BRW's 1996 comments about Kerry Packer

Media, investment

Based: Sydney
Age: 58
Family: Married, two children

Kerry Packer's penchant for conflict was on full display last year as he baited Prime Minister Paul Keating and battled with his arch-rival, Rupert Murdoch, over the future of rugby league and pay TV.

Regaining control of rugby league marked a change in Packer's luck after an appalling year in 1994, when his wealth was savaged by foreign-exchange losses, an unsuccessful bid for the Sydney casino licence and a plunging share price.

Victories in the past 12 months have confirmed Packer as the richest man in Australia and the dominant force in pay TV. He blocked Murdoch's attempt to stage a rival league competition and trumped him in a deal with the pay-TV company Australis Media. By leading a $200-million bail-out package for Australis, Packer's company Publishing and Broadcasting (PBL) is positioned to become the major shareholder in the company. This followed the collapse of Murdoch's attempts to buy into Australis, but not before Foxtel was committed to an expensive deal to buy programming for the company. Given Packer's shareholding in the other pay-TV operator, Optus Vision, he stands to gain regardless of which pay-TV service wins the biggest share of the Australian market.

Gaining a strong foothold in the new-media industry is an important part of Packer's strategy to reshape his business into a multimedia, leisure and entertainment conglomerate. But it is this strategy that has brought him into open conflict with Murdoch, as both men try to grab control of the new-media markets.

Packer and Murdoch could also be competing bidders for MGM studios in Hollywood. Regency Studios, part-owned by Publishing and Broadcasting, has submitted an offer for the studio, estimated at $1.5 billion. Murdoch owns Fox Studios and is widely believed to be interested in securing MGM. The auction for MGM offers a chance to secure content for free-to-air and pay-TV services.

The programming appetite of pay TV is behind a move by a breakaway group reportedly linked with Packer to run private horse racing meetings. The "proprietary" races would be run under lights on dirt tracks in Tasmania and Queensland and would be beamed to South-East Asia to take advantage of Asian people's love of punting. (Packer caused an uproar in the 1970s with his breakaway cricket series.)

Packer's biggest bet this year was on the federal election, when he openly supported the coalition, and in particular John Howard, who had promised a review of media ownership laws.

Perceptions that Packer is on a roll have been reflected in the share price of the listed PBL, which has risen about 39% in the past 12 months. Contrast this with a 5% drop in News Corp shares. The market also has supported Packer's decision to pass more responsibility to his son James, who has been appointed managing director of PBL.

Although the listed company has had something of a dream run, privately things have been more difficult. Throughout the year, Packer has been fighting the tax office over disputed assessments served on his private companies. The tax office is seeking $143 million after conducting an extensive audit, and Packer's advice is that he is not liable. Consolidated Press's public discussion on the matter has been a brief disclosure in the accounts, stating that no provision has been made, following legal advice that the company can defeat the tax office in the courts. It is believed that some of the disputed tax assessment relates to claims for money spent on his polo business.

Packer's fortune is often perceived to be mainly based in media but he retains extensive pastoral holdings, along with an investment in Huntsman Chemicals in the US. There has always been volatility in the family's net worth because of Packer's propensity to take a punt. The rising dollar has devalued Packer's US interests, although the increase in the PBL share price has more than compensated.

Packer took over the publishing and broadcasting group built by his father, Sir Frank (who died in 1974), and managed it well. He had a windfall in 1987 when Alan Bond paid $1 billion for his Nine Network television stations. That deal made Packer Australia's first billionaire. Three years later, he bought the stations back for a fraction of the price. He has invested in a range of assets such as chemicals, mining, pastoral and labels. He lives in the Sydney suburb of Bellevue Hill, and although he appointed his son managing director of his empire, he still plays a major role in decision making.