James Packer’s interview in The AFR yesterday suggested he was
shocked, hurt and angry that Rupert Murdoch apparently gave the green
light to News Ltd papers for a brutal attack on the Packer family
interests, such that he’s even been moved to comment on the value of
planes that Rupert and his minions fly around in.

Given that super-sensitive James has been known to ring Fairfax
chairman Ron Walker to complain about photographs in TheSMH, and also prevailed on the Murdochs not to report his 1998 separation from
Kate Fischer, last week’s News Ltd reporting is clearly most upsetting.

The Packers must now be regretting ignoring our advice in November 2004, which you can see halfway down this package of sealed sections at the time. It included the following lines:

Now is the time for Kerry Packer to step up and take his place at the table for
the News Corp end game. The News Corp poison pill means that neither the
Murdoch family or John Malone’s Liberty Media can buy more than 1% in
additional voting shares.

With Murdoch sitting on 29.8% of the voting stock
and Malone holding 17.2%, there is a big opening for the Packers to snap
up a strategic 10% voting stake. Packer could then choose to
play the saviour for either of the warring parties, but wouldn’t it be ironic if
he sided with Malone and therefore participated in the carve-up of News
Corp.

It would only cost
about $2.5 billion to seize this key 10% voting stake and Rupert would
not be able to respond with a counter raid on PBL because of foreign ownership
limits on Australian television businesses. Rupert wouldn’t even be able to increase his News
Corp stake because his hands are now tied by this poison pill
arrangement. Then again, we doubt Packer has the nerve, savvy, decisiveness or
fortitude to be like Malone.

News Corp shares fell $1.06 to $22.64 on the day the
poison pill was announced and then fell below $20 last October. The
Packers could have secured about 10% at around $22 and today they would
be enjoying a $500 million-plus profit given that News Corp voting shares
are above $27.

There is no way that Rupert would have been sticking the boots in last
week if the Packers had stepped up to the mark and taken a board seat
at News Corp after becoming the third largest shareholder.

The big question now is exactly how James Packer will choose to exact
revenge. Given that PBL CEO John Alexander has been outed demanding
that Mark Llewellyn launch an attack on Kerry Stokes, the Packers will
be super cautious about how they go about it, especially given the
judge’s comments last week after potential threats to Nine’s licence.

Don’t be surprised if John Lyons is deployed or Max Walsh comes out swinging in The Bulletin.
Of course, the most potent weapon would be one Alan Jones, who “picks
and sticks” with the Packers and regularly promotes their commercial and
personal interests. But would Jones risk a war with The Daily Telegraph and all that would entail? And how would Crown Casino scrub up against a sustained attack by Murdoch’s powerful Herald Sun? These are fascinating times.

Peter Fray

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