Go back ten years when the first signs of the internet bubble were only
just emerging and PBL shares were below $5 and John Fairfax was
just shy of $3.

The companies had similar market capitalisations back then, but today
the Packer family’s 36.5% stake in the $11.8 billion gaming and media
juggernaut that is PBL is worth more than the entire $3.64 billion
equity valuation of Fairfax.

Ironically, it was the decision of current Fairfax chairman and Packer
mate Ron Walker, along with his long-time business partner Lloyd
Williams, to sell Crown Casino to PBL in 1998 that transformed the
company.

Kerry Packer was hell-bent on buying Fairfax at the time and observers
remember PBL political fixer Michael Kroger running around at the
opening of Crown in May 1997 lobbying any politician he could find. The
Packers must be thanking their lucky stars that John Howard couldn’t
deliver on his promised media ownership changes, so within a year PBL
had instead moved on Crown in a company transforming takeover.

Yesterday’s PBL casino deals have an interesting history. Firstly, by
giving Stanley Ho’s companies the flick from their extortionate 20% of
gross gaming revenues fees, we have a much simpler structure.

The Packers ran a vicious campaign to win the Sydney casino licence in
the mid-1990s alleging that successful tenderers, Showboat and
Leighton, had all sorts of probity problems. Ironically, it was probity
concerns by the Victorian and West Australian gaming regulators that
saw Stanley Ho elbowed out of PBL’s Macau operations, albeit at a hefty
price.

Packer should have teamed up with his old mate and Las Vegas guru Steve
Wynn, rather than Circus Circus, in bidding for the Sydney licence,
because PBL and Wynn have now finally gone into business together in
the other half of yesterday’s Macau deals.

I well remember interviewing Wynn and Lloyd Williams shortly before
Crown opened. Lloyd said he was a complete plagiarist who copied
everything that Wynn had done, while Wynn said Crown was the best
casino in the world, although his soon-to-be-opened Bellagio would give
it a run for its money.

Wynn also gloated about being mates with Kerry Packer, saying they
played golf together during his regular trips to Las Vegas. Packer
continued to frequent Wynn’s casinos but it’s a little surprising the
two mates never got into business together.

Now it is James Packer who takes the credit for finally doing a deal
with Wynn, while remaining in bed with Stanley Ho’s less controversial
son Lawrence, who doesn’t have such colourful connections.

The cleaner structure in Macau leaves just one anomaly in the Packer
casino empire – why are the UK casino developments with the Aspinall
family being done in the Packer family company? Surely, this is an
investment opportunity that should also have been presented to PBL. One
for the AGM, perhaps.