Rumours that James Packer would sell Channel Nine were around before Kerry Packer died. The latest one, reported today in The Sydney Morning Herald, has a bunch of private equiteers taking ACP, Nine and Ninemsn off Packer’s hands but leaving PBL with its cable and internet advertising interests.

The problem with the story is finding a private equity house silly enough to do it.

Private equity firms are supposed to make money by buying an asset that can be rapidly improved with a bit of cost cutting, some non-core asset sales and a lick of fresh paint so it can be quickly flogged off again. It’s very hard to see how that model can be applied to the suggested PBL businesses.

ACP could certainly do with the paint, but it’s already been squeezed extremely hard by the John Alexander regime. Aside from the cosseting of a few JA favourites, there’s precious little left to cut.

As for Channel Nine, corporate memory is being rapidly lost but there should still be a couple of investment bankers around who remember the 1980s and what happens when people without any understanding of television try to run it – and not just blow-hards like Skase and Bond. Ask Frank Lowy. Or you could just study what’s happened at Nine since Alexander took it over or the way Seven was going nowhere until Team Leckie rolled in.

Which leaves Ninemsn – an animal that exists primarily as a synergy vehicle with the ACP and Nine stables. Hardly the stuff private equity multi-millions are made of.

In time our market will continue to heat up to the extent that brains are cooked and people will do crazy things with their money, but right now it’s difficult to imagine Packer being prepared to sell his media assets cheaply enough to leave a decent profit in them for the next guy, or that there is a “next guy” hanging around with the expertise to manage a quick makeover.

The siren song, though, could be the dream or nightmare suggested by Senator Coonan’s miserable efforts – a combination of Fairfax and the aforementioned PBL assets. The politics would be less embarrassing to Howard if it was done via a private equity vehicle in which PBL just happens to have a stake as part of the payment for its assets. And someone would have to provide a little media management expertise, of course.