The Sydney Morning Herald said that more than 50 images show Packer and David Gyngell throwing and receiving punches and wrestling on the ground on Sunday afternoon, sparking a bidding war for the photos.
"We have been friends for 35 years and still are," the pair said in a joint statement after the news broke.
"In that time we have had our fair share of ups and downs. We respect each other and neither of us will be commenting further."
Bondi resident Chris Walker, who says he witnessed the incident, tweeted about a "massive street fight" outside Packer's multi-million dollar home.
"Holy crap, big street fight outside my house ... Not thugs, James Packer ... And some other angry bloke going toe-to-toe - total brawl ... Wow"," he said.
"Packer packered a punch but copped a couple of hits straight to the jaw... Then they all fell on the concrete fence and I think the other guy broke his face.
"They were looking for teeth after he left ... I was so thrilled, with a camera in my hand I didn't take a pic," he added.
Another witness told The Australian newspaper: "It was like two mad dogs going at each other's throats."
The Sydney Daily Telegraph said "a bidding war has broken out over sensational photos" showing the altercation between Packer and Gyngell, who is head of Nine Entertainment Group.
The Sydney Morning Herald said Gyngell was waiting outside Packer's house as the casino mogul was chauffeured home after arriving aboard his private jet at Sydney Airport.
It cited witnesses saying no pleasantries were exchanged when Packer saw him, but rather a flurry of profanities broke out before punches started flying. They were eventually pulled apart by a bodyguard, the newspaper said.
Reports said the pair's life-long friendship soured after Packer and his second wife, Erica, separated six months ago.
The son of the late media baron Kerry Packer, the 46-year-old is one of Australia's wealthiest people with a personal fortune estimated at Aus$6 billion.
Since his father's death in 2005, he has moved the family business away from its traditional media operations and focused on creating Crown, a worldwide gambling empire.