting with contractors to redo a townhouse on Manhattan's East Side. Tall and slender, they make a striking couple: paparazzi often catch Clarissa in a Herve Leger "bandage dress."

The dress may look revealing on Clarissa, but it actually tells more about Bronfman, who admired the unique style on another woman at a Caracas party, then tracked down the designer to a one-room operation in Paris. Edgar Jr. had intended to buy a single dress for his wife, but wound up buying a 50% stake in the fashion designer's business. He made the investment with Seagram money, he says, because he used a half-day of company time and figured the company, not he, should reap any profits. (Three years later sales are up tenfold; the target year for profits is 1999.)

With the same impulsive confidence in his instincts, the Seagram chief executive has been recruiting some key executives for MCA. One month after his protracted effort to hire Michael Ovitz as MCA chairman, Bronfman offered the MCA presidency to CAA's Ron Meyer over dinner at his Manhattan townhouse. "I was dazzled by Edgar," says the 51-year-old Meyer. "At the end of that evening I realized that I wanted to ride off into the sunset." The deal was sealed in less than a week.

On the surface the two men have little in common--other than the lack of a college education and a love of Hollywood. Meyer was a tough Los Angeles youth who had brushes with the law: "fighting, vandalism, stupid things that kids do--you know, petty-theft problems, other dumb kid stuff," he says evenly. He dropped out of high school to join the Marine Corps. There, Meyer says, he realized, "I wanted to be a citizen. I wanted to be someone that was going to be a productive member of society." Upon his return to Los Angeles, he cleaned duplicator machines before he found work as an agent's errand boy. Five years later he joined the William Morris Agency's television department; he left to co-found CAA in 1975. There he became a premier movie agent, representing such stars as Sly Stallone and Demi Moore.

Meyer has joined Bronfman's campaign to make MCA less formidable. Inside the "Black Tower," reviled by many newcomers as a cold symbol of MCA's past, the top executive floors are being remodeled. Casual attire is permitted and even encouraged, although Meyer often tucks in his pullover sweaters. At lunchtime the new MCA president takes a random table in the commissary, pointedly avoiding the back-wall tables where top MCA brass used to dine in coats and ties.

(Wasserman, who turned 83 on March 15, still lunches at his old table. He accepted a Seagram invitation to join its board, and he has kept his office in the Tower, which the Bronfmans renamed for him as a tribute. It's painful to some Wasserman friends to see him linger. They winced at the jocular words of Bronfman Sr. at a December tribute to Wasserman on a sound stage. "Efer!" he exclaimed, using Edgar Jr.'s teen nickname. "What are all these people doing in our room?")

Gordon Crawford, the influential money manager at Capital Research & Management Co. (a unit of Capital Group), which owns 5.1% of Seagram, gives Bronfman high marks at MCA. "I think he's put together a great young team on balance," Crawford says. "They've definitely changed the company culture. It's reenergized."

That's clear, but Hollywood cynics wonder if all this amiability translates to gullibility. Barry Diller, former chairman of Paramount and Fox, who befriended Bronfman nearly 20 years ago, thinks not: "No one should ever mistake Ron Meyer's friendliness and desire to please for weakness. He is one quietly tough customer."

Like Bronfman, Meyer makes hires that confound Hollywood insiders. He hired a friend, celebrity trial lawyer Howard Weitzman, to become executive VP of corporate operations. Weitzman then recruited a former law partner to serve as general counsel. Meyer also hired Sandy Climan, a former CAA colleague, to oversee consumer products, pay TV, home video, and emerging technologies. Rounding out the top staff is Bruce Hack, a 14-year Seagram veteran who was dispatched from New York to serve as MCA's chief financial officer.

To shake up the music division, Bronfman personally recruited former Warner Music executive Doug Morris, who built a successful business in rock & roll and other genres for Atlantic Records but has virtually no track record as head of a corporate division. (He was fired just eight months into his job as head of Warner's U.S. music group.)

Bronfman and Morris were introduced by Bruce Roberts, Bronfman's oldest friend and songwriting partner. Over lunch at the Four Seasons restaurant in the Seagram Building, they chatted about Roberts's Intimacy album on the Atlantic label. Signing his work as "Junior Miles," Bronfman had contributed lyrics for the title song and two others. Recalling that lunch, Morris says, "There was kind of a soulful demeanor about him that I liked."

The day Morris was fired, he got a call from Bronfman, who urged him to see The Shawshank Redemption, a film in which one prisoner escapes to a Mexican beach town, then awaits the arrival of a buddy left inside. When a puzzled Morris asked why, he says Bronfman replied, " 'Well, Doug, because when you see the movie, I want you to know that I'm the guy waiting on the beach for you.' "

Bronfman has told record industry executives he intends to make MCA the market leader. He has a way to go. In 1995 sixth-ranked MCA claimed 9.7% of the market, far behind top-ranked Time Warner's 21.6%, according to Soundscan, a data-tracking company.

MCA has some catching up to do in TV as well. MCA was the leading supplier and syndicator of TV series as recently as 1984, when Murder, She Wrote first aired, but it has been overtaken. When the 1995 fall season began, Warner Bros. led the industry with 13 hours in production, more than twice those of MCA.

MCA is the only giant studio other than Sony that has no stake in a broadcast network. Wasserman and Sheinberg saw the handwriting on the wall in 1994, when it became clear that federal rules would soon permit the mergers of studios and networks. The two MCA executives flew to Osaka with a proposal to bid for CBS in partnership with ITT Corp., but their Matsushita bosses refused to even grant an audience. Seething, Sheinberg and Wasserman declared they would not renew their contracts unless they were granted full autonomy. Matsushita hired advisers, ultimately paving the way for Seagram's bid.

With no network, MCA needs a platform to launch its television shows, just as it does its movies and records, before it can even pursue those much hyped "global" opportunities.

"Like anything else, you need a real strategy for television," observes Diller, who launched the successful Fox Network and is now chairman of Silver King Communications. "They have not yet made that decision . I don't think you can find a strategy by just playing the television business."

Sheinberg is blunter: "I don't think you can exist as a stand-alone supplier." With the growth of cable television, there is the chance that MCA can improve its distribution through its 50%-owned USA Networks--but it must do so with that sometimes difficult partner, Viacom.

These problems fall to new MCA Television Group Chairman R. Gregory Meidel, a well-liked salesman who persuaded Bronfman to come to Las Vegas for the convention of programming executives. After Bronfman gave his keynote speech, Meidel led the Seagram CEO and Meyer on a tour of the exhibit booths, where talk shows and game shows and TV reruns are hawked to buyers from around the world.

Bronfman, a tad self-conscious, observed that the MCA booth "needs more branding" and chatted with the tall, costumed stars of TV hits Hercules: The Legendary Journeys and Xena: Warrior Princess. But displeasure crossed his face at the hospitality bar, where whiskey from a Seagram competitor was inexplicably displayed. Turning to a hapless MCA executive, he ordered its removal. The offending bottle was whisked from sight. For that brief moment, the Seagram chief knew, exactly and unequivocally, what to do.