AIB Featured Business Leader – James Packer
If you’re Australian, you’ve almost certainly heard of James Packer. The scion of the three-generation Packer empire, he has invested in ventures from casinos to media companies, and ended 2016 listed as the fifth richest person in Australia.
Packer was born in 1967 to Kerry and Roslyn Packer, the grandson of media mogul Sir Frank Packer. When Packer was just seven, his grandfather died and his father inherited the family estate, then worth $100 million and including the Nine Network and Australian Consolidated Press. It’s fair to say that the younger Packer didn’t struggle financially in his early years. He was sent to the exclusive Cranbrook School, where he obtained a Higher School Certificate but not the marks to get into university. Instead, he followed a Packer family tradition and went to work as a jackeroo on his father’s 10,000 square kilometre cattle station – Newcastle Waters.
But life wasn’t all cattle mustering and boundary riding. After a year on the station, Packer returned to Sydney, buying a huge apartment overlooking Bondi Beach and coming to work for his father’s business in the downtown Sydney Packer building. Keen to learn, Packer endured his father’s domineering, ‘tough love’ style for years as he developed a feel for the ropes of the business.
Packer quickly developed a reputation for being a socialite, spending his spare time on the polo circuit and dating a series of models. In 1999, he married glamour model Jodhi Meares, although the relationship ended just two years later. After a broken engagement to Kate Fischer, also a model, he was married again in 2007 to model and singer Erica Baxter, with whom he had three children born in 2008, 2010 and 2012 before announcing their separation in 2013.
Back in the late Nineties, though, he was still concentrating on proving his worth to his father. He also wanted to build his own independent business. To that end, he invested in fledgling mobile phone company One.Tel along with Lachlan Murdoch in 1995, soon after the deregulation of the Australian telecommunications industry. One.Tel grew rapidly in its early years before hitting rocky ground in 2000. The Packer and Murdoch families poured a further $280 million into it in a last ditch attempt to save the business, to no avail. In 2001, One.Tel went into administration, giving rise to a long and highly publicised lawsuit against director Jodee Rich, in which Packer’s personal diaries were used as evidence.
The saga was devastating for Packer. His father’s famous temper came to the fore, and Packer had a nervous breakdown. His marriage broke down and he reportedly became seriously depressed. He stepped back into business in late 2002, determined to expand the family business. There were clashes with his father, who had opposed the purchase of Crown Casino in 1999 and did so again with the purchase of Burwood Casino in 2004, both of which the younger Packer succeeded in acquiring. Sydney Casino, also in his sights, was blocked by Kerry before completion.
Things turned around tragically at the end of 2005, when Kerry Packer died of the kidney disease that had been taking a toll on his health for several years. James took over Consolidated Press Holdings Limited (CPH) and quickly moved to reshape the company, moving its focus away from traditional media and into casinos. No longer under his father’s thumb, he sold off almost all the Packer media assets, from TV to newspapers, reaping $US4 billion in the process. His timing was perfect, coming as it did just before the rise of online media began to decimate print profits.
He also went on a personal spending spree, buying a private jet, luxury boat and Mayfair apartment at a total price tag of around $150 million. Packer was cashed up and emboldened, and his next stop was Vegas. His intention was to buy casinos, not play in them, but it was a decision that was to prove the biggest gamble of all. He invested heavily in a new, ultra-high-end resort called Fontainebleau, as well as buying stakes in a number of other casinos. His biggest stake was in buying the Cannery Casino Resorts outright to the tune of $2 billion at the end of 2007. It was the peak of the market and prices were high.
And then the subprime mortgage crisis hit. Developments were abandoned and mortgages foreclosed. Estimated losses rise as high as $2.6 billion, half his considerable fortune. Big as this blow was, though, it didn’t spell the end of his fortunes. Packer had also invested in casinos in Macau and back home in Australia, both of which have risen steadily. The company also owns stock in British casino complex Aspers, and online betting company Betfair.
In 2011, Packer invested in online coupon sites Scoopon and Catch of the Day, US real estate site Zillow, and he jointly owns an independent film company called RatPac. These investments, along with the casino empire, have seen his wealth rebound from its low in 2009 to an estimated $US3.5 billion. He’s also finalised a carve up of his father’s inherited business empire with his older sister, Gretel, which saw her receive $1.25bn in cash and assets as well as a residual interest in Consolidated Press Holdings.
With an empire that spans the globe, it seems probable that Packer’s famously hard to please father would, finally, be proud of his son.
This article was written by Tanya Ashworth-Keppel on behalf of the Australian Institute of Business. All opinions are that of the writer and do not necessarily reflect the opinion of AIB. The following sources were used to compile this article: Forbes, Sydney Morning Herald, Tatler , The Australian, Fast Company.
Image credit: CNBC