The Australian media and gaming wars continues, as we learn that the James Packer swoop on Network Ten puts him at professional locker horns with mate and Network Nine CEO David Gyngell. Is it just business, or with Gyngell and friends take it personally? And, how will this effect both Nine's and Ten's balanced, often positive coverage of the gaming and gambling industry in Australia, and will Channel Seven and others use the situation to their advantage? Packer's move into Ten has the world's casino and media billionaires wondering what's next now that Packer has surly got his passion back from mainstream media, previously having most of his focus on media, while also improving his work - life balance, doing Bondi Beach, Spain, Macau and who knows where else. Media Man and Gambling911 jump aboard the Packer - Gyngell express with the latest from the Australian media and gambling wars down under...
James Packer is now one of Australia's and the world's, kings of mainstream media, but at what cost? ... professionally and personally.
Yesterday Packer leaped into Network Ten in a massive $245 million share raid that also sets him up for next year's AFL broadcast rights, and much more.
Let's see, only today did Network Nine CEO David Gyngell become of his best mate James Packer's share raid on the rival Ten network but he has promised to be a "fierce rival" (but that does not mean personal enemy let it be noted).
It was last night when former television tsar James Packer, whose father Kerry Packer once upon a time owned Network Nine, bamboozled the Australian media industry by snatching $245 million worth of Ten shares at $1.50 a share.
Packer long time friend, Gyngell, was none the wiser of the surprise return to television of the Packer dynasty, as colourful as any in world history.
Network Nine sources say Gyngell would certainly not consider a move to the Ten network in the future, but are they just following the company line? It may be too early to know for sure.
Packer and Gyngell friendly rivals but also ultra competitive. Gyngell signed a 4-year contract in May with Nine's owner PBL Media and "parent" company, CVC Asia Pacific, a very successful private equity firm.
Gyngell has been working at Nine his entire working life, except for a short run at Granada in the United States, and leaks say has "running in his veins".
Numerous tips to Media Man indicate Packer's influence at Ten could very well result in massive cost cuts and would likely see the network put off its high risk and expensive foray into news and current affairs.
Network Ten has bold plans to significantly expand its news offerings and has now hired presenter George Negus, sometimes seen on The 7PM Project, to front a new current affairs show which would be part of a 2.5 hour chunk of news Mon - Fri.
The strategy also would involve moving youth-focused programs Neighbours and The Simpsons to a new multi-channel, Eleven, and broadening the main channel's demographic.
Packer is also a known critic of Ten's failure to capitalise on the ratings success of MasterChef Australia, in fact the most watched television show in Australian history.
Ten's dedicated sports channel ONE has also failed to reach its potential, and is currently only attracting a share of about 1%.
Media buyer - wheeler dealer Harold Mitchell said that the move indicated a growing confidence in the future of the free-to-air industry, which has been given a boost by the launch of several new multi-channels.
"Television, equally, has stopped its fall in free to air," told ABC radio's Breakfast with Fran Kelly.
"Because these new channels that they've got, these new digital channels, they've been very clever because they've broadened the viewing and the audience and therefore the revenue stream. So if this is indeed James picking a market, he's picked the right time to do it, I can tell you that. Well, I don't know what's in James' mind, but there are two things about any media owner that I know, Fran, that are important and they're very simple: in free to air television it's profits, therefore turnover, making sure that a good business is run. And, you know, still Fran, in Australia with the media, it's power. If you're a major owner of a media company, there's plenty of power there. Or, indeed, if you're the ABC. That's what the media is."
Ten has confirmed 15.6% of the network's shares have been sold but said the identity of the purchaser remains under wraps, according to a statement to the Australian Securities Exchange at time of publication, but all should be revealed soon enough.
"Ten Network Holdings Limited notes the media reports overnight indicating that interests associated with Mr James Packer have acquired an interest of approximately 15% of the issued capital of TEN," group general counsel and company secretary Stephen Partington said.
"Ten is also aware that a special crossing of 163,305,048 shares (representing approximately 15.6% of the issued capital of Ten) at $1.50 per share was booked through the exchange after close of trading last evening.
"Ten has yet to be formally advised as to the party that has acquired these shares."
By midday Ten's stock was trading up 9c at $1.50.
The latest just in...
Packer Eyes Sky TV...
Packer's $250 million-plus raid on the Ten Network is likely part of an elaborate plan that could lead to the axing of Ten's sports channel, One HD, and its replacement with a free-to-air version of Rupert Murdoch's Sky News service!
By closing the Ten sports channel, Packer would eliminate a big competitor for the sports channels on Foxtel...the pay TV network that he jointly owns with Murdoch's News Ltd and Telstra.
Under Packer's crafty if not cunning plan, Sky News would still be screened by Foxtel but would use one of Channel Ten's new digital free-to-air stations as another distribution point, giving it a much bigger potential audience reach... piece of the pie.
Until now Sky News has only been available on Foxtel and its regional equivalent Austar.
So as the commercial networks began offering multiple free-to-air channels, the pay television business has been under massive pressure. The management of Foxtel is tipped to battle the Packer move.
A second leg to Mr Packer's investment in Ten involves cutting costs by chopping the network's expensive plans to boost its news service between 6pm -7pm, part of which involved installing news and current affairs veterans George Negus and Chris Masters.
Packer would rather see a cheap alternative of reruns of programs such as mainstay The Simpsons.
Cutting network operating costs would be an essential element to making a return on his investment. But while the theory is sound enough, the execution will put Packer into battle with the management and board of Ten.
In a statement to the Australian Stock Exchange last night, Packer's private company, Consolidated Press Holdings, confirmed it now owned more than 186 million shares in Ten, or 17.8% of the stock.
As the stake might not be sufficient for Packer to push through his plans, he may need to enlist the support of regional TV tycoon Bruce Gordon, who owns 12% of Ten, and Perpetual Investments, which has about 10%.
At this stage, Packer has no plan for a full takeover bid.
Mr Packer ended his family's association with free-to-air television two years ago when he sold the last of his stake in Nine Network's parent, PBL Media.
Rest assured that more surprises, so don't change your dial... or website!
Read the first report on the Gambling911 Packer share raid...
'Australian James Packer Expanding Gambling, Media Interests'
Yesterday a Media Man spokesperson said "James Packer's latest business plays have been brilliant. It's risk management, brand building, convergent media, relationship leveraging and more all in one. He's also buying entities at the right price, and has a global business model which helps ride out the world's financial storm, while also having an Australian - Asia Pacific focus, which is one of the strongest markets in the world at the moment, away from the chaos of sorts in Las Vegas and Atlantic City. From here on up it should be pretty smooth sailing for Packer and Billionaire Inc. Punters should likely expect some gambling or gaming reality TV shows, as Packer's passion for both having a punt and news media is pretty contagious. Packer is making exciting and smart business moves and has a world class team of advisers around him. He's also spending millions upgrading Crown and Burwood casinos, to help further cement them as the leaders, while Tabcorp tries to chase him with their Star City. Packer once again proves the knockers wrong, and we can't wait to get back down to Crown Casino to congratulate the Packer powers that be in person. From Bondi Beach to Palm Beach, Macau, Perth, the internet, to TV land - the world is his oyster. Watch this space".
Media Man Profiles
Readers... er, punters, what's your view on the latest in the Australian media and casino wars? Keep checking daily for updates. If you have a bet, please bet with your head, not over it, and for God's sake, have fun.
Crown Limited Share price: $8.490
Network Ten Holdings Limited price: $1.580
CVC price: 0.910
*Greg Tingle is a special contributor for Gambling911
*Media Man http://www.mediamanint.com is primarily a media, publicity and internet portal development company. They cover a dozen industry sectors including gaming and offer political commentary and analysis.
*The writer owns shares in Crown Limited
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