2 years after selling PBL, Aussie buys stake in Ten
SYDNEY — James Packer has made a sudden return to the media sector he recently rejected with a $A245 million ($237 million) raid on free-to-air web Ten Network.Packer now has a 15% stake in the web, which has been ripe for the picking since its majority shareholder, Canada’s CanWest, was forced to sell its stake after taking a big hit in the financial crisis. But the move into free-to-air TV is a surprise from a man who has steadily been moving away from the media empire built by his late father, Kerry. The Ten raid comes almost two years after Packer sold PBL Media — which contained most of his media interests including the Nine Network and 50% of online portal Ninemsn — to private equity group CVC Asia Pacific. He later resigned from the board of Nine, selling his stake down to less than 1%. Packer Sr. had an emotional attachment to free-to-air TV, something his son seemed not to inherit. He favored the company’s gaming interests, so the move begs the question why? Deutsche Bank media analyst Andrew Anagnostellis said Packer’s motives were still unclear but that Ten, which recently had a runaway hit with “MasterChef Australia,” was an interesting choice as the outlook for the group is mixed. “Key upside risks include a stronger recovery in advertising or ratings, further government assistance and lower programming costs,” he said. “But the downside for the group is that the introduction of Ten’s new digital channel and repositioning of the primary channel may result in the loss or cannibalization of viewers.” Aussie media laws recently changed to allow free-to-air webs to launch digital channels and Ten has pacted with CBS to launch a channel called Eleven in the new year, showcasing the Eye’s content. One media asset Packer has retained is a 25% stake in paybox Foxtel through his Consolidated Media investment group, and he may be looking for synergies between feevee and the expanding free-to-air webs. But this Foxtel stake could cause problems with government approval should he take a controlling stake in Ten. A full tilt at Ten would cost Packer about $1.5 billion, but for now the industry will have to wait to see what the born-again media baron does next.