More reports today in the AFR of the impending reshuffle at PBL Media which will see James Packer sell down his effective stake in the Nine Network and ACP magazines to around 5 per cent.

Packer’s PBL (and the about to become Consolidated Media) will cut the direct stake in PBL Media to 25 per cent. Packer ill own a 38 per cent stake in Cons Media through the family company, Consolidated press (which will also own 38 per cent of the other arm of PBL, the Crown gambling business).

The sale makes you wonder why Packer doesn’t simply reshuffle things and sell all of Cons Media to CVC: it would make for a more rational structure and one capable of supporting debt and doing deals.

Brokers estimate Packer will raise $500 million from the sale. Will he keep in Cons Media, because at the moment it has no cashflow apart from a bit from Ticketek, which makes around $5 to $7 million in net earnings, the only wholly-owned asset Cons Media has.

Cons Media has estimated head office costs of $10 million a year with the costs of John Alexander and other executives on the board. Because it has no significant problems, most brokers say that at the moment it is a loss maker before it equity accounts its 50 per cent stake in Premier Media (Fox Sports) and its 27 per cent stake in seek.

It gets dividends from both and the cash from Fox Sports is available to Cons Media but in accounting terms Packer’s advisers have told him it can’t consolidate either Seek, Fox Sports or the 25 per cent of Foxtel which has yet to start paying dividends and won’t this year because of the $45 million (and rising) cost of the AFL contract. Consolidating them would have given Cons Media a book keeping version of cash flow and profits.

Apart from Ticketek, it has nothing.

The AFR reports that Packer told people that he didn’t want to put the Fox Sports, Foxtel assets into PBL Media.

That would apply to the 27 per cent of Seek because it is a PBL investment but News Ltd has pre-emptive rights over the 50% of Premier Media/Fox Sports and the 25% of Foxtel and wouldn’t give its approval for them to be folded into PBL Media (which CVC Asia though was happening).

But News has given its approval for them to be included in the Cons Media reshuffle.

Cons Media is selling the 50 per cent of Hoyts Cinemas PBL bought from Consolidated Press (along with West Australian Newspapers when Ian Law was CEO) and the stake in the New Regency film studio business in Hollywood. News Corp is thought to be the buyer of that.

That could raise upwards of $350 million for the company but that is not enough to do deals and make large acquisitions because there’s no cash and earnings with which to repay debt.

Cons Media will effectively own 25 per cent of PBL Media and that could quite easily be sold to CVC, completing the buyout. That would make Cons Media a far cleaner business and so long as it then managed to buy a cash and profit producing business, it can grow.

On benefit of the sell down will be to remove the likes of John Alexander, Chris Anderson and James packer from the day to day control of the Nine Network.

That will make it much easier for Nine to attract a TV executive with talent and ability to run things.

It would make it far easier for David Gyngell to return home to Nine after his contract with Granada’s North American business finishes in December.

That would be one of the upsides of a messy and corporate restructuring which has some way to go.