Yesterday, we covered Kirk Kerkorian’s early successes, culminating in the International Hotel opening in 1969. Today, the rest of the story.
Kerkorian’s triumph soon turned to ashes in his mouth. In order to pay off debts incurred in building the 1,512-room International, he needed to float a secondary stock offering. Nothing doing, replied the Securities & Exchange Commission. (His Flamingo Hotel had formerly been a Mob-run property, tainting Kerkorian in the SEC’s eyes.) By the time the SEC relented, International stock prices had fallen through the floor and Kerkorian had to sell his holding for a paltry $16.5 million, less than a tenth of its former value. The ex-boxer shrugged it off. "Sometimes you lose, but that’s the nature of the game. There’s always another game and another chance to win," he told Time magazine. Both the International and Flamingo would be liquidated to Hilton Hotels in 1971.
On the bright side, the former reform-school dropout was able to leverage his controlling interest in Metro-Goldwyn-Mayer into a budding hotel division whose signature property would be in Las Vegas, at the ‘Four Corners’ of the Strip and Flamingo Road.
While not as tall as the International, the $107 million MGM Grand sported more rooms (2,084), as well as eclectic amenities that included a jai alai fronton. But tragedy struck, this time in November 1980, when 87 people were killed in the still-infamous MGM Grand fire. Its catastrophic nature and a subsequent blaze at the International (now the Las Vegas Hilton) led to major safety reforms in Las Vegas hotel construction.
Kerkorian hunkered down and rebuilt the MGM Grand before liquidating it and a sister property in Reno to Bally Manufacturing Co. in 1986. (The former MGM is now Bally’s Las Vegas.) If there was a major Strip property – such as the Desert Inn – chances are that Kerkorian owned it at one point or another. He also owned the Sands, which he sold to Sheldon Adelson, who would go on to implode it and build the Venetian. "I don’t try to get all the meat off the bone. When I get a good figure, I just move something," was his investment philosophy, as articulated to Fortune magazine. Former M-G-M executive Peter Bart had a different assessment of this method: "Kerkorian emerged a billionaire. His companies emerged in shambles."
The entrepreneur continued to tinker with Hollywood studios, buying up a quarter of Columbia Pictures and tilting at Twentieth Century-Fox, in a failed ownership bid. He bought United Artists and merged it with M-G-M, while spinning off MGM Grand Hotels into a separate entity. He outfoxed Ted Turner in a sale of the M-G-M, unloading it to him for $1.5 billion, only to buy it back for a fifth of that amount when Turner couldn’t service the debt. Kerkorian sold M-G-M for a second time in 1990. (He would buy it again in 1996 and re-sell it for the last time in 2004.)
Curiously, for a man who dabbled so much in Tinseltown dream factories, Kerkorian wasn’t that much interested in movies in and of themselves. Still, "he uniquely knew the value of the MGM library and the need to protect it," according to former studio exec Janet Janjigian. He also tried his hand at an MGM Grand Airlines but couldn’t keep it off the ground for long.
Las Vegas, however, remained a constant fascination of Kerkorian’s. In 1993, he put the finishing touches on the second and current MGM Grand, far outdoing his previous efforts: The 5,005-room hotel emphasized fine dining, championship boxing matches (held in the 15,000-seat Grand Garden Arena), and a Disneyland-like amusement park – subsequently demolished. With its greenish exterior, it was officially known as the Emerald City, although its sheer expansiveness led some to dub it the Green Monster. With characteristic frugality, Kerkorian had the former Marina Hotel subsumed into the Grand, which accounts for the tiny proportions of its West Wing rooms.
His interest now turned to the automobile industry, as he sought to wrest control of Chrysler Corp. from its board, which rejected Kerkorian's $23 billion bid. The two parties eventually agreed that Chrysler would divest itself of non-automotive assets and Kerkorian’s stock position would remain below 14%. When Daimler-Benz bought Chrysler in 1998, Kerkorian cashed out $5 billion on a $2 billion investment.
While at Chrysler, he "pushed for betteridesigned products and more reliable cars," industry consultant Alan Baum told the Los Angeles Times. Attempts to repeat the Daimler/Chrysler deal at General Motors, to retake Chrysler, and to invest in Ford Motor Co. all ended unsuccessfully. Detroit was the one battleground where Kerkorian could not repeat his initial victory.
Back in Las Vegas, in 2000 Steve Wynn’s Mirage Resorts was in a weak position. It had opened two megaresorts – Bellagio and Beau Rivage – to disappointing results that weakened the stock price. Kerkorian snapped up a large chunk of distressed Mirage stock and began vying with Wynn for control. It was all over within two weeks and Kerkorian had added several of the Strip’s highest-regarded casinos (The Mirage, Treasure Island, Bellagio) to his portfolio. In 2004, he achieved a similar coup when MGM Mirage took over Mandalay Resort Group, giving it control of nearly every major property on the west side of the Las Vegas Strip.
Kerkorian’s casino investments took a battering in 2008’s Great Recession, however, as did his holdings in Ford Motor Co. MGM Mirage, in particular, led with its chin, opening the $8.5 billion CityCenter metaresort in the teeth of a bad economy. MGM CEO Jim Murren recalls pitching the project to Kerkorian – at a time when Las Vegas’ economy showed no signs of faltering. "I snuck it into a board meeting back in ’04, showed it to my board [as] a kind of an off-agenda item. They were very intrigued. Kerkorian got it right away, like he gets every new trend that I know."
Although he never wanted it publicized, Kerkorian was known in spite of himself for his philanthropy and is believed to have given away over $1 billion during his lifetime through his Lincy Foundation (also named after his daughters), including $270 million to UCLA. He was also self-effacing in his personal habits, dressing modestly, tipping generously, declining Academy Award invitations and eschewing chauffeured limousines for vehicles as humble as a Ford Taurus. He did, however, indulge in a yacht and a 737 jet.
Citing the increasing length of MGM board meetings, Kerkorian retired to an emeritus directorship, all the while protesting, "I do stay busy. I like new challenges." One challenge he would probably have rather gone without was his month-long marriage to tennis pro Lisa Bonder in 1999. Even though Kerkorian got off with child-support payments of ‘only’ $50,316 a month (Bonder wanted $320,000), it was a Pyrrhic victory. Subsequent DNA tests showed that Kerkorian’s ‘daughter’ was really the progeny of Hollywood producer Steve Bing. Also, Kerkorian’s attorney, Terry Christensen, earned a jail sentence for taping Bonder’s phone calls. The scandal overshadowed Kerkorian’s good works during his sunset years. He would marry one more time, to Una Davis, but that union would end in divorce, too.
Because of Kerkorian, "Las Vegas [had] to think big," UNLV Center for Gaming Research Director David Schwartz told the Las Vegas Review-Journal, estimating that the mogul "may have had the biggest impact of any one individual … Today we accept that the city has a good percentage of the world’s biggest hotels and some of its most profitable casinos, restaurants, and nightclubs. Kerkorian was the first one to think of Las Vegas in those terms and to actually deliver. Without him, our city would be much smaller in many ways."
How did Kerkorian see himself? "I just lucked into things," he told the Los Angeles Times. "I used to think that if I made $50,000 I’d be the happiest guy in the world."
