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Sunday, December 12, 2010

James Packer Crown Casino; Set For a Ten In 2011, by Greg Tingle - 13th December 2010

G'day punters, casino and gambling millionaires and billionaires, super whales, journalists, ... one and all. Today we have the run down on James Packer's stellar performance in 2010, with both his Crown Limited and Ten Holdings, and how 2011 looks like it will be a banner year for the Aussie casino king from the 'World Of Entertainment', as the tag line goes. Media Man and Gambling911 with this special report...

2010 was the year that 'Our James' decided he wanted to be known as a 'media king' of sorts again, after apparently being happy to fly the almost exclusive 'casino king' flag for a number of years, with a number of analysts stating he wouldn't be back to the mainstream media business - they were wrong.

Packer also got his sweet revenge against a number of "attack journalism" types, and then of course there was that book, an unofficial biography, that suggested more than once JP was finished...and could loose his shirt. Jesus, was that off the mark.

Many leading media and gambling analysts think Packer made about 5 key smart moves in 2010. Getting rid of the casino deal in Las Vegas, shaking up his board of directors, green lighting massive casino revamps to Crown Casino and Burswood, playing his politics right (both Melbourne and with the Australian Communications and Media Authority), and buying into Network Ten. Oh, the PR with mate Shane "Warnie" Warne hasn't hurt either, with news media been generally being much more fair and balanced to 'Our James' these days.

Packer looks in a fantastic position to increase his key gambling - and media - new media investments in 2011. He sure laid the groundwork this year and has enjoyed a sterling run, hitting a 6 with his buy into Ten last month, a move duplicated by Australia's riches woman, 'Our Gina', only in the last fortnight.

The multi billionaire's private investment company, Consolidated Press Holdings, posting yet another solid year of dividend and profit growth.

According to numbers circulated in the media, ConsPress's portfolio of gaming, media, retail and financial services investments generated a 9% jump in net profit for 2009-10 to $167.5 million, and overall revenue was up 7% to $432.3m.

Not on paper a super spectacular result, but when you consider that so many gambling and media companies went out of business this year, and the year before, it is a testament to the smarts of the man, and his world class team. You just have to give the devil his due.

One may argue that the best sign of JP's financial health are the dividends he receives from ConsPress, which leaped 33% to $74.4m thanks mainly to strong performances from the company's 2 main listed investments: a 43% stake holding in casino group Crown Limited and 50% of pay-television company Consolidated Media Holdings. Packer is likely think his Ten tele buy in will net him solid results next year also. We're banking on it, with our modest purchase of shares last last week.

Insiders will know that Packer does not get a salary from his positions as executive chairman of Crown and deputy chairman of Consolidated Media, dividends from the family investment vehicle...which he inherited the old fashioned way from his legendary father Kerry...represent a major source of remuneration.

Packer has been sharing the ConsPress chief executive role with long-term investment adviser Ashok Jacob. A bit of an insider joke is that Ashok hasn't given any nasty "a shocks" to the system. Jacob is one smart cookie, and perhaps in the top ten of the world's best at what he does. What does he do? Well, he helps make a lot of money for one.

ConsPress's main investments decisions last financial year involved outlaying $204.8m listing its Crown stake and $54.4m increasing its ConsMedia shareholding. Packer's brilliant $150m-plus raid on Ten Network Holdings took place after the accounts were signed off for the year. Divestments included the sale of $9.1m worth of Challenger Financial Services Group stock, which insiders say his was pretty luke warm on for a few years and is pleased to turn them into money.

Not many insiders, nor punters, know that ConsPress is actually owned by Bahamas-based entities and files unconsolidated accounts with the corporate regulator. It does not provide a complete picture of Packer's investment empire. Ok, you want an example? We understand that roughly 40% of the dividend income earned from the Crown and ConsMedia stakes are represented in the ConsPress results. Are you still with us. It gets easier to follow.

Packer has taken a higher public - media profile since buying into Ten in late October and the ConsPress numbers confirm he has come out of the global financial crisis in a more than solid financial position. In recent months, he addressed a tribute dinner for legendary broadcaster Alan Jones and made an in person appearance at the final shareholder meeting for Harold Mitchell's Mitchell Communication Group For those who don't know, Mitchell is every bit the media and advertising industry legend in Australia that John "Singo" Singleton is. Packer knows he can't stop media coverage about him, internet, TV, print... you name it, so he was now rather embraced it, and is telling his side of the story to media, and the news is usually great! Way to go Packer. Sock it too em, and good on him for letter match Warne interview him on the hit tele show 'Warne', broadcast on Network Nine no less. That a sport mate.

ConsMedia bean counter director Michael Johnston advised the strong result was largely a reflection of the solid performance of Crown and ConsMedia. But he also was quick to point out that privately held businesses, like as hedge fund group Ellerston Capital, Pretty Girl Fashion (owner of Rockmans and Table Eight), Skifields (NSW and Victoria) and the Jurlique cosmetics business had done well. Oh, Media Man women have enjoyed Jurlique gifts over the years. The Bondi Beach outlet, below a certain legends beach pad, is our favorite, and media and celebs will be spending a few dollars there this Christmas we understand.

Ok, back to business and less colour, but you have to think of the ladies too, don't you Gina.

"Each of our trading businesses continued to perform pretty well Ellerston, as you would expect for a fund manager, took a dip during the GFC, but it was the only operating business that really suffered. Certainly, all of them have performed since" Johnston shared.

He went on with "debt reduction has been a focus". He advised ConsPress had been able to purchase more equity in Crown and ConsMedia without affecting debt levels. That's impressive.

"We sold Challenger and that freed up capital through the year, so we didn't have to borrow money to put further equity into the investments we were focusing on. I think that we do like to be relatively conservative. We like to maintain what we consider is a very manageable level of debt. You've only got to live through one or two sharemarket corrections to realise you don't want to be overgeared."

Media Man Media Move Of The Year 2010...

Packer made an exciting and well timed return to free-to-air tele by snatching an 18% stake in Ten in a shock sharemarket raid. Packer, who concluded his family's half-century association with Channel Nine in 2008, decided that maybe tel wasn't such a bad investment idea after all. It lifted his profile, did wonders for PR, and spread his risk, with gambling being a bit of a whipping boy for two of so agenda driven MP's in the Aussie government. Smart readers know who they are, so we don't drag down this article by repeating their names here. The Ten investment triggered a series of corporate moves at the TV company including the resignation of long-term executive chairman Nick Falloon, feeling a bit pushed out, and the emergence of mining magnate Gina Rinehart, now a Media Man fav, as a 10% shareholder. On, last week Gina went on to buy about 2% in our friends at Fairfax Media. JP proceeded on to sell half his stake to mate and associate Lachlan Murdoch, while WIN TV top dog Bruce Gordon raised his holding to 14%.

Packer wins Media Man 'Australian Casino Operator Of The Year' and 'Australian Media Tycoon Of The Year' award. His mate, David Gyngell is runner up for the media tycoon award, and Tabcorp wins the Australian casino 'most improved' and 'encouragement' award. Oh, PartyGaming wins Media Man 'Online Casino Operator Of The Year' award, with b2b's with Packer's Crown Casino playing a role, and Packer's mate, Richard Branson, wins 'Media Man Gambling and Media Tycoon' of the year on a global scale. Nine Entertainment Co wins 'Australian Media Company Most Likely To Make An Impact In 2011' award, but rounding off, Packer also wins Media Man 'Best And Fairest 2010'. What a year it was. Congrats to all that played hard, and an even bigger congrats to those who placed and won. Just to be in business these days is a sign of a winner, so hats off and cheers to all of you maties.

Crown Limited shares finished off at $8.120

Ted Holdings shares finished off at $1.475

Awards...

Last month was also a big month for casino awards.

PartyGaming's PartyCasino has also come back with seconds, picking up another Media Man 'Online Casino Of The Month Award' for November, and also the parent company, PartyGaming, picked up the prestigious EGR Slots Operator Of The Year Award ...Some other top picks of ours who picked up awards at the EGR night of nights were:
Virgin Games (Affiliate Programme)
Betfair (Innovation, Mobile Operator and UK Sports Betting Operator)
Bwin (European Sports Betting Operator
PKR (Poker Operator)

Australian Land Based Casino Of The Month: Crown Casino, Runner Up: Star City

Oh, we almost forgot...Media Man and Casino News Media 'Casino Babe Of The Month': Jenny Woo, 'Poker Babe': Kara Scott, 'Gambling Babe Personality': Pamela Anderson.

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Wrap Up...

Readers... er, punters, how did you like our report? Tell us in the forum.

If you have a bet, please bet with your head, not over it, and for God's sake, have fun.

*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, Ten Network Holdings and Virgin

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