Packer conglom looks to future
What next for Australia’s Publishing & Broadcasting Ltd. now that James Packer has inherited the media conglom from his father, Kerry, who died Monday?
It is widely believed that Packer fils does not have the same love of the TV and magazine division as did his father, and with good cause.
At company’s recent results meeting, the TV division reported earnings of $205.2 million, down $7.6 million from the previous year, while the gaming division performed well.
P&BL immediately began to restructure its flagship terrestrial web Nine, cutting costs and staff, which many saw as a precursor to jettisoning the network. But such talk is premature.
“I don’t think that selling Nine will be a high priority,” said Craig Shepherd, broker at Commonwealth Securities. “It is the nature of the biz that it has a strong Internet presence with Ninemsn.com.au (a joint venture with Microsoft), and it is the quality of these assets that will govern its performance.”
Packer is seen to have inherited his father’s tough business acumen. He wants to expand the company rapidly, but whether in gaming, media or elsewhere is unknown.
One concern still follows the heir to the throne: his loss of millions of dollars from his investment in fledgling telco One.Tel.
One.Tel went into bankruptcy in May 2001, and Oz’s corporate watchdog is suing its former directors for $67 million in damages.
Packer was cross-examined for 10 days on this investment and the failure was seen as an embarrassment, with fellow media heir Lachlan Murdoch testifying at one point that the younger Packer cried when he heard of the loss.
But the court case also showed James Packer’s steely side. When questioned about his father’s personal fortune in Consolidated Press Holding, he responded coolly: “I consider CPH mine. It’s not mine at the moment, but it one day will be mine.”
That day has come, and while Packer has experienced execs like John Alexander and Nine Network topper Sam Chisholm in place, his first test will come soon.
His father’s last act as chairman of the media conglom was to make a Christmas Eve bid of $567 million for broadcast rights to the hotly contested Australian Football League — one of the most watched sports on TV.
But Kerry Stokes’ Seven Network — in a consortium with the Ten Network — has a first-and-last rights agreement with the AFL, meaning all the consortium needs to do is match Nine’s offer to win the five-year contract, which kicks off in 2007.
The Christmas Eve timing of the bid was pure Kerry Packer, knowing Stokes’ group had only 14 days to match his bid.
But Stokes is likely to step up to the challenge within days, leaving the next move up to James Packer.