James Packer’s fortune rises as Crown Resorts’ fortunes improve
It’s been a tough year for James Packer, but his net worth increased $200 million since October’s Financial Review Rich List.
The Financial Review reports that despite Packer’s main private company plunging to a $402 million loss in financial 2020, his overall wealth has increased thanks to a recovery in Crown Resorts’ share price.
Consolidated Press Holdings houses Packer’s 37 per cent stake in Crown Resorts, whose share price had fallen from pre-COVID levels about $12 to just over $9 when the Rich List was ruled off in the first week of September.
That underpinned a reversal of fortunes at CPH, which according to fiscal 2020 accounts lodged with the corporate regulator on Monday, swung to a $401 million pre-tax loss compared with the year-earlier $70 million profit and a $402 million gross loss compared with 2019’s $45.6 million after-tax profit.
Crown scrapped its final dividend in August after being forced to close its casinos in Melbourne and Perth at the height of the pandemic.
This contributed to a lower dividend payout of $127 million unfranked from CPH to Mr Packer in the year ended June 30, down from the year-earlier $140 million unfranked.
Also weighing on the share price was the NSW Independent Liquor and Gaming Authority inquiry into Crown Resort’s suitability to hold a licence for its Sydney Barangaroo high-roller casino, whose opening has been delayed at least until the inquiry’s report is complete in February.
Despite the lingering uncertainty, the reopening of Crown’s other casinos has helped its share price recover to $9.75 by 1pm on Tuesday.
That is enough to add $200 million to Mr Packer’s Rich List fortune of $4.69 billion, which had dropped from 2019’s $4.9 billion because CPH’s expected poor performance from Crown’s slump had already been factored in.
Total assets at CPH, which only represents part of Mr Packer’s empire, rose to $8.83 billion in financial 2020 from the year-earlier $8.01 billion.
However, CPH’s net assets position was sliced to $3.88 billion from $4.53 billion because of a ramp-up in interest-bearing liabilities to $4.88 billion from the year-earlier $3.41 billion.
Because all of these borrowings are owed to other controlled entities within the broader CPH group, they do not impact Mr Packer’s overall wealth.
While Mr Packer resigned most of his directorships in 2019 as he battled mental health problems, he remains a director of CPH’s ultimate parent, the Bahamas-domiciled Consolidated Press International Holdings.
The $2.5 billion Crown Resorts stake dominates CPH’s asset base, but it also houses a grab bag of other assets, including a one-third share in the South Sydney Rabbitohs rugby league team, a 40 per cent stake in The Upside, the yoga pants business of his first wife Jodhi Meares, and interests in peer-to-peer lender SocietyOne and the venture capital funds of Paul Bassatt’s Square Peg Capital.
Packer distances himself from junket trade
Crown Resorts’ major shareholder James Packer had a “rare and superficial” relationship with Asian junket operators.
That is what the New South Wales Independent Liquor and Gaming Authority probe heard in November during closing submissions to determine whether or not Crown is suitable to hold a casino licence in NSW.
Barrister Noel Hutley, acting for Mr Packer and his private investment company Consolidated Press Holdings, said the billionaire’s dealings with junket operators were only to build rapport to help C brown increase its market share in the high roller gaming sector.
It has been suggested Crown’s junket partners had links to organised crime in Hong Kong and Macau and laundered huge amounts of money at its Melbourne and Perth casinos.
It has also been suggested by Commissioner Patricia Bergin that Mr Packer, despite resigning from the Crown board in 2018, was the driving force behind the company’s push to lure more VIP gamblers to the venues.
“The contention that Mr Packer and CPH had some overbearing influence over the affairs of Crown Resorts is simply not supported by the evidence,” Mr Hutley said.
He asserted it could not be said that any influence Mr Packer had on the company rendered Crown unsuitable to hold the licence for its new $2.2 billion development in Sydney’s harbourside, which is slated to open next month but could be delayed, with Ms Bergin to hand down her decision in February.
“In addition, there is no evidence that Mr Packer had any adverse impact on Crown Resorts or the public interest, and in fact…Crown and its shareholders had benefited from the involvement of Mr Packer and CPH over many years,” Mr Hutley said.
Counsel assisting Adam Bell has previously urged the commissioner to recommend to ILGA that it reconsiders its approval of Mr Packer as a “close associate of the licensee,” having regard to threatening emails he sent to an unnamed businessman in 2015 around privatising Crown.