Packer Group

Overview

This profile consider the Packer family and its media interests.

It covers -

• introduction
• the group
• history
• studies

Introduction

The Packer empire, one of the defining forces in Australian media politics, embraces television (the leading Nine Network and 25% of Foxtel), property, publishing (eg Bulletin and Womans Weekly), gambling (eg Crown and Burswood casinos) and other holdings.

The group

An overview of Packer interests as at October 2001 is here. It covers public companies - in particular Publishing & Broadcasting Ltd (PBL) - and some private holdings, some controlled by the unlisted Consolidated Press Holdings (CPH).

Overall the family controls the Nine television network (owns & operates three capital city and one regional station, with two capital city and five regional affiliates), magazine publishing, gambling, cinema and other holdings.

History

The group dates from the 1920s, when newspaper manager Robert Packer was given a stake in James Joynton Smith's Smith's Weekly. Robert managed Smith's Daily Guardian and Sunday Guardian, subsequently serving as chief executive of the Sydney Associated Newspapers group.

His son Frank (1906-1974) established the Australian Womens Weekly and in partnership with 'Red Ted' Theodore - the former federal treasurer - later acquired the Daily Telegraph. During the thirties and forties the Packers expanded their publishing interests, with great success, and later moved into television.

Kerry Packer (1937-2005), Robert's grandson, made unsuccessful but lucrative bids for the Fairfax group, Westpac bank, UK conglomerate BAT and other companies. He survived a 'near death experience' and allegations of questionable tax practice, sold the Nine television Sydney and Melbourne stations to Alan Bond for $855 million (and gained the Nine Brisbane, Sydney and Melbourne stations in 1990 when Bond Media failed to pay $200 million preference shares), gained a 25% share in dominant cable tv network Foxtel, bought and sold large chemical interests (resulting in 7% of the equity of the global Huntsman chemicals group as of early 2003), and acquired control of Crown casino and Hoyts cinema group.

Subsequent investments were less successful, with embarrassment over underperformance by the ecorp new media arm and problems with the One.Tel holding ($375 million investment in an Australian mobile phone group that at its peak in 1999 had a market value of $5.3 billion but collapsed in 2001). Hyperbole about the Packer 'midas touch' was undermined by losses relating to property development with Western Australian entrepreneur Warren Anderson (down an estimated $200 million on the high profile Westralia Square project) and 10% of Indian telecommunications group Himachal Futuristic (estimated $396 million investment).

In 1997 Packer interests sold a stake in Village Roadshow for $100 million and in the following year took a major stake in Hoyts cinemas. Hoyts was delisted by Packer in 1999 for an aggregate $750 million. At that time it was the tenth largest cinema chain in the world with 1,541 screens, including 183 in Australia and 965 in the US. Hoyts operations in Germany, Poland and the UK were sold for $70 million. Hoyts' Mexican operations went for $130 million; sale of its US arm brought in several hundred million. The family took a substantial stake in KVP Ventures, claimed as the largest VC fund in India when announced in 2000 but apparently unwound in 2001. eCorp (formerly PBL Online) was floated in 1999 and privatised in 2003.

In January 2003 CPH Investments (in which the family had a 30% stake) announced plans to merge with Challenger International (in which the Packers had a 19%) stake to become one of the 150 largest companies listed on the Australian Stock Exchange. A month later CPH sold most of the Hoyts America cinemas (900 screens, around 102 locations) to US-based Regal Entertainment, in which it gained a 5% stake. CPH retained Hoyts Australia (43 cinemas in Australia), Hoyts New Zealand and minor cinema operations in South America.

During the same year PBL paid $33 million for a 25% interest in Seek.com online recruitment agency and acquired 15.75% stake of Burswood casino for $77.3 million, moving to control in July 2004. Challenger paid $187 million for assets held by Zurich Capital Markets, including wholesale mortgage financier Interstar and 84,500 hectares of forests, after selling a 2.3% stake in Puma sportswear for a $32 million profit.

In December 2004 CPH announced the sale of Hoyts to its publicly-listed subsidiary PBL and West Australian Newspapers Holdings (WAN). That sale was expected to increase the family's stake in PBL to 39.1% from 37.4%. Hoyts operates 377 cinema screens in 47 complexes (accounting for 23% of the Australian market and 16% in New Zealand), an independent film distribution business and Val Morgan Cinema Advertising, with an enterprise value of $520 million.

In October 2006 PBL annnounced plans to transfer its media interests to a new company, PBL Media, a joint venture with CVC Asia Pacific. PBL would receive net cash proceeds of $4.542 billion. The media interests included ACP Magazines, the Nine Network (including its stake in Sky News), its 50% interest in ninemsn and 41% stake in carsales.com.au. The move anticipated changes to Australia's media ownership reime, with new legislation expected to pass in 2006.

Studies

There are surprisingly few books about the Packers. The best is probably Paul Barry's The Rise & Rise of Kerry Packer (Sydney: Bantam 1993), a penetrating study of the man and empire. Barry's Rich Kids (Sydney: Bantam 2002) covers the One.Tel debacle.

For an academic treatment we recommend Bridget Griffen-Foley's Sir Frank Packer: The Young Master (Sydney: Collins 2000) and The House of Packer: The Making Of An Empire (St Leonards: Allen & Unwin 1999).

They supersede R S Whitington's Sir Frank: The Frank Packer Story (Melbourne: Cassell 1971), which provoked Richard Walsh's comment

"The life of Sir Frank Packer - though this present hagiography almost disguises the fact - is that of a larrikin who almost all his life has had the kind of money to indulge himself to the full. He is brutal in his treatment of those who cross him and power-hungry in his dealings and manipulations of men and events. Of course, as Sir Robert (Menzies) thoughtfully avers, such faults are masculine. But so presumably were Hitler's."

Ross Fitzgerald's Red Ted: The Life of E G Theodore (St Lucia: Uni of Qld Press 1994) offers a nuanced portrait of the empire's early days and Sir Frank's partner Ted Theodore, the former Qld Premier and proto-Keynesian federal Treasurer.

Other perspectives are offered in the major biographies of Rupert Murdoch (we recommend George Munster's A Paper Prince over William Shawcross' Murdoch) and Gavin Souter's two studies of the Fairfax's Sydney Morning Herald (SMH) group - Company of Heralds and Heralds & Angels (Melbourne: Melbourne Uni Press 1981 and 1991).

Stone's Compulsive Viewing: Inside Packer's Nine Network (Melbourne: Viking 2000) is a 60 Minutes flavoured account - colour, action, a fascination with the big fella and legal stoushes - of the leading commercial network. Sandra Hall's Turning on Turning Off: Australian Television in the Eighties (North Ryde: Cassell 1986) has bite.

Henry Blofeld's The Packer Affair (London: Collins 1978) and Christopher Forsyth's The Great Cricket Hijack (Melbourne: Widescope 1978) deal with the World Series Cricket imbroglio.

For broadcasting policy consult Trevor Barr's incisive Newmedia.com.au: The Changing Face of Australia's Media & Communications (St Leonards: Allen & Unwin 2000) and the blow by blow account in The Gatekeepers: The Global Media Battle to control Australia's Pay TV (Annandale: Pluto Press 2000) by Mark Westfield.

The latter might be supplemented by the drier account in Cento Veljanovski's 72 page IPA paper (PDF) on Pay TV in Australia: Markets & Mergers and Fred Brenchley's sympathetic Allan Fels: A Portrait of Power (Milton: Wiley 2003). We have highlighted telecommunications and Australian pay-tv conundrums in a special profile on the Caslon site.

For the Packer newspapers see RB Walker's Yesterday's News: A History of the Newspaper Press in New South Wales from 1920 to 1945 (Sydney: Sydney Uni Press 1980) and Patrick Buckridge's The Scandalous Penton: A Biography of Brian Penton (St Lucia: Uni of Queensland Press 1994).

The outstanding history of the early Bulletin is The Archibald Paradox, A strange case of authorship (Ringwood: Allen Lane 1983) by Sylvia Lawson. For the later period there's an account in Patricia Rolfe's The Journalistic Javelin: An illustrated history of the Bulletin (Sydney: Wildcat Press 1979). There's a broader perspective in The Way We Were: Australian Popular Magazines, 1856 to 1969 (Melbourne: Oxford Uni Press 1983) by Vane Lindesay.

For the Weekly see Denis O'Brien's The Weekly: A lively and nostalgic celebration of Australia through 50 years of its most popular magazine (Ringwood: Penguin 1982).