Crikey has been a lone voice in trying to clear up the urban myth that Kerry Packer sold Channel Nine to Alan Bond for $1.05 billion and bought it back three years later for just $250 million.

However, normally informed commentators continued to propagate the myth in recent weeks so it was time to get James Packer himself to set the record straight at yesterday’s PBL AGM.

Australia’s richest man was happy to oblige and agreed that there has been “a lot of misreporting” on the issue, although sadly the press declined to correct the record today.

So what actually happened?

Sign up for a FREE 21-day trial and get Crikey straight to your inbox

By submitting this form you are agreeing to Crikey's Terms and Conditions.

In 1987 Kerry Packer’s private company sold Channel Nine in Melbourne and Sydney to Bond Media for $1.05 billion. James confirmed that his father owned 100% of the business and there was no capital gains tax payable because the assets were pre-1985.

However, Kerry only received $800 million in cash because he left $250 million in Bond Media as subordinated debt and James said this explained much of the confusion. When Alan Bond was going under, Kerry Packer converted this $250 million into a 37% stake in Bond Media.

However, there was about $500 million of debt sitting in Bond Media so in broad terms you can say that Kerry Packer received $800 million in cash and then received a free 37% equity stake that put an enterprise value (including debt) of $500 million on Nine, which was by then a different business because it included Channel Nine in Brisbane.

Fast forward 16 years and what is the deal today? James said he accepted analyst estimates that the PBL Media deal with CVC values the three Channel Nine stations at between $2 billion and $2.2 billion.

However, James only owns 38% of PBL so his share of the valuation is about $800 million. Only 50% is being sold, so his cash windfall equates to $400 million.

Then you’ve got the remarkably small capital gains tax bill of $30 million and you also have to consider $1 billion-plus in dividends paid out of Nine over the years.

There is no doubt that buying back Channel Nine was a great deal for the Packer family, but there is no excuse for anyone to again report the furphy about selling for $1.05 billion and buying it back for $250 million.

James Packer firmly put that one to bed yesterday.