Kirk Kerkorian
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Kirk Kerkorian (born June 6, 1917) is an Armenian-American billionaire, and 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 the city of Las Vegas, Nevada, and the "father of the megaresort."
Kerkorian splits his time between his residences in Beverly Hills and Nevada.
One of the richest residents of Beverly Hills, he may also be the most private. He almost never gives interviews and seldom appears in public. Even though his charitable foundation has dispensed more than $100 million, he has never allowed anything to be named in his honor.
His net worth in 2007, according to Forbes Magazine, is $15 billion.
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[edit] Early life
Kirk "Rifle" Kerkorian was born in 1917 in Fresno, California, to Armenian immigrant parents.[1] He dropped out of school in 8th grade. The young Kerkorian, under the tutelage of his older brother, became a fairly skilled amateur boxer, fighting under the name "Rifle Right Kerkorian," but in 1939 shifted his focus to learn how to fly airplanes. During World War II, Kerkorian flew de Havilland Mosquitos over the north Atlantic as a pilot in the British Royal Air Force as part of the Ferry Command. In 1947, he paid $60,000 for TransInternational Airlines, which was a small air-charter service which flew gamblers from Los Angeles to Las Vegas. He operated the airline until 1968 when he sold it for $104 million to Trans-America Corporation.[1]
The story about Kirk's first major deal is that he 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 and paid off his loan ... and still had the airplanes.
[edit] Kerkorian and Las Vegas
Kerkorian made his first visit to Las Vegas in 1944 as a Cessna pilot. After spending much time in Las Vegas during the 1940s and 1950s, Kerkorian quit gambling and founded a startup airline.
In 1962, Kerkorian bought 80 acres (32.3 hectares) in Las Vegas, across The 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 hectares) of land on Paradise Road in Las Vegas for $5 million and, with architect Martin Stern,[2] 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 city's history. Kerkorian's International Leisure also bought the Flamingo Hotel (which later sold the Flamingo to the Hilton Hotels Corporation in 1970). The International Hotel is known today as the Las Vegas Hilton. Until about 2000, the Flamingo was known as the Flamingo Hilton.
In 1973 he purchased MGM, the famous movie studio. With Stern again the architect, Kerkorian and MGM opened the original MGM Grand Hotel and Casino, which was 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 Las Vegas 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. Spun off from Metro-Goldwyn-Mayer, MGM Mirage owns and operates several properties, including the Bellagio, the current MGM Grand resort complex (where the Marina Hotel once stood), The Mirage, Treasure Island, the New York-New York, and what was once the Boardwalk in Las Vegas. They also own the Beau Rivage Casino in Biloxi, Mississippi.
[edit] Kerkorian and MGM
In 1969, Kerkorian appointed James T. Aubrey, Jr. MGM's president. Aubrey downsized the struggling MGM and sold off massive amounts of historical memorabilia, including Dorothy's ruby slippers (from The Wizard of Oz). Kerkorian sold MGM's distribution system in 1973, and gradually distanced himself from the daily operation of the studio. 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 in 1981. In 1986 he sold the studios to Ted Turner.
Turner kept ownership of the combined MGM/UA for 74 days. Both studios had huge debts and Turner simply could not afford to keep them under those circumstances; to recoup his investment, he sold all of United Artists and the MGM trademark back to Kerkorian. The studio lot was sold to Lorimar, which was later acquired by Warner Bros.; in 1990, the lot was sold to Sony Corporation's Columbia TriStar Pictures in exchange for the half of Warner's lot they'd 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 and sold the studio back to Kerkorian in 1996.
In 2004 Kerkorian sold MGM once more to a consortium led by Sony. He retains a 55% stake in MGM Mirage.
On 22 November, 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.Kerkorian Sells GM, Buys MGM
[edit] Investment in General Motors
Kerkorian once held 9.9 percent of G.M. shares. According to press accounts from June 30, 2006, Kerkorian has suggested that Renault acquire a 20 percent stake in GM to rescue GM from itself. A private letter sent to Rick Wagoner was released to the public to add pressure upon the General Motors executive hierarchy. Those talks have since failed.[3]
On Wednesday November 22nd 2006, Kirk 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 Kirk. The sale resulted in GM share prices falling 4.1% from its Monday 20th November price. The sale lowered Kerkorian's holding to approx. 7.4% of GM. On Thursday November 30th Tracinda Corp. investment firm said it had agreed to sell another 14 million shares of General Motors Corp., cutting Kerkorian's stake in the automaker to half of what he owned earlier this year. Later on he sold the remaining shares of GM, and left GM for good.[4] Kerkorian's move cuts his stake to 4.95 percent.
[edit] Daimler-Chrysler
On April 5, 2007, Kirk Kerkorian made a $4.58 billion bid for the Chrysler Group, the U.S. arm of Daimler-Chrysler. Since Daimler-Chrysler announced they were interested in selling the Chrysler division on February 14th, 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, is not surprising given his long involvement in the U.S. automobile industry. During the bidding process, he will be aided by his close associate Jerome York who was a former CFO at both Chrysler and IBM.
[edit] Personal life
Kerkorian married professional tennis player Lisa Bonder for one month in 1999. 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.
His corporation's name -- Tracinda -- is a portmanteau of the names of his two daughters: Tracey and Linda.
Kerkorian has donated millions of dollars to improve Armenia, his mother nation.
He has a penchant for expensive clothes (especially custom-made outfits by Italian designer Brioni).
He often plays tennis with Alex Yemenidjian.
[edit] Lincy Foundation
Named after his two daughters, Kerkorian's Lincy Foundation has made huge charitable contributions, much of this to Armenian causes.
[edit] Pellicano scandal
On August 10, 2006, the Los Angeles Times reported that Kerkorian's attorneys have been sued by his former wife Lisa's attorney because of their connection to former high-profile private investigator Anthony Pellicano, who presently faces a 110-count federal indictment for racketeering, wiretapping, witness tampering, and other charges. Lisa'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.[5]
[edit] Sources
- Kirk Kerkorian article, includes MGM fire information
- Kerkorian article discusses reduction in GM shares
- Kirk Kerkorian article at Armeniapedia.org
- 2006-Nov-30 Kerkorian GM stock sale
[edit] External links
- MGM Mirage properties website
- MGM Mirage on Yahoo! Finance
- MGM Mirage on Bloomberg
- Cash Kings article from Forbes
