James Packer certainly can’t match his famous father for clout. But the war he’s waging to build a second Sydney casino shows that he comes from the same powerful gene pool. And it proves the Packer name still rings loud with the nation’s decision makers.
The gaming and pay-TV tycoon’s $5 billion fortune – somewhat reduced by a couple of bad bets in US casinos in 2008 – is also a powerful tool in getting him what he wants, as is his willingness to take risks and create jobs.
Big Jim already has the Liberal premier of NSW, Barry O’Farrell, eating out of his hand on the casino, and he has now enlisted the ALP’s dream team, Karl Bitar and Mark Arbib, who did such a brilliant job of seizing control of the NSW Labor party, before they ran it into the wall and wrecked it.
No doubt he’s paying the pair extremely well.
In doing this, James is just copying what his father did with a previous generation of Labor fixers—Graham Richardson and Peter Barron – who proved so useful in getting decision makers to lean the Packers’ way. But he also has Victoria’s ex-Liberal premier, Jeff Kennett, itching to join his campaign to Crownify Sydney, and he can always count on support from John Howard and Peter Costello when he needs it.
On top of all this, he has Howard’s former Minister for Communications, Helen Coonan, on the board at Crown Ltd, along with the chairman of Tourism Australia, Geoff Dixon, and one-time hardman of waterfront reform, Chris Corrigan. This trio is flanked by investment banker Ben Brazil, who is one of Macquarie Bank’s big kahunas.
All in all, it’s quite a team, and James is no bad captain. Back in 1994, when the Sydney casino licence was up for tender, he phoned a minister in John Fahey’s NSW Liberal government to deliver a message from his dad that they were all “fucked” if the Packer bid failed to win.
Three years later, when the Packers were contemplating one of their regular bids for Fairfax, he flew round the country to lobby Liberal backbenchers who were blocking the cross-media laws, and trekked out to a shopping centre in suburban Brisbane to press the flesh with one of the most stubborn opponents, Gary Hardgrave MP. Hardgrave was amazed and flattered that someone as powerful as Packer would come to see him.
This year, James has even been using the media – which he once hated doing – to talk up his casino plan, which involves putting a new 6-star hotel for high rollers on a big patch of open space in the middle of the Barangaroo development.
Naturally, Packer has friends who can help in the media too: Alan Jones is always ready to spruik his wares, and has welcomed the casino as a “visionary” plan. The chaps at the Australian Financial Review are almost as keen.
So with all this going for him, how come James doesn’t match his old man? Put simply, there are two reasons: one is his personality, the other is what he does for a living.
Kerry Packer’s great strength was that he could be heroically charming or terrifyingly rude. James has some of the first but not much of the second, and doesn’t inspire fear in the way that his father did. It was a brave man who stood up to the Big Fella, as James knows well.
But what also gave Kerry his power was that he ran one of the country’s biggest media groups, which included Channel Nine, the Australian Women’s Weekly, the Bulletin and (once upon a time) the Daily Telegraph and a bunch of suburban newspapers. There was also the constant threat that he would add the Sydney Morning Herald, The Age, and the Australian Financial Review to his armoury. So politicians were keen to give him what he wanted. Rightly or wrongly, they feared he had the power to break them at the ballot box or, at the very least, make life hard.
Since James cashed out of Channel Nine and ACP magazines in late 2006, he has had no such weapons in his arsenal, unless you count his 9% share in the anaemic Network 10, where he helped Andrew Bolt get a Sunday show that no one watches. So he no longer frightens anyone.
However, his casinos do have something that makes politicians sit up and take notice. And that is the ability to generate vast amounts of tax revenue and create jobs. Melbourne’s Crown Casino has poured around $3 billion into Victoria’s coffers over the last 18 years and is one of the state’s largest private-sector employers, with 6,500 employees.
Crown’s money helped the Kennett government revitalise Melbourne, so it’s no surprise that the former premier is happy to back his old friend, despite all the problems that gambling can bring. It’s also no surprise that Barry O’Farrell keeps popping up to support the Packer plan.
But Packer’s team of heavy hitters may still not be able to get him what he wants. The Star Casino has an exclusive licence in Sydney until 2020, so O’Farrell can’t just give Packer the green light to build another venue. The NSW premier also can’t just grant a new licence to his mates—it has to go through an independent judicial process. So the only way James will get his new casino is by seizing control of the Star’s owners, Echo Entertainment. And despite last week’s success in getting rid of Echo’s chairman, John Story, that goal is still a long way off.
But the war is just beginning. If Packer passes NSW and Queensland probity checks (which won’t be a problem), he will be able to double his stake in Echo to 20%. He can then creep it up at 3% a year, without having to make a full takeover. It will be interesting to see what happens if he does, and whether his interest will provoke a $3 billion takeover battle. The Malaysian operator, Genting Casinos, is already showing interest, and has grabbed a 4.9% stake in Echo. Packer is apparently ready to talk.
Whether or not James gets what he wants this time, The Power Index reckons his public campaign says a lot about how much he’s changed since his father died in December 2005. At the depths of the GFC in early 2008, there was talk of him being depressed, almost suicidal, and of him cashing it all in or privatising the empire to avoid public scrutiny. Recently, he has looked relaxed and confident in public, and much happier in his own skin. He seems much more mature, much more his own person.
He may never be as powerful as his father, but he appears to finally be out of his shadow.
This article first appeared on The Power Index.