Kerry Packer and the Media
“The fact that I have entered into IT-related business is proof that businesses have to evolve and keep with time. One has to re-invent continuously.”
Kerry Packer passed away yesterday, December 26th. He was only 68. He was considered to be the wealthiest man in Australia.
His wealth came primarily from media, where his power and control at times were feared. Women’s Weekly, a magazine that his father started became the core, but led to Packer’s ownership of some 60% of all magazines in Australia. He owned the major Sydney newspaper, the Daily Telegraph.
He failed in his attempt to purchase the Fairfax chain. He described the profits that methodically come out of this media company as “a river of gold.”
He had significant holdings in other forms of media including television, pay-TV, and Internet holdings.
He pursued his love of gambling with investments in casinos, primarily in Australia, but with a growing interest in Asia. The business empire was controlled through an Australian public company called, Publishing and Broadcasting Limited (PBL)
Here is how the company profiles its non-traditional publishing interests:
PBL owns and operates two of Australia’s leading gaming and entertainment complexes, Crown in Melbourne and Burswood in Perth. It also owns the highest rating free-to-air television network, the Nine Network, and the largest magazine publisher, ACP Magazines.A strategic portfolio of investments has been accumulated to complement PBL’s existing core businesses and to provide for future growth. It includes:
- 25% of Australia’s leading subscription television business, Foxtel.
- 50% of subscription television content provider The Premier Media Group, producer of leading sports channels Fox Sports 1 and Fox Sports 2.
- 33.3% of Sky News Australia.
- 50% of Australia’s leading internet portal, ninemsn.
- 25% of the nation’s number one online employment business, SEEK.
- 100% of Ticketek, Australia’s largest ticketing provider.
- 100% of Sydney SuperDome.
- 50% of leading cinema entertainment company Hoyts Corporation.
- 25% of the successful Hollywood cinema and television production company, New Regency.
Interestingly, James Packer, Kerry’s son is not terribly interested in making further investments in publishing media.
Essentially, the competitive landscape has changed, and News Corp as well as the Internet have become formidable competition for Fairfax.
"I think it would be a much riskier proposition than I would be willing to recommend. You just have to look at the sharemarket - our shares today trade at $12 and Fairfax trades at around $3.30. And they were the same price 10 years ago.
"I think that however much John Fairfax has underperformed the rest of the media market over the last 10 years, the competitive threats facing that company are more severe and more dangerous and more daunting today than they've been before.
"My hope is not that those comments create a flashing headline that Fairfax management and directors get upset about by my being argumentative - I'm not. Personally and professionally I wish them well. But I think they've got two competitors: News Ltd/News Corp have proven to be the best operators of newspapers in the world - and their other competitor is the internet, which I think is a technological change that comes along once in a lifetime. And both of those guys are gunning for Fairfax."
Kerry Packer may have been a brilliant and tough businessman, but his legacy includes the remembrance of his soft heart for his employees and staff. What a great way to be remembered! R.I.P.