James Packer appears to be in the middle of a personal and professional cleanout, sparked in part by the global financial crisis, which has seen his fortune fall from $6 billion to around $3 billion in the last 12 months.

He’s sold the luxury boat, the apartment in Mayfair and, according to BRW , some of his prized polo horses which were stabled in Britain. Earlier this year, he flogged off his company’s landholdings in rural Australia and earlier this month he left the board of Gold Coast property developer Sunland.

Yesterday, Consolidated Media Holdings sold off its stake in online classifieds company Seek for $440 million. Two days ago, Packer flogged off the company’s headquarters in Park Street, Sydney for $50 million.

What’s next? Company cars? Fixtures and fittings? A few old filing cabinets and some laptops?

There was more bad news for Packer this morning, with his Crown gambling empire reporting a $1.2 billion loss for 2008-09. The result was dragged down by $1.4 billion worth of writedowns, mainly related to the company’s disastrous investments in the North American casino market. As Crown boss Rowan Craigie admitted this morning:

“The global financial crisis has had a major adverse impact on the North American casino industry leading to a requirement to write down the carrying value of Crown’s investments in these markets. In this context,

“Crown’s investments in North America were ill-timed,” he said in a statement.

The sale of the Seek stake is, on the face of it, particularly curious. It’s been a brilliant investment for the Packer clan since they bought a 25% stake in 2003 for around $33 million. As Seek’s domination of the recruitment classifieds market has increased, the value of Packer’s stake has soared.

But why sell out now? Sure, Seek is coming off a tough year, with a 28% decline in net profit in 2008-09. But the long-term shift of classified advertising out of the newspaper and onto the web means the company should be brilliantly placed for the economic recovery. Seek has also built a nice little education business and is continually looking for opportunities to diversify further. The company looks like a perfect long-term investment.

But as Packer trims down his empire, he seems to be focussing on two areas: gambling, through the Crown business; and pay television, through Consolidated Media.

The sale of the Seek stake leaves Consolidated Media with three main assets — a 25% stake in the Foxtel pay television network; a 50% stake in Premier Media Group, the company that produces the Fox Sports channels on pay television; and a whopping great pile of cash.

This cash could come in very handy if Packer is forced to try and fend off his great media rival Kerry Stokes, who clearly wants a slice of the pay TV pile.

In July, Stokes’ Seven Network launched a surprise raid on Consolidated Media, amassing a stake of around 19% in the company. Packer responded by spending around $25 million to increase his personal stake from 37.9% and 39.3%.

Speculation continues that Stokes will launch a full takeover for the business, which will leave Packer with a tough choice: defend his position or take Stokes’ cash.

If he decides to defend his position by launching a rival takeover to a potential Stokes deal, the cash from the sale of the Seek stake could come in very handy. If a full bid cost Packer $1.4 billion (just as an example) then the actual cost to Packer is only $1 billion, as he would immediately get his hands on $400 million in cash to defray the cost of the bid.

Business Spectator columnist Stephen Bartholomeusz suggests Packer could also launch a share buyback and then not participate — this would help increase the size of his stake and make it very tough for Stokes to gain control.

The great media mogul fight could have a few rounds to go yet.

Peter Fray

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