The House of Packer

Publicity-shy media magnate James Packer celebrated his 40th birthday last month in private with his new wife ex-model Erica Baxter. Packer inherited the fortune of his father Kerry who died in December 2005 and is the head of the privately run Publishing and Broadcasting Limited (PBL) which has interests in Australia’s Channel Nine, Australian Consolidated Press, Sky News, Ticketek, and Crown Casino. Reputedly worth about $5 billion, Packer has divested much of his family’s long-standing interest in Channel Nine by selling half of the media business to British private equity company CVC.

That move reversed 80 years of dabbling in Australian media by the Packer family. The early path of the family is authoritatively traced in Bridget Griffen-Foley’s “The House of Packer: The Making of a Media Empire”. The Packer family came from Reading in Berkshire, UK. Frederick Packer migrated to Hobart in 1852 where he became organist at St David’s Anglican Cathedral. His youngest son Robert Clyde (known as RC) was born in 1879. In 1900, RC Packer joined the Tasmanian news as a cadet journalist. After two years he was drawn to the mainland where he joined the Dubbo Liberal and later went further north to the Townsville Daily Bulletin.

Finally he got a job in Sydney with the Sunday Times where he worked his way up to editor before joining the Sunday Sun. He formed a partnership with Sydney mayor James Joynton Smith and journalist Claude McKay to found the successful “Smith’s Weekly”. With the money they made, they launched the Daily Guardian in 1923 where RC’s eldest son Douglas Frank Hewson Packer (known as Frank) got his first job in the industry. Frank Packer slowly made his way up his father's organisation working in various facets of the business. His business acumen was recognised early and he was appointed advertising director in 1924.

In 1924 RC brought journalist George Warnecke back from London. Packer made him chief sub-editor of the Guardian and the two men struck up a strong bond based on similar ideas about journalism. Importantly, both had aspirations of ownership. They struck up a partnership with a third man Edward Granville “Red Ted” Theodore. A former miner, Red Ted was involved in union politics before winning a seat for Labor in the Queensland state parliament in 1909. He worked his way up to state premier in 1919. He resigned in 1925 and entered federal politics in the NSW seat of Herbert.

Theodore was looking for a newspaper sympathetic to his interests. In 1930 Hugh Denison bought out the Guardian group and the Packers acquired a significant shareholding in the new entity. RC Packer was appointed managing editor of the new group, called Associated Newspapers. Through Warnecke’s friendship with Theodore, they negotiated to take over the Australian Workers' Union's daily, the World. Instead of publishing it, they closed it down and began a new venture in a radically different direction: Australia’s first women’s newspaper.

Theodore immediate hit it off with RC’s son Frank. Theodore became a father figure to Frank Packer and saw something of his own dynamism in the younger man. Theodore was now an influential figure at the Guardian (renamed in 1931 to the Daily Telegraph). In 1933 Theodore, Frank Packer, and Warnecke began developing a proposal for a new publication called Australian Women’s Weekly. Warnecke had knowledge of English women’s magazines and all three men believed the women’s market was under-serviced in Australia.

Printed on newsprint in a newspaper format, the magazine cost twopence (a penny less than its competitors) and touted itself as “the biggest value in the world.” Packer hired high-profile contributors to the magazine including socialite Jessie Tait as fashion editor, novelist Louise Mack as social diarist and several other celebrities. It was an instant success and the first issue sold out a massive 120,000 copies, twice as big as they told advertisers. Packer, Warnecke and Theodore founded Australian Consolidated Press (ACP) and the Weekly was its crown jewel.

RC Packer died a year later and Frank Packer took his place on the board and inherited his father’s share portfolio. That same year he married Sydney socialite Gretel Joyce Bullmore who gave birth to their two sons within three years, Robert Clyde (known as Clyde) and Kerry Francis Bullmore. Packer’s wealth grew on the back of the phenomenal success of Australian Women’s Weekly. He now set about reviving the dormant Daily Telegraph.

In 1936 it was relaunched as a bright sassy broadsheet newspaper selling for 1 ½ d. It unashamedly had news of the growing film industry and a full six pages of sport. Its lively style would prove to be a major challenge to its rival, Fairfax paper Sydney Morning Herald. Fairfax general manager Rupert Henderson was forced to increase advertising rates, acquire a new plant and discontinued the evening edition in the face of the new challenge by Packer's upstart newspaper.

The Telegraph became a leading advocate of progress and modernity. It called for the introduction of outdoor cafes and beer gardens, more theatre, a lifting of censorship and an end to the six o’clock swill. It serialised HG Wells “Things to Come” and heralded the beginning of flights from London to Sydney. Under editor Sid Deamer the paper’s political stance was mild and did not follow a party line. Its sales rose from 110,000 in 1935 to 186,000 three years later.

In the World War II years, it campaigned for a national government and reacted strongly against government war censorship. Despite the shortage of newsprint, they launched the Sunday Telegraph in 1939. Australia had one of the worst reputations of allied countries for the stringency of wartime press restrictions and much of the war years were spent in a constant battle with the Department of Information. In 1944, the Telegraph was so frustrated with the censors that they printed articles with blank spaces. By doing this they had breached National Security Regulations and the police were ordered to stop distribution of these editions.

Frank Packer began to put his political stamp over his publications after the war. He had the Weekly denounce a 1949 miner’s strike as “a national disaster” and the Telegraph claimed that Australians would think hard before they would “give the socialists the power to create a socialistic State”. That year Menzies was elected and the Liberals would stay in power for the next 23 years. The Telegraph was in favour of Menzies' plan to outlaw the Communist Party saying it was a menace which “would not yield to any namby-pamby treatment”.

Packer then began preparing for the advent of television. In 1954 a parliamentary report recommended that ABC should run the national system and at least two commercial licences should be established in Sydney and Melbourne. Packer applied for a Sydney licence. He appeared before the committee to say television was ‘going to be a very important factor in building up the character of the nation’. They won one licence for Channel Nine and a Fairfax-Macquarie consortium won the other, Channel Seven. Packer constructed his TCN-9 headquarters at Willoughby and used his newspapers to launch an advertising frenzy for the new medium.

Station manager Bruce Gyngell (father of Nine’s current boss David) spoke the first words on Australian TV - "Good evening and welcome to television". Packer went on to acquire GTV-9 in Melbourne in 1960 for $3.8 million, giving Australia its first TV network - the Nine Network. Packer had little respect for the nature of the new medium. In the early days he twice had his Sydney staff interrupt normal programming so he could show the finish of a Sydney horserace to his dinner party guests.

In 1958, ACP launched the Observer, a fortnightly newspaper of ideas. In 1960, Packer purchased one of Australia’s oldest publications - the Bulletin, founded in 1880 by JF Archibald and John Haynes. This larrikin weekly appealed to rural workers and was known for its strident xenophobia. But it had lost significant circulation by 1959. Packer appointed Donald Horne to edit the magazine and merged it with the Observer in 1961. Horne modernised the layout and removed ‘Australia for the White Man’ from its masthead.

It was assumed Packer’s eldest son Clyde would inherit the business. Younger son Kerry suffered from polio as a youth and performed poorly at school. He began his working life at the bottom of the corporate ladder unloading newsprint, cleaning machines, filling ink drums and stacking newspapers. He was viewed as lazy and a gambler and his father decreed he was to be shown no favouritism. Kerry later quipped that he was fired so many times he lost count.

In 1972 Packer allowed his sons to negotiate the sale of the Telegraphs to Rupert Murdoch.They sold "the plant and plantation" for $15 million. Packer would now rely on his TV interests. His intervention to insist that Mike Willesee’s interview with then trade union boss Bob Hawke should not go to air, caused his son Clyde to quit in protest. Clyde resigned all his positions with Consolidated Press and the mantle passed to younger son Kerry.

Frank Packer died of a massive heart attack in 1974 leaving an estate valued at $1.34 million. Kerry Packer took over the reins. In 1976 Clyde sold his interests to Kerry for $4 million. One year later Kerry Packer started world series cricket. It was the beginning of a new empire and one that led to new heights undreamed of by his father. James Packer has inherited the billions of Kerry not the millions of Frank.