The legendary Kerry Packer lost a big chunk of his fortune at America's gambling tables. His son, James, has hit the jackpot by owning the casinos. Now he's rolling the dice on Hollywood
Slumped in white oversize chairs in an enormous suite at the Hotel Bel-Air in Los Angeles, Australian casino billionaire James Packer and Hollywood movie director Brett Ratner are exhausted. They look like two hungover frat boys after a hard night—but these guys haven’t been partying. They’re jet-lagged after visiting Russell Crowe’s film set in South Australia, watching Chinese tennis star Li Na win the women’s Australian Open in Melbourne and toe-touching in the Philippines to open Asia’s first Nobu restaurant at a new casino resort in Manila.
It sounds like a pleasure cruise from Packer’s earlier life as the polo-playing, jet-setting “Jamie”, son of the late media mogul Kerry Packer. In fact, it’s all business. Li Na is an “ambassador” for Packer’s flagship Crown Casino, which spreads across two city blocks on the banks of Melbourne’s Yarra River. The Manila resort is Packer’s first major casino foray outside of Australia and Macau. And Russell Crowe’s directorial debut, The Water Diviner, is financed by Packer and Ratner’s new Los Angeles-based film company, RatPac Entertainment, a Sinatra-inflected portmanteau of the two men’s surnames.
At 46, Packer is finally emerging from his father’s long shadow to come into his own as Australia’s second-richest person, with an estimated fortune of $6.5 billion. Sure, there are remnants of the flashy playboy lifestyle, including supermodel girlfriend Miranda Kerr, whose three-year marriage to English actor Orlando Bloom ended in October. (Packer split from his second wife, pop singer and model Erica Packer, née Baxter, in September, just weeks after the family moved into their Sydney mansion following a reported $35 million renovation.) By and large, however, Packer is increasingly regarded as a serious and successful businessman in his own right. He also has three children, aged 18 months to 5 years, who now live with Erica in Los Angeles, so he’s spending plenty of time on America’s West Coast.
“I had a marriage breakdown last year,” he says, after giving daughter Indigo, 5, a big snuggle before she trots of with her nanny to bed. “The last thing I think I am is perfect. I’m just trying to do the best job I can. I’m trying to be the best father I can to my kids. I’m trying to do the best job I can running my business.”
It’s been a bumpy ride. When Kerry Packer died in 2005 at age 68, his only son inherited a $5 billion fortune, mainly tied up in Australian magazines and television. At age 38, James Packer, who had been caretaking the family’s sprawling businesses for several years as his father’s health failed, was in full control. He moved quickly to reshape the Packer empire, selling most of his father’s beloved media properties to Hong Kong-based private equity firm CVC Asia Pacific for $4 billion in two deals across 2006 and 2007. The timing was perfect: He got out just as the internet began decimating traditional media’s revenue and profits.
Then he almost blew it. Packer plowed a big chunk of the cash from the CVC deal into casinos in Las Vegas, Pennsylvania and Canada, just before the global credit crunch. “I lost a bunch of money in America because of the financial crisis,” he says. Estimates of his losses go as high as $2.6 billion—roughly half of his fortune—and plenty were lining up to write his business obituary. Those losses included writedowns on investments in Fontainebleau Resorts, Station Casinos and Harrah’s (all in Las Vegas), as well as an ambitious but abandoned plan to build Crown Las Vegas.
Was he worried that the debacle would destroy three generations of Packer wealth creation? “I don’t want to answer that.” He will, however, share the biggest lesson he learned from that dark period. “Don’t be too leveraged—our balance sheet is now much more conservative than it was in 2008,” he says.
“I’ve now got more of my money in China than anywhere else, more probably than in Australia,” he says. His private company, Consolidated Press Holdings, owns a fraction over 50 percent of Crown Resorts, one of Australia’s top-performing stocks last year, leaping $3 billion in market capitalisation to $11 billion. What has the market excited is Crown’s 33.7 percent stake in Melco Crown Entertainment, a joint venture run by Lawrence Ho, the son of Macau casino tycoon Stanley Ho. It is Melco that has taken Packer into Macau, where the pair are opening a third casino in mid-2015, and also into the Philippines, where City of Dreams Manila opens later this year. Japan, too, is on the agenda if casinos are legalised before the 2020 Tokyo Olympic Games. Outside of the Melco joint venture, Crown owns casinos in Melbourne, Perth and London, and has approvals for huge casino resorts in Sydney and Colombo, Sri Lanka.
“Trust” is a word that Ratner also uses to describe his relationship with Packer. “I know he predominantly bets on the person,” says Ratner, who directed the Rush Hour film series and X-Men 3: The Last Stand. “His belief in Lawrence Ho and, of course, myself gives his businesses the confidence to excel.”
(This story appears in the 04 April, 2014 issue of Forbes India. To visit our Archives, click here.)