Vegas Legends: Kirk Kerkorian

Kirk Kerkorian

Kirk Kerkorian was born in Fresno, California to an immigrant Armenian couple in 1917. He grew up in the streets of Los Angeles. Dropping out of school in the eighth grade due to disciplinary problems.

In 1934 Kerkorian, 17 years old, convinced his parents to fake his birthdate to be eighteen, so that he and his brother could take a $ 30-a-month job with the Civilian Conservation Corps building camp trails.

In 1939, he scrounged up enough money for his first plane ride, and from that, he was hooked on flying. In exchange for flying lessons from pioneer aviator Pancho Barnes, he agreed to milk and look after her cattle.

He became a good pilot, gaining his commercial pilot’s certificate in six months.

Kerkorian learned that the British Royal Air Force was ferrying Canadian-built de Havilland Mosquitos over the North Atlantic to Scotland. So Kirk moved with his wife to Montreal. After training by the Royal Air Force, he began ferrying planes across the North Atlantic

With a captain’s rank in the RAF Transport Command. The fee was $1,000 per flight. In two and a half years with RAF Ferry Command, Kerkorian delivered 33 planes, logged thousands of hours, traveled to four continents, and flew his first four-engine plane.

In 1945, after the war, having saved most of his wages, Kerkorian spent $5,000 on an Army Air Force surplus five-seat, twin-engine Cessna so that he could go into the charter business. Making his first trip to Las Vegas in 1944.

In 1947, he combined his profits from his single plane charter business, as well as money from selling scrap plane parts he could find, a $15,000 Bank of America loan, and $5,000 from his sister Rose, Kirk paid $60,000 for a three-plane charter operation at Los Angeles Municipal Airport.

This was to become Trans International Airlines, a small air-charter service that flew Hollywood celebrities to Las Vegas for quickie marriages and divorces for $100 per person.

On one such flight, Kirk flew mobster Bugsy Siegel from his Los Angeles home to Las Vegas, where the mobster met with his East Coast “partners” – who were not exactly happy with the newly opened Flamingo casino’s profits – Bugsy returned to Los Angeles with Kirk. Two days later Bugsy Siegel was assassinated in a rain of bullets at his home

Kerkorian’s investments in airlines and in Las Vegas would often mirror the investments of fellow Las Vegas Strip pioneer and his archenemy, Howard Hughes. Kerkorian operated the airline until 1968 when he sold it for $104 million to the Transamerica Corporation.

Creating the Modern Las Vegas

In 1955 Kirk bought 1% of the new Dunes hotel for $50,000. Like many Vegas casinos, it was badly run, Shall we say “Mob ran? Kirk lost his $50,000 and claimed from then on “I learned then not to invest in a business that I didn’t run.”

In 1962, Kerkorian bought 80 acres in Las Vegas, across the Las Vegas Strip from the Flamingo, for $960,000. This purchase led to the building of Caesars Palace by Jay Sarno, who rented the land from Kerkorian.

Kirk received lease payments of $15,000 a month, 15% of the huge casino’s profits, and a suite in the flashy new resort hotel when it opened in 1966.

In 1967, he paid $5 million for 82 acres of land on Paradise Road, next to the Las Vegas Convention Center to build the $60 million, 30-story, 1,519-room International Hotel, which at the time was the largest hotel in the world.

The newspapers at the time noted the growing competition between Howard Hughes and Kirk Kerkorian: The Landmark Hotel owned by Howard Hughes and International Hotel owned by Kirk Kerkorian, opened within days of each other. While the Landmark experienced problems, the International thrived.

Credit was given to Kerkorian. Kerkorian could be seen at the International, talking with people, giving comps, and creating loyalty among the patrons. He also had the stars showcased at the resort, “easy” to reach by their fans, which created more loyalty. At the Landmark, few saw Hughes. Even though Hughes had top names, they were not accessible to their fans, and people would ultimately go over to the International to mingle with the stars and the owner. The patrons would ultimately spend their time, as well as their money, at Kirk Kerkorian’s International. (Ouch!)

The first two performers to appear at the hotel’s enormous Showroom Internationale were Barbra Streisand and Elvis Presley.

Presley brought in some 4,200 customers (and potential gamblers), every day, for 30 days straight! In doing so, he broke all attendance records in the county’s history.

Also in 1967, Kerkorian’s International Leisure bought the Flamingo Hotel for $13 million; eventually, both hotels were sold to the Hilton Hotels Corporation and were renamed the Las Vegas Hilton and the Flamingo Hilton, respectively.

Side note: Kirk often said that he purchased the Flamingo to use it as a place to train the employees who were going to work at the International.

In 1969, being tired of the Caesars casino connection to the mob, Kirk finally sold the land he was leasing to Caesars and made a nice little profit of $9 million!

In 1969, he purchased the Metro-Goldwyn-Mayer (MGM) movie studio.

In 1973, Kerkorian opened the original MGM Grand Hotel. Costing $130 million to build. Filling it with MGM studio memorabilia. It was larger than the Empire State Building and the largest hotel in the world at the time it was finished (again).

On November 21, 1980, the original MGM Grand burned in a fire that was one of the worst disasters in Las Vegas history. The Clark County Fire Department reported 84 deaths in the fire; there was 87 deaths total, including three which occurred later as a result of injuries sustained in the fire.

After only 8 months the MGM Grand reopened. Ironically, almost three months after the MGM fire, the Las Vegas Hilton caught fire, killing eight people.

In 1985, pinball machine maker and fitness chain operator Bally Manufacturing purchases the MGM Las Vegas and its sister property MGM Grand in Reno, Nevada for $550 million.

1987, Kerkorian purchased two of Howard Hughes’ old properties, the Sands and the Desert Inn.

Also in 1987, he created MGM Grand Air which was a luxury charter airline operation that catered to entertainers, sports franchises, and groups worldwide.

In 1989, Kerkorian sold the Sands to Sheldon Adelson and the Interface Group for $110 million.

MGM Grand Las Vegas

Also in 1989, he bought the Marina Hotel and Casino renaming it the MGM Marina.
He then built the MGM Grand. Never tearing down the Marina, just incorporating it as the front tower of the structure!

In 1993, ITT-Sheraton purchased the Desert Inn from Kerkorian’s Tracinda Corporation for $160 million.

On December 18, 1993, Kirk Kerkorian’s $1 billion, 5,005 room dream resort became a reality as the MGM Grand Hotel & Casino opened. It is the largest hotel in the United States.

At the time of its opening, the MGM Resort paid homage to MGM studio’s most beloved movie, The Wizard of Oz.

MGM Grand had an extensive Wizard of Oz theme, including the green “Emerald City” color of the building and the decorative use of Wizard of Oz memorabilia. After entering the casino’s main entrance, one would find themselves in the Oz Casino facing Emerald City. Dorothy, the Scarecrow, the Tin Man, and the Cowardly Lion were seen in front of the city.

The Emerald City attraction featured an elaborate yellow brick road walk-through, complete with the cornfield, apple orchard, and haunted forest, as well as audio-animatronic figures of Dorothy, the Scarecrow, the Tin Man, the Cowardly Lion, and the Wicked Witch of the West. It would end at the door of the city, leading inside for a performance of “The Wizard’s Secrets”.

The Wizard of Oz theme was removed in 1996. The emerald green glass is still its unique feature when looking from the Strip!

In January of 1997, MGM Grand Hotels and the Prima Dona Resorts opened the New York New York Hotel Casino right across the street from the MGM Grand. The property was owned by MGM Grand and the Prima Dona was the designer and operator.

In 1999, MGM Grand bought the Prima Dona Resorts for about $267.2 million in stock, making New York New York the sole property of MGM Grand Hotels.

On February 24, 2000, Kirk Kerkorian and MGM Grand Inc., made a $5.4 billion takeover offer to purchase Steve Wynn’s Mirage Resorts, Inc. About $3.28 billion in stock and cash. MGM would also assume Mirage Resort’s $2.1 billion debt.

The deal included the Mirage, Bellagio, and Treasure Island casino hotels, some of the most prestigious on the Strip.

Kirk Kerkorian would now control over 50% of the hotel business on the Las Vegas Strip as well as own 55% of MGM stock.

It is said that When Kirk’s lawyers insisted that he make Wynn sign a standard five-year non-competition agreement, Kirk refused to do it. He liked to keep Steve “in the game.”

Steve Wynn, visionary of the Mirage, walked away with $483 million from the sale!

In September of 2002, Forbes Magazine named Kirk Kerkorian number 32 on its wealthiest people list with $4.5 billion of net worth.

2004, Kirk Kerkorian was 84 years old and still making deals. MGM acquires Mandalay Bay Properties. (Circus Circus, Excalibur/Luxor & Mandalay Bay) for a total of $7.9 billion, including $3 billion in assumed debt.

In 2005, Kerkorian finally sells his last stake in MGM studios.

In 2008, Kerkorian’s net worth was $16.0 billion according to Forbes magazine, making him the 41st richest person in the world and the richest person in California at that time.

In 2009, following the completion of a $1 billion stock offering by MGM Mirage, Kerkorian and his Tracinda investment corporation, lost their majority ownership of the gaming company, dropping from 53.8 percent to 39 percent

By 2011, Kerkorian was among those hardest hits by the stock market recession as his net worth tumbled to $3.2 billion. In 2013 he was listed as the 412th richest person with a net worth of $3.9 billion

The Quiet Man

Kerkorian was known as a quiet man. Not exactly the las Vegas recluse like Howard Hughes, but he shunned the spotlight and the press. Never making speeches at the openings of his hotels.

Over the years, people have reported meeting Kerkorian at his resorts, sometimes he would be giving out comps, and other times, just chatting with people. Most thought the quiet, gracious man was maybe a casino manager or even a publicist. They were shocked to learn afterward that they just had a conversation with or received a comp from one of the Strip’s original visionaries!

Kerkorian had the clout to move mountains around Las Vegas (figuratively speaking), but in many ways, he was often content to stand in line waiting his turn – just like regular people. Like after selling the Sands for about $110 million, Kerkorian stopped by to pose for pictures with the new owners. Then walked outside to stand in line for a taxi behind about a dozen other people.

He had a penchant for expensive clothes (especially custom-made outfits by Italian designer Brioni), but drove relatively low-cost vehicles, such as a Pontiac Firebird, Jeep Grand Cherokee, and a Ford Taurus.

In September of 2002, Forbes named Kirk Kerkorian number 32 on its wealthiest people list with $4.5 billion of net worth.

Kerkorian was active in philanthropy through his charitable foundation, The Lincy Foundation, named after his daughters, Linda and Tracy. The foundation reportedly donated more than $1 billion, though Kerkorian never allowed anything to be named in his honor.

The Passing of a Legend

Kerkorian died in Beverly Hills, California on June 15, 2015, nine days after his 98th birthday. Those who knew him wept at his funeral, and those who did business deals with him always respected his brilliance and vision. Not bad for a man with an eighth-grade education!

Most of the $2 billion estate was left to charity, with a three-person committee left to distribute the funds within three years

Read Kirk’s Biography: The Gambler: How Penniless Dropout Kirk Kerkorian Became the Greatest Deal Maker in Capitalist History

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