Understanding James Packer and judging his success or failure - present and future - turns entirely on understanding that he has made two big strategic calls.
One was to exit 20th century media - free-to-air TV and magazines. To exit them, self-evidently, in Australia but, for what it's ever worth, the decision applies globally.
It was a decision that developed from the late 1990s, so that he was able, brutally but clinically, to hit the ground running on the death of his father.
The second was to go long 21st century China. At core, seeking to ride exactly the same long wave as BHP Billiton and Rio Tinto, indeed as Australia overall.
But via a very different path. It was - is - of course, his real first (business) love: gaming. And in the only available place, Macau.
Indeed, when you think it through, Packer is really aiming to sell a sophisticated consumer product into the fastest rising disposable incomes on the planet, of some 1.3 billion people. With all the pluses - and very real competitive risks - that entails.
Now, that is 'first love' in a very different way to his late father Kerry or his mentor in this space, the man who in effect built him his money-making Xanadu on the Yarra, Lloyd Williams. For James it is all about the certainty and mind-bogglingly fine detail of the mathematics.
Understand this and you begin to understand where he is going and the dynamics of that journey. And why the US gaming plays that were the focus of the ABC's 45-minute advertisement for Paul Barry's new book were an extremely costly, if instructive, diversion.
Even accounting the $1.5 billion apparently lost cold and extraordinarily rapidly in the US (and Canada and the UK), Packer's combined media and gaming corporate empire has outperformed almost all his relevant peers on his unqualified watch.
As I explained yesterday, the package of value from the old Packer PBL company had increased by $1.20 (down to 97 yesterday) since the death of Kerry on Boxing Day 2005.
This gave shareholders a positive 5.8 per cent TSR (total shareholder return). That's the total over the four years, not per year as I incorrectly wrote in haste yesterday. This compared to a 19.5 per cent negative TSR for Packer's media peer group and an even worse 26.9 per cent negative TSR for the gaming peer group.
The reason was, of course, the spectacular sale of the Nine Network for $5.5 billion - netting him $4.5 billion after the $1 billion he had to reinvest in the network and subsequently lose.
There is just no way to describe this other than as a spectacular coup, spectacularly timed - late in 2006, just as the subprime crisis was starting its slow bubble towards the surface in the US.
Even if you set off the $1.5 billion he would lose in the US against the $4.5 billion, the 'net' was still $3 billion. That's still almost as much as Kerry Stokes got for following him in selling half the Seven Network, just as it was toppling Nine from its long dominance of ratings and advertising dollars.
In short, Packer sold a rapidly depreciating asset beyond the top of the market, exploiting the global financial whiz-kiddery in its dying days! And the deal was even better than it looked.
Why? Because Packer kept the key stakes in Foxtel (25 per cent) and Fox Sports (50 per cent).
Two things are significant about that. It's at least another $1 billion of value - depending how the NBN arm-wrestle plays out, maybe even $2 billion. So his net value out of media was really more like $5.5 billion to $6.5 billion. Secondly, he very deliberately kept what he sees as the 21st century media business. He thinks Foxtel/Fox Sports is the best media business in Australia.
So why did he bend over and sue for peace with the other Kerry; indeed letting him, albeit by proxy, into his media company's boardroom? And did it signify he had a loose affiliation even with Foxtel?
Actually, no. What tended to slip under the radar with the 'mogul peace deal' is that Stokes agreed to 'stand-still' - to not buy any more shares in Packer's Consolidated Media for a year. But Packer did not.
Following the ConsMedia buyback, Stokes' stake goes to 22 per cent, while Packer's will go to a tick over 45 per cent.
Stokes can't buy any more for 12 months. But Packer can and will. He can buy 3 per cent every six months. As the time expires on Stokes' standstill, Packer will move above 50.1 per cent and unchallengable control.
There is no way he will sell out of his remaining - 21st century - media. Unless Stokes or somebody else (it would have to be from another planet) offers him a very silly price. Then the cold-blooded mathematical Packer would kick in.
2 There is no way he is going to 'share' Foxtel with Stokes. He has handcuffed Stokes and in 12 months he could resume hostilities from a position of unchallengable ascendency.
In short, he has moved to 'correct' the mistake he made when he opened the front door by 'selling out' of Nine without bolting the back door to the ConsMedia register. And he's doing, incidentally, the same thing at Crown. He's already started 'creeping' to the same 50.1 per cent.
In short also, the simple fact is that his media plays have been an unqualified success. He has created extraordinary value - in the form of very real (that is, Aussie) dollars.
He has paid for his US mistakes. And he has kept his position in 21st century media, alongside the businessman he most admires and the country's, for the moment, dominant telco.
That leaves judgment on his big 21st century play: China. It is as simplistic to judge that on the basis of what might be happening in Macau this year, as it would be to conclude that the lower prices BHP And Rio were getting this year 'proved' China was a dud for them.
Yes, there might be indigestion in Macau; yes, the Chinese government can play games with visas.
But Macau is very different to Las Vegas. It's the only game in town - until, if, the Chinese allow it in Beijing and Shanghai. And it sits next to 1.3 billion people with rising incomes; against Vegas with 300 million people with falling incomes. (Credit: Herald Sun)
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Media Man Australia - Greg Tingle comments
Mr Packer has investments in a range of business verticals... old media, new media and the hotel, casino and resort sector (both in Australia and abroad), thus spreading risk
Crown Casino is Australia's most profitable casino
Mr Packer and his team appear to have played "politics" correctly with both the Australian / Victorian government as well as the Chinese government
New media investments that Mr Packer's Publishing and Broadcasting Limited (PBL) made that performed impressively include Seek, Carsales, and Foxtel
Gambling is one form of entertainment. Crown Casino, Burswood Entertainment Centre and City Of Dreams have been successful in securing numerous world class entertainment acts, performing artists and the like. Crown Casino and City Of Dreams have developed into major tourist destinations and provide substantial employment
Crown Limited is still in business, while many competitors on a global scale went out of business or are currently going into bankruptcy
Media Man Australia director and founder, Greg Tingle, owns shares in Crown Limited
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