James Packer’s Crown gambling operation is now also in the finance business, thanks to an arrangement with Arnon Milchan, a long time friend of Kerry Packer, who has purchased 25% of TV and film studio Monarchy Enterprise from Crown for just over $204 million (around $US189 million). Monarchy owns New Regency Productions.

The payment isn’t a one off injection: Crown and Milchan have struck a deal to pay the money over five years. Crown said it had received the first payment of $US33.2 million

Milchan’s repayments will be secured for Crown by a charge over the shares which have been sold. That’s just like an old fashioned finance company, or even, dare we say it, a margin call. The holding in Monarchy was originally an asset of PBL but Crown kept it in the split late last year.

Crown said that “Crown’s predecessor, PBL received distributions from its share investment in Monarchy in 2004 and 2005 totalling approximately US$137 million which, when the purchase price of US$189.4 million (including interest) is paid in full, means that Crown/PBL will have received a total of approximately US$326.4 million from its investment in Monarchy.

“The sale of Crown’s interest in the New Regency business was foreshadowed in the PBL Scheme Booklet as part of the demerger of the gaming and media businesses of Publishing and Broadcasting Limited.”

That shows the cynical nature of the split; Packer has pushed all the non-control and low-value assets into Cons Media (the stakes in Foxtel and Premier Media group) are effectively controlled by News Ltd and the 25% of PBL media is worthless because of the debt. CVC is effectively the only buyer of that 25%, but that can’t happen until next year.

Packer has shown by white-anting Lachlan Murdoch’s takeover attempt for Cons Media, that he is a seller of his 38% stake in the media grab bag at $4.80 a share. That would raise more cash to finance Crown’s ambitions.

Crown shares rose 10 cents on the news to $10.35 this morning.