Surprise, surprise, James Packer outed in the weekend press, thanks to
an interview with the West Australian’s Mark Drummond. A few point
Casinos are in, James Packer is King and everyone else at PBL had
better understand it. Out are media and all the odds and sods of the
group, although they are nice to have and hold, the gambling machine
built on Crown, and about to swallow Burswood, is clearly the way the
PBL chairman wants to see his company grow. Fairfax is out, and underperforming.
Saturday’s West Australian ran an exclusive interview with James Packer: Packer eyes on more WA gold
It was a good yarn by Mark Drummond, chief reporter on the West Australian and
long time head of the AFR’s Perth bureau. Illuminating. It’s clear the
Gallop government, for all Packer’s comments about copping the ban on
poker machines at Burswood, clearly believes that can be changed over
“But I think the present situation is an anachronism, and I think it is
hard for Burswood to reach its full potential while that situation
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“I don’t want to speculate on what governments will do, or won’t do,
but I think clearly there’s a reason why every other casino in the
world doesn’t have the same machines as Burswood,” said Packer.
Drummond pointed to recent research from UBS, the investment bank,
which said Burswood could earn $20 million or more extra if the ban was
So there it is, the real reason for the Packer comments. He and his
father do not make statements for no reason. They are not flippant
people and appear so infrequently in public in interview situations,
that they know they can make their point with careful, considered
And this is what he did with the Drummond interview. Forget statements
like expecting no ‘regulatory favours’ from the Gallop Government. Just
listen to what I say. And the Burswood bid will see PBL making
“Burswood more alive, more fun, more interesting, more exciting venue
to visit. I think for the government, that will end up producing more
revenue, which again will end up benefiting the people of Perth.”
Well, what about the people of WA, after all, the Gallop government IS the government of Western Australia?
But quibbling aside, it is clear the company’s future is in gambling.
It may have been a “stupid question”, to use CEO Peter Yates’s answer
to a question late last year about a possible PBL bid for Burswood, but
it is the most logical deal the Packers can make here.
Media is out and as James Packer has made it clear, he has no interest in John Fairfax, whatever happens.
“I think – now this is just my view and my dad might have a different
view, I don’t think he does, and some people in management might have a
different view – but I wouldn’t want to buy John Fairfax if cross-media
Now that’s a pretty clear statement that James Packer is back, running
the company. It will also feed the paranoia among the publishing and TV
gang at PBL that should Kerry Packer die and James Packer is in charge,
then a divorce in the company is quite possible.
James Packer does not like the mags and TV business anymore. For all
the glamour, it is all a bit boring. No ability to do big deals, it is
all grind and watching the pennies, hence the attraction to investment
banker, Peter Yates. Seek.com and now Burswood feed the need in James
Packer to be seen doing deals. It’s what he is now accustomed to
and what he wants to do. A short attention span? Perhaps.
Thanks to Peter Yates, James Packer has been shown a business he can
understand. Gambling in all its forms is a Packer area of major
interest. Just look at his father’s preoccupation with gaming here, in
the UK, US, South Africa. And punting in currencies for years (most of
which was unsuccessful). Not to mention gambling on horses. Ask former
bookie, Bruce McHugh, who retired after the strain of dealing with
Kerry Packer at Randwick in the mid 90s.
Looking at the PBL board there are four gambling nuts. James and Kerry
Packer, Peter Yates and Owen Craigie, the head of Crown and someone
John Alexander should not dismiss in his ambition to supplant Yates.
The Burswood deal will increase the power of this quartet, especially
Craigie if he is given the task of integrating Burswood into the Crown
system and way of doing business.
The Packers clearly see more of a future in gaming. It cannot grow in
magazines, controlling around 49 per cent of the market, and is up
against similar barriers with a share of around 41 per cent of TV
revenue, the only market share that matters.
And so long as the Packers see a future in gaming of all sorts, then
Peter Yates has a job at PBL because gaming is his strength. It is not
the strength of John Alexander.
The Packer’s ambitions for online gaming took a bad stumble last year
where federal Government legislation forced the Vanuatu-based operation
to be shutdown.
Packerdom wasn’t about to be defiant when the valuable TV licences are
regulated by the Federal Government, or Crown’s licence in Victoria is
overseen by a Bracks ALP government not all that enthused about gaming.
Alexander who continues to revamp Nine according to the same blueprint
he used at ACP magazines and publishing. Despite the talk, Alexander
might go to Fairfax as Fred Hilmer’s replacement. It would be a
step backwards, and John Alexander rarely takes a step backwards
without having one or two forward movements up his sleeve.
Still if it happened it would confirm that James Packer and Peter Yates
remain firmly in control at PBL and there was no way through to the top
for JA. But don’t bet on it.
With Burswood sure to fall and a bedding down process to take a few
months, thoughts at Park Street would be turning to what’s next.
They will tell you that Burswood and reworking Nine remain their big
concerns, but they are also considered to be in the bag and subject to
the usual caveats of all over bar the shouting.
The dividend has been lifted, benefiting everyone and shutting up the non-Packer shareholders.
So what else? Where will PBL be heading in about 18 months time?