The Murdochs and the Packers have been Australia’s two most powerful families for most of the past 50 years, but the relationship has waxed and waned over the decades as they competed with each other and for favours from malleable governments.

The most famous fight was explained as follows by The Economist in its Kerry Packer obituary:

His most brutal moment probably came in 1962, when he was sent by his father, with a few mates, to rough up the owner of a Sydney publishing house who was refusing to sell. He was busy trashing the office when Rupert Murdoch, also with a few mates, turned up to fight him.

The extraordinary James Packer interview in The AFR today marks a new chapter in the relationship and the key quotes were as follows:

  • It’s rubbish that I am looking for a $100 million boat. My plane is similar to the one John Hartigan has in Australia and much smaller than Rupert’s.
  • I am surprised by the personal nature of the stories, especially those published in the News Ltd press, with whom we are a partner in a number of businesses.
  • It is interesting to focus on whether this is a business or a personal attack.
  • We are not in dispute with News in any of our joint investments.
  • Considering News’s views have recently changed from previously supporting the removal of cross and foreign, I was surprised.

Eddie McGuire’s manager and deputy, Jeff Browne, explained the attacks in the News Ltd press as follows: “Look who’s in town. Rupert is here.” It’s actually quite irrelevent that Rupert is “in town” and James Packer is being disingenuous in saying that there is no dispute in their co-investments.

The source of Rupert’s anger is actually quite straightforward. News Corp dropped about $500 million in One.Tel after being encouraged to invest by James Packer. It also dropped about $500 million in Super League which was a war sparked by the Packers defending their rugby league television rights.

The Packers have refused to make it up to Rupert and continue to play lobbying hardball on media laws, using their close relationship with John Howard to ensure free-to-air television remains protected while pay-TV barely breaks even after another $500 million of News Corp cash been sunk into Foxtel.

Australia has been the worst market for News Corp over the past 10 years and this is a source of intense frustration for Rupert. He’s not used to having a rival mogul get closer to the government and out-do him when it comes to favours and media wars. With Kerry Packer out of the picture and James’s mate Lachlan having spat the dummy, the Sun King is clearly going for broke during a moment of weakness.

However, you have to query the strategy behind these public attacks because the Packers are ferocious competitors with $8 billion in net assets behind them. is already cutting the lunch of News Ltd’s newspaper classifieds and James could easily crank up the pressure on a number of fronts if he could be bothered.