Take a look at the memo sent by PBL boss John Alexander to staff yesterday about the empire’s new venture PBL Media — and spot the missing name.

Not JA himself, he’ll be Executive Chairman. Not Ian Law, he’ll be CEO. Not Pat O’Sullivan (CFO), or Chris Anderson (board member).

But where’s the head of the TV bit? Where’s Eddie?

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I’m sure you have all heard and read media speculation in the last few days about changes at PBL.

It is great news for our company; for the growth of jobs and our businesses, and the future of PBL both in Australia and overseas.

I’m sorry I have not been able to confirm any details before today, but aside from legal and other requirements, we completed this transaction only late this morning.

The deal involves establishing Australia’s largest media company, PBL Media. It will be 50% owned by PBL and operated and run by existing PBL people. It will introduce new capital and energy into our media business.

And, furthermore, release capital ($4.5 billion) to PBL to grow and develop our other businesses – not just gaming.

The $5.5 billion transaction will involve the sale of an economic interest in 50% of PBL’s existing media properties – the Nine Network, ACP Magazines and several of its on-line ventures – including ninemsn and carsales.com.au – to private equity funds managed by CVC Asia Pacific and CVC Capital Partners (“CVC”).

CVC was chosen as our partner for several reasons, not least the chemistry that was clear between ourselves, but also their commitment to grow our media business together, both domestically and overseas.

One of the key reasons CVC decided to invest was the quality of our people. You are our biggest asset.

For those interested in the financial aspects of the transaction, PBL will receive a cash inflow of $4.542 billion, and have an on-going equity investment of $982m (50%) in PBL Media. It will be Australia’s largest diversified, and first fully integrated, media company.

PBL will retain management control of PBL Media. I’ll serve as Executive Chairman, Ian Law will be Chief Executive Officer and Pat O’Sullivan, Chief Financial Officer. The Executive Deputy Chairman of PBL, Chris Anderson, will also serve on the PBL Media Board, as will James. I will continue as the Group Chief Executive of PBL.

PBL will also retain its interests in its other media and on-line businesses – Foxtel, Foxsports, Seek, Hoyts, Betfair Australia and Ticketek.

The transaction will enable our gaming business and other online businesses to grow, free of the competition for funds with our media business. PBL will retain 100% ownership of its gaming interests, including Crown in Melbourne and Burswood in Perth, and will remain focused on new opportunities in Australia and overseas. PBL Gaming will continue to be led by Rowen Craigie.

While there is a business as usual element for all of us, the transaction will reinvigorate the company going into 2007. I am sure it will be a great year for all aspects of the company and, certainly, the new PBL Media.

Adrian MacKenzie, a Partner of CVC, has told the media today that he is delighted to be involved with one of the world’s great media companies.

“Opportunities to invest in quality, market leading assets such as PBL Media are rare. There is terrific chemistry between PBL and CVC. I am confident that this will be a great partnership.”

For those of you who are shareholders in PBL, another benefit of the restructure will be the quarantining of the gaming and media businesses, with the latter’s use of non-recourse debt protecting PBL shareholders from additional capital risk incurred in the funding of its expansion through acquisition.

I am sure you will all get behind this decision. For some further information, I have also provided some comment below about CVC, our new partners and a copy of our Press and ASX statements released today.

Many thanks for being such a key part of PBL, in all our businesses. We have so much to which we can look forward.


John Alexander

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