There’s an easy explanation for the split in the Packer Empire, announced today. While the overall market is up around 11 to 12% since 1 January, shares in PBL, the key company in the Empire, had only risen 4%, much to the frustration and annoyance of James Packer and his board.

It’s also a way for Packer to break with his father’s strongly media orientated past and strike out on his own, overseeing the gambling business where he is far more comfortable.

The shares jumped by around $1.50 to more than $22 when the news of the split was made. The announcement of the split between the gaming and the media assets calls into question the sale of 50% of PBL Media last year to CVC Asia.

It wasn’t needed and simply raised cash which has so far been dolled out in fitful investments in the media (NBN) and casinos (Las Vegas and Macau) without much coherent thought. In fact some two billion of the more than $4 billion raised in the PBL Media-CVC deal will be used to pay to shareholders.

Packer’s master company, Consolidated Press Holdings, will not only keep a 37% stake in the two new companies, Crown and Consolidated Media Holdings, but will get its hands a very handy $780 million. That’s enough to pay for quite a few weddings.

Crown will own its Crown and Burswood casinos, in Australia, a 41.4% stake in Melco PBL Entertainment Ltd and other international gaming assets. Packer will be executive chairman of that while his casino boss, Rowen Craigie will be CEO.

Consolidated Media Holdings will own its 50% stake in PBL Media, which runs Australia’s biggest TV network, as well as stakes in pay television and internet assets such as Foxtel, Premier Media Group, and Seek. Interests in Hoyts (50%) will be “monetised” as will the PBL stake in the New Regency film studio in the US.

“It’s time to let these two successful businesses prosper in their own right,” Packer said in the statement.

“Investors will have the opportunity to invest in a strong and growing pure play media company and also in a world class gaming company.”

Under the proposal, both companies will trade on the stock exchange and shareholders of Publishing & Broadcasting will receive one share in each company for every share they own, plus about $3 a share in cash. They can also choose to get a higher proportion of the payment paid in shares or cash.

Packer’s family company, Consolidated Press Holdings Ltd, which owns 37% of Publishing & Broadcasting, will keep the same interest in the companies.

Both businesses will be operated separately, each with its own board of directors. James Packer will become the Executive Chairman of Crown and the Deputy Chairman of CMH. John Alexander will become the Executive Chairman of CMH and the Deputy Chairman of Crown. Rowen Craigie will become the Chief Executive Officer & Managing Director of Crown, which will be based in Melbourne.

The CEO of the media company wasn’t announced but PBL Media CEO Ian Law would be in the running, hence the decision last week to let go of the CEO’s role at ACP Magazines.

The restructure is intended to be implemented through schemes of arrangement in PBL and Crown.