Kirk Kerkorian

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Kirk Kerkorian
Born (1917-06-06) June 6, 1917 (age 96)
Fresno, California, United States
Occupation CEO of Tracinda Corporation
Spouse(s) Hilda Schmidt (1942–1951)
Jean Maree Harbour-Hardy (1954–1984)
Lisa Bonder (1999–1999)
Children Tracy
Linda

Kerkor "Kirk" Kerkorian (born June 6, 1917) is an American businessman. He is the president/CEO of Tracinda Corporation, his private holding company based in Beverly Hills, California. Kerkorian is known as one of the important figures in shaping Las Vegas and, with architect Martin Stern, Jr.[1] the "father of the mega-resort".[2]

An Armenian American, Kerkorian had provided over $1 billion for charity in Armenia through his Lincy Foundation.[2] It was established in 1989 and was particularly focused on helping to rebuild northern Armenia after the 1988 earthquake.[3] The foundation was dissolved in 2011, after 22-year activities.[4]

Early years[edit]

Kirk Kerkorian was born on June 6, 1917 in Fresno, California, to Armenian immigrant parents.[5] Dropping out of school in 8th grade, he became a fairly skilled amateur boxer under the tutelage of his older brother, fighting under the name "Rifle Right Kerkorian" to win the Pacific amateur welterweight championship.

In 1939, he met Ted O'Flaherty, for whom he installed wall furnaces that heated water. O'Flaherty was taking flying lessons, and having taken no interest before Kerkorian took a guest seat one day and was converted on the views of the Californian coast.

On sensing the oncoming World War II, and not wanting to join the infantry, he learned to fly at the Happy Bottom Riding Club in the Mojave Desert — adjacent to the USAF's Muroc Field, now Edwards Air Force Base. In exchange for flying lessons from pioneer aviatrix Pancho Barnes, he agreed to milk and look after her cattle.

On gaining his commercial pilot's license in six months, Kerkorian learned that the British Royal Air Force was ferrying Canadian built de Havilland Mosquitos over the north Atlantic to Scotland. The Mosquito's fuel tank carried enough fuel for 1,400 miles (2,300 km), while the trip directly was 2,200 miles (3,500 km). Rather than take the safer MontrealLabradorGreenlandIceland–Scotland route (although, going further north could mean the wings icing and distorting, and the plane crashing); Kerkorian preferred the direct "Iceland Wave" route which blew the planes at jet-speed to Europe – but it wasn't constant, and could mean ditching. The fee was $1,000 per flight, but the statistics were that only one in four completed the journey.[6] In May 1944, Kerkorian and his Wing Commander J.D. Woolridge rode the wave and broke the old crossing record. Woolridge got to Scotland in six hours, 46 minutes; Kerkorian, in seven hours, nine minutes. 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.

After the war, having saved most of his wages, Kerkorian spent $5,000 on a Cessna. He worked as a general aviation pilot, and made his first visit to Las Vegas in 1944. After spending much time in Las Vegas during the 1940s, Kerkorian quit gambling and in 1947 paid $60,000 for Trans International Airlines, which was a small air-charter service which flew gamblers from Los Angeles to Las Vegas. He then bid on some war surplus bombers, using money on loan from the Seagrams family. Gasoline, and especially airplane fuel, was in short supply at the time, so he sold the fuel from the planes' tanks, paid off his loan – and still had the airplanes. He operated the airline until 1968 when he sold it for $104 million to the Transamerica Corporation.[7]

Kerkorian and Las Vegas[edit]

In 1962, Kerkorian bought 80 acres (32 ha) in Las Vegas, across the Las Vegas Strip from the Flamingo, for $960,000. This purchase led to the building of Caesars Palace, which rented the land from Kerkorian; the rent and eventual sale of the land to Caesars in 1968 made Kerkorian $9 million.

In 1967, he bought 82 acres (33 ha) of land on Paradise Road in Las Vegas for $5 million and, with architect Martin Stern, Jr.,[8] built the International Hotel, which at the time was the largest hotel in the world; 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, breaking in the process all attendance records in the county's history. Kerkorian's International Leisure also bought the Flamingo Hotel; eventually both hotels were sold to the Hilton Hotels Corporation and were renamed the Las Vegas Hilton and the Flamingo Hilton, respectively.

After he purchased the Metro-Goldwyn-Mayer movie studio in 1969, Kerkorian (with architect Martin Stern Jr.) opened the original MGM Grand Hotel and Casino, larger than the Empire State Building[9] and the largest hotel in the world at the time it was finished. 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 were 87 deaths total, including three which occurred later as a result of injuries sustained in the fire. Amazingly, the MGM Grand reopened after only 8 months. Almost three months after the MGM fire, the Las Vegas Hilton caught fire, killing eight people.

In 1986, Kerkorian sold the MGM Grand hotels in Las Vegas and Reno for $594 million to Bally Manufacturing. The Las Vegas property was subsequently renamed Bally's. Spun off from Metro-Goldwyn-Mayer, MGM Resorts International owns and operates several properties, including the Bellagio, the current MGM Grand resort complex, The Mirage, the New York-New York, Circus Circus, Mandalay Bay, The Luxor, Excalibur and the newly completed CityCenter in Las Vegas.

MGM sold its Treasure Island Hotel and Casino property to billionaire and former New Frontier owner Phil Ruffin for $750 million.[10]

MGM[edit]

In 1969, Kerkorian appointed James Thomas Aubrey, Jr. as president of MGM. Aubrey downsized the struggling MGM and sold off massive amounts of historical memorabilia, including Dorothy's ruby slippers from The Wizard of Oz, the majority of the studio's backlots in Culver City and overseas operations such as the British MGM studio at Borehamwood. Kerkorian sold MGM's distribution system in 1973, and gradually distanced himself from the daily operation of the studio. He also owned minority interest in Columbia Pictures but his holdings were thwarted by the Justice Department who filed an antitrust suit due to him owning stock in two studios.[11] In 1979, Kerkorian issued a statement claiming that MGM was now primarily a hotel company; however, he also managed to expand the overall film library and production system with the purchase of United Artists from Transamerica in 1981, becoming MGM/UA Entertainment Company. In 1986, he sold MGM to Ted Turner.[12] After the purchase was made, Turner sold the United Artists subsidiary back to Kerkorian.[13][14]

Turner kept ownership of MGM from March 25 to August 26, 1986. He racked up huge debts and Turner simply could not afford to keep the studio under those circumstances. To recoup his investment, Turner sold the production/distribution assets and trademarks of MGM to United Artists, while retaining the pre-1986 MGM and pre-1950 Warner Bros. libraries.[12][15] The studio lot was sold to Lorimar-Telepictures, which was later acquired by Warner Bros.; in 1990, the lot was sold to Sony Corporation's Columbia Pictures Entertainment in exchange for the half of Warner's lot that they had rented since the 1970s. Also in 1990, the MGM studio was purchased by Italian financier Giancarlo Parretti, but Parretti defaulted on the loans he'd used to buy the studio, leaving the studio in the hands of the French bank, Credit Lyonnais. Credit Lyonnais invested significant sums to revive the moribund studio and eventually sold it back to Kerkorian in 1996. Kerkorian soon expanded the company, purchasing Orion Pictures, The Samuel Goldwyn Company and Motion Picture Corporation of America from John Kluge's Metromedia in 1997, and bought a majority to the pre-1996 PolyGram Filmed Entertainment library from its parent Philips, which was in process to sell PolyGram to Seagram.

In 2005, Kerkorian sold MGM once more to a consortium led by Sony. He retained a 55% stake in MGM Mirage.

On November 22, 2006, Kerkorian's Tracinda investment corporation offered to buy 15 million shares of MGM Mirage to increase his stake in the gambling giant to 61.7% from 56.3%, if approved.[16]

In May 2009, following the completion of a $1 billion stock offering by MGM Mirage, Kerkorian and Tracinda lost their majority ownership of the gaming company, dropping from 53.8 percent to 39 percent and even after pledging to purchase 10 percent of the new stock offering they now remain minority owners.[17][18]

Automobile industry[edit]

Kerkorian has had an on again/off again relationship with the American auto industry. His involvement began in 1995, when with the assistance of retired Chrysler chairman and CEO Lee Iacocca, Kerkorian staged a takeover attempt of the Chrysler Corporation. Chrysler's management treated the takeover as hostile, and after a lengthy battle, Kerkorian canceled his plans and sold his Chrysler stake in 1996. As part of the settlement, Iacocca was placed under a gag order forbidding him from discussing Chrysler in public or print for five years. Two years later, Chrysler management agreed to be acquired by German automaker Daimler-Benz.

Kerkorian once owned 9.9 percent of General Motors (GM). According to press accounts from June 30, 2006, Kerkorian suggested that Renault acquire a 20 percent stake in GM to rescue GM from itself. A letter from Tracinda to Rick Wagoner was released to the public,[19] to pressure GM's executive hierarchy,[20] but talks failed.[21] On November 22, 2006 Kerkorian sold 14 million shares of his GM stake (it is speculated that this action was due to GM's rejection of Renault and Nissan's bids for stakes in the company as both of these bids were strongly supported by Kerkorian); the sale resulted in GM's share price falling 4.1% from its November 20 price, although it remained above $30/share.[22] The sale lowered Kerkorian's holding to around 7% of GM. On November 30, 2006 Tracinda said it had agreed to sell another 14 million shares of GM, cutting Kerkorian's stake to half of what it had been earlier that year.[23] By the end of November 2006, he had sold substantially all of his remaining GM shares.[24] After Kerkorian sold, GM lost more than 90% of its value, falling as low as $1/share by May 2009,[25] and filed bankruptcy on June 1, 2009.[26]

On April 5, 2007, Kirk Kerkorian made a $4.58 billion bid for the Chrysler Group, the U.S. arm of Daimler-Chrysler. After Daimler-Chrysler announced they were interested in selling the Chrysler division on February 14, large investors such as Cerberus Capital Management, The Blackstone Group and Magna International each announced intentions to bid on the company. Kerkorian's bid, while not expected, was not surprising given his long involvement in the U.S. automobile industry. During the bidding process, he sought the aid of his close associate Jerome York who was a former CFO at both Chrysler and IBM. On May 14, 2007 80% of the Chrysler arm of Daimler-Chrysler was sold to Cerberus for $7.4 billion.

Kerkorian began buying Ford Motor Company stock in April 2008, and spent about $1 billion to accumulate a 6% stake in the automaker. By October 2008, the investment had lost two thirds of its value, and he began selling. Tracinda explained, "In light of current economic and market conditions, it sees unique value in the gaming and hospitality and oil and gas industries and has, therefore, decided to reallocate its resources and to focus on those industries."[27] On October 21, Tracinda sold the 7.3 million Ford shares at an average price of $2.43, and said it planned to cut further its existing 6.1 percent stake in Ford, for a potential total loss of more than half a billion dollars.[28] Kerkorian sold his remaining stake in Ford on December 29, 2008.[29]

Personal life[edit]

Married three times, Kerkorian met his second wife Jean Maree Harbour-Hardy by happenstance at the Thunderbird, in Las Vegas. Ms. Harbour-Hardy, an accomplished choreographer and dancer from England, traveled the world instructing dance troupes. By chance, they met and fell in love while she was sent to check opportunities to choreograph a performance in Las Vegas. His most enduring marriage (1954–84) produced Kerkorian's two daughters, Tracy and Linda. The name of Kerkorian's personal holding company – Tracinda Corporation – is a portmanteau of the two daughters' names. Also named after his two daughters, Kerkorian's Lincy Foundation has made substantial charitable contributions, giving prominence to Armenian causes. Although divorced, they remain close friends and confidants. Ms. Harbour-Hardy Kerkorian is financially successful in her own right.

Kerkorian's short-lived third marriage (1999) was to professional tennis player Lisa Bonder, 48 years his junior, which under a prenuptial agreement lasted only one month. He subsequently was involved in a breach of privacy suit filed against him by Steve Bing. Kerkorian claimed Bing was the father of Bonder's daughter, which was later established by DNA testing. On August 10, 2006, the Los Angeles Times reported that Kerkorian's attorneys were being sued by Bonder because of their connection to former high-profile private investigator Anthony Pellicano, who is currently serving a fifteen-year prison sentence for running a wiretapping scheme. Bonder's attorney alleges that Kerkorian's lawyers hired Pellicano to wiretap telephone calls illegally between him and Kerkorian's ex-wife in order to gain a tactical advantage in the divorce proceedings.[30]

Kerkorian is an avid tennis player, playing in tournaments, associating with other players, and routinely playing with Alex Yemenidjian, a former MGM executive now co-owner of the Tropicana Las Vegas resort. He has a penchant for expensive clothes (especially custom-made outfits by Italian designer Brioni), but drives relatively low cost vehicles such as a Pontiac Firebird, Jeep Grand Cherokee and a Ford Taurus.[31]

Kerkorian splits his time between his residences in Beverly Hills, California and Las Vegas.

The fourth richest person in Los Angeles, he may also be one of the most private. He almost never gives interviews and seldom appears in public. Even though his charitable foundation has dispensed more than $200 million and a school,[32] he has never allowed anything to be named in his honor. On February 14, 2011, Kerkorian donated $200 million (The Lincy Foundation) to the University of California, Los Angeles, UCLA to create the "Dream Fund at UCLA".[33]

Wealth[edit]

His net worth in 2008, according to Forbes magazine, was $16.0 billion, making him the world's 41st richest person at that time.[34] By 2011, Kerkorian was among those hardest hit by 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.[35]

Notes[edit]

  1. ^ "The Hidden History of the Xanadu". University of Nevada, Las Vegas Center for Gaming Research. 
  2. ^ a b Simich, Jerry L.; Wright, Thomas C. (2010). More peoples of Las Vegas: one city, many faces. University of Nevada Press. p. 143. ISBN 978-0-87417-817-3. 
  3. ^ Dr Helmut K Anheier, David C. Hammack (2010). American foundations: roles and contributions. Washington, D.C.: Brookings Institution Press. p. 241. ISBN 978-0-8157-0339-6. 
  4. ^ "Kirk Kerkorian is not offended by Armenia". ArmeniaDiaspora.com. 14 September 2011. Retrieved 1 January 2013. 
  5. ^ "Los Angeles Business Journal Lists Richest Angelenos". Abclocal.go.com. May 14, 2006. Retrieved September 21, 2010. 
  6. ^ Torgerson, Dial "Kerkorian, An American Success Story" biography pub 1974
  7. ^ "Kirk Kerkorian". Online Nevada Encyclopedia. Retrieved July 16, 2011. 
  8. ^ chung, su kim (August 18, 2009). "Water Resources: Special Collections". Library.unlv.edu. Retrieved September 21, 2010. 
  9. ^ Tony Illia. "Nevada Swings Into the Seventies". Southwest Contractor. 
  10. ^ – Mon Dec 15, 12:44 pm ET. "MGM Mirage selling Treasure Island for $500M". Yahoo! News. Retrieved September 21, 2010. 
  11. ^ "MGM/UA Under Kerkorian Meant 20 Years of Change". Los Angeles Times. March 8, 1990. 
  12. ^ a b Prince, Stephen (2000) A New Pot of Gold: Hollywood Under the Electronic Rainbow, 1980–1989 (p. 14-16, 71-74). University of California Press, Berkeley/Los Angeles, California. ISBN 0-520-23266-6
  13. ^ Parsons, Patrick. Blue Skies: A History of Cable Television. Philadelphia, Pa.: Temple University Press, 2008. ISBN 1-59213-287-1; Stefoff, Rebecca. Ted Turner, Television's Triumphant Tiger. Ada, Okla.: Garrett Educational Corp., 1991. ISBN 1-56074-024-8
  14. ^ Bart, Peter. Fade Out: The Calamitous Final Days of MGM. New York: Morrow, 1990. ISBN 0-688-08460-5
  15. ^ [1]
  16. ^ Schneiderman, R.M. (November 22, 2006). "Update – Kerkorian Sells GM, Buys MGM –". Forbes. Retrieved July 15, 2011. 
  17. ^ Kerkorian Stake in MGM Mirage Shrinks (Wall Street Journal)
  18. ^ MGM To Pay Back $825.6 Million In Debt Following Stock, Note Sales (CNN)
  19. ^ "Tracinda Corp, et al. – SC 13D/A – General Motors Corp – On 6/30/06 – EX-10.1". SEC Info. Retrieved September 21, 2010. 
  20. ^ Koenig, Bill (June 30, 2006). "Kerkorian Seeks GM Partnership With Renault, Nissan (Update12)". Bloomberg. Retrieved September 21, 2010. 
  21. ^ Maynard, Micheline (October 4, 2006). "G.M. Ends Talks With Renault and Nissan". The New York Times. Retrieved April 4, 2010. 
  22. ^ "Motors Liquidation Company: PINK:MTLQQ historical prices – Google Finance". Google. Retrieved September 21, 2010. 
  23. ^ Isidore, Chris (November 30, 2006). "Kerkorian dumps more GM shares". CNN. Retrieved April 4, 2010. 
  24. ^ Green, Jeff (November 30, 2006). "Kerkorian Sells His Remaining GM Holdings, Person Familiar Says". Bloomberg. Retrieved September 21, 2010. 
  25. ^ "GEO Minerals Ltd.: CVE:GM quotes & news – Google Finance". Google. Retrieved September 21, 2010. 
  26. ^ Taylor, A (June 3, 2009). "MotorWorld: Inside GM's bankruptcy filing". CNN. Retrieved April 4, 2010. 
  27. ^ Vlasic, Bill (October 22, 2008). "Investor Sheds a Major Stake in Ford". The New York Times. Retrieved April 4, 2010. 
  28. ^ "Kerkorian taking huge loss in Ford stake - Business - Autos". MSNBC. October 22, 2008. Retrieved September 21, 2010. 
  29. ^ Globe and Mail (Canada) http://business.theglobeandmail.com/servlet/story/RTGAM.20081229.wFordkerkorian1229/BNStory/Business/home |url= missing title (help). [dead link]
  30. ^ "Lawyer Files Suit Over Alleged Wiretapping". Los Angeles Times. August 10, 2006. 
  31. ^ David Streitfeld Los Angeles Times, June 9, 2005, page A 1.
  32. ^ "[ www.armenialiberty.org ] Friday 20, May 2005". Armenialiberty.org. May 20, 2005. Retrieved September 21, 2010. 
  33. ^ UCLA receives $200 million gift to create unique philanthropic fund, UCLA, February 14, 2011
  34. ^ "Bill Gates America's richest for 14th year in a row". Reuters. September 20, 2007. 
  35. ^ Kirk Kerkorian – Forbes, Forbes.com. Retrieved January 24, 2014

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