Packer set to become a Hollywood star

There are plenty of success stories of actors who have gone to Hollywood poor and unknown and come out rich and famous. According to a report in the Australian Financial Review (AFR), the lure of those bright lights isn’t just attracting those who want to ‘make it,’ it appears that Hollywood has also attracted the interest of Australian billionaire Mr James Packer, who is keen to get a slice of the profits too.

The AFR reports that Mr Packer has joined forces with successful director Brett Ratner and investment firm Dune Capital Management to create a $450 million vehicle to co-finance movies produced by Warner Brothers.

The attraction for Mr Packer to the co-financing deal is believed to be similar investment theme to that behind his casino venues Crown (ASX: CWN) and Melco Crown (NASDAQ: MPEL) – the leverage these businesses provide to the entertainment dollar and the Asian market.

It’s an investment theme fellow billionaire Mr Rupert Murdoch’s Twenty-First Century Fox (ASX: FOX) knows well. Fox’s filmed entertainment division is one of the world’s largest producers and distributors of movies. For the year ended June 2013, Fox reported revenues of US$8.6 billion and earnings of US$1.3 billion from the film segment.

Mr Packer’s new venture will also be competing with Village Roadshow (ASX: VRL) which has interests in theme parks, cinema exhibition and film distribution. The film distribution division which benefited last year from the release of The Great Gatsby, reported revenues for the financial year to June 2013 of $358 million and net profit before tax of $38 million.

Foolish takeaway

Despite a few well publicised mistakes, Mr Packer has proven time and again a canny ability to pick his investments well, the profitable sales of his holdings in SEEK (ASX: SEK) and Magellan Financial Group (ASX: MFG) being recent examples. While investors may not have the opportunity to invest alongside him in this instance, taking the insights from his thinking and discovering other ways to invest in the Asian entertainment theme is possible.

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Motley Fool contributor Tim McArthur owns shares in Twenty-First Century Fox.

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