Has James Packer had a falling out with old pal Lachlan Murdoch? Is he trying to prevent a fresh falling out with Seven Network boss Kerry Stokes? Did he just step down to avoid being forced to do so by ACCC chief Graeme Samuel?
These are just some of the questions swirling around Australia’s media sector today after Packer suddenly stepped down from the Ten Network board yesterday, just months after he launched a $250 million share raid on the company and started pushing for major changes.
Packer offered no motive for his resignation, but that hasn’t stopped the rumour mill from going into overdrive.
The basis of the story going around is that Packer stepped down over Murdoch’s decision to appoint Seven Network executive James Warburton to the position of chief executive.
Packer is apparently unhappy because he had an informal truce or “non-compete” agreement with Seven Group boss Kerry Stokes. By resigning, so the story goes, Packer shows Stokes he is a man of his word, although how serious his falling out with Murdoch is remains to be seen.
The resignation does shine a light on the complex relationships between the Packer, Murdoch and Stokes clans.
While James Packer, Lachlan Murdoch and Kerry Stokes son’ Ryan Stokes are said to be firm friends, Packer has had his run-ins with both families.
For example, his relationship with Stokes and Seven is famously stormy. While the Packer and Stokes families competed for many years as the bosses of the Nine and Seven Networks, this battle effectively ended when James Packer sold Nine Media Group to private equity in October 2006.
However, tensions resurfaced in July 2009 when Seven Group grabbed a stake in Packer’s listed media group, Consolidated Media Holdings. But in September 2009, Stokes and Packer came to an agreement – Packer gave Stokes two seats on the ConsMedia board in exchange for a promise that Seven would not buy any more shares.
But despite this agreement, tensions appeared to linger. In October 2009, Packer had a very public confrontation with Seven Media Group boss David Leckie, apparently over Seven’s coverage of the Packer family.
However, the two moguls were apparently close enough to spend time late last year skiing at Stokes’ getaway at Colorado.
Packer and Murdoch also have a long history. The pair famously invested alongside each other in the disastrous One.Tel business, which went bust. Then in 2008, they made an aborted attempt to take ConsMedia private in a $3.3 billion deal.
Their joint investment in Ten Network was the moguls’ first deal together in two years. It remains to be seen whether the disagreement over the appointment of James Warburton is temporary or a more serious falling out.
But the resignation of Packer – and the apparent reasons surrounding it – does show just how close the men who control Australia’s media sector are.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
