It’s not a pose you often see corporate leaders assume.
James Packer leaning back, his foot on a coffee table, waving a phone in one hand, and beaming for the camera.
Splashed across the front page of yesterday’s Australian Financial Review, the casino mogul looked relaxed as he proclaimed his intention to build a “global luxury brand”.
Barely a day has passed this week without Packer giving an interview to either The Australian or the Financial Review.
To be fair, the media blitz isn’t just the Crown executive chairman seeking publicity. It has been a strikingly busy week for the businesses he controls. But the flurry of articles mark a remarkable change in his attitude towards the media – he previously refused to engage at all.
On Monday came news that Echo Entertainment Group, the other big Australian casino company, would consider entering into a joint venture with Crown.
Yesterday, the AFR ran that (intriguingly illustrated) interview, where Packer outlined his intention to compete, through Crown, with Asia’s hottest gambling destinations such as Macau and Singapore. Explaining his decision to build a luxury hotel in Perth, he said its proximity to Asia was important.
“This is not a great deal for me; this is a deal where I expect my share price will go down,” he said, talking the deal down to the AFR. However, it was warmly welcomed by analysts. No less than UBS, Macquarie, JPMorgan and Goldman Sachs reaffirmed their ‘buy’ ratings on Crown stock, as the cost of the hotel was less than they expected.
It wasn’t the only good news for Packer to be aired on Thursday. The ACCC at noon announced it had no objection to Packer selling his stake in Consolidated Media to News Corp. Packer wants the dough to fund his many business schemes.
Today, the big news is that Crown has won the right to build a $1 billion luxury hotel at Barangaroo on Darling Harbour. Crown confirmed it is considering a $568 million capital-raising to fund the construction.
Packer hasn’t just been speaking to the papers – he’s been funding them.
Our sister site Crikey counted no less than 18 full-page ads over the last two days in Australia’s leading newspapers. The Daily Telegraph, Herald Sun, AFR, Courier Mail and the West Australian have had three full-page ads apiece spruiking the community benefits of Packer’s latest business deals. When he was pushing to ditch Echo chairman John Story in June, Packer’s Crown Casino took out no less than 20 full-page ads to pillory his rival.
Why the change?
Packer’s shifting media tactics can be partly put down to politics. By putting his face and his business interests in front of the nation, Packer is placing pressure on NSW Premier Barry O’Farrell and others in government to consent to his various plans. After all, it’s virtually impossible to do much in the highly-regulated gaming business without the approval of government. T
Packer’s also got a good story to tell.
He’s edged himself out of the media business that made his father rich, and poured his inheritance into gambling assets. Earlier this year he took on and successfully saw off Echo’s Story. Echo’s board dumped its leader and is now engaging far more with its former rival.
Packer has saved face by clawing back a good portion of his wealth, which halved during the GFC. Packer had invested $3 billion in five separate American casino projects, and when the GFC hit in 2009, lost most of his investment. In 2007, BRW valued Packer’s fortune at $7.25 billion. By 2011, that had halved to $3.75 billion. This year’s Rich List (released in May) pegs him at $5.21 billion – not a bad yearly improvement.
In 2009, journalist and long-time Packer watcher Paul Barry questioned whether Packer could recover from his terrible losses during the GFC. Yesterday on The Power Index, Barry answered his own question: “Packer’s chances of hitting the jackpot are looking better and better.”