Billionaire Las Vegas Mogul Kirk Kerkorian Dies in Los Angeles


KirkKerkorianKirkKerkorian4By Howard Stutz

 

LOS ANGELES (Las Vegas Review-Journal) —  Billionaire financier Kirk Kerkorian, one of the founders of modern Las Vegas whose name is synonymous with some of the Strip’s best known hotel-casinos, died Monday night Los Angeles after a brief illness.

Kerkorian, who tuned 98 on June 6, was the largest shareholder in MGM Resorts International, which he founded in the early 1990s.

Three times in his career, he built and opened what were considered the world’s largest hotel-casinos — the International (now the Westgate Las Vegas) in 1969, the original MGM Grand (now Bally’s Las Vegas) in 1973 and the current MGM Grand Las Vegas in 1993.

Kerkorian invested in and operated numerous industries, including airlines, carmakers and film studios. In the 1940s, he operated a small airline that shuttled gamblers into then-remote Las Vegas from a Los Angeles-area airport.

No business held his interest as much as gaming. Kerkorian owned, operated and sold a handful of historic Strip resorts, playing a paramount role in shaping the landscape of the Strip and Las Vegas.

Publications and historians cited Kerkorian as one of the central figures in helping Las Vegas grow into one of the world’s premier tourist destinations.

Much of what Kerkorian accomplished was without fanfare.

When the $8.5 billion CityCenter development opened in 2009, Kerkorian, who had an influential role in getting the development off the ground, celebrated the event quietly and away from the spotlight.

“Of all the wonderful Las Vegas properties with which I’ve been associated, CityCenter is simply the most amazing,” Kerkorian said in prepared remarks. “I’m extremely excited to see the public’s reaction and look forward to seeing how it changes Las Vegas.”

MGM Resort Chairman Jim Murren said Tuesday the company was “honoring the memory of a great man, a great business leader, a great community leader, an innovator, and one of our country’s greatest generation.”

“Mr. Kerkorian combined brilliant business insight with steadfast integrity to become one of the most reputable and influential financiers of our time,” Murren said. “Personally, he was a friend and coach, who taught me the importance in looking forward, and to look back only to understand how things could be done better.”

Kerkorian is survived by two daughters, Tracy Kerkorian and Linda Ross Hilton Kemper, and three grandchildren. Funeral services are pending.

Kerkorian was born in Fresno, Calif., in 1917 to Armenian-born parents. The family moved to Los Angeles in 1922 and at age 9, Kerkorian sold newspapers on street corners. He dropped out of school in the eighth grade and became an amateur boxer.

From his humble beginnings, Kerkorian became one of the world’s richest men. At the time of his death, Forbes Magazine ranked Kerkorian No. 393 among the world’s billionaires and No. 130 in the US with a net worth of $4 billion.

Tracinda Corp., Kerkorian’s privately held investment company named for his daughters, Tracy and Linda, is MGM’s largest shareholder with an 18.6 percent stake.

Over the years, he reduced his once majority stake in the company and retired from the board in 2011. He became a senior advisor to the company and an emeritus member of the board.

“I just didn’t care to keep going back to meetings,” Kerkorian told Bloomberg News at the time. “(The board meetings) got to be very lengthy. I do stay busy. I like new challenges.”

But Kerkorian’s presence was still felt in the MGM Resorts board room. Tracinda has two representatives on the panel and in April he threw his support behind the company’s management, which helped end a contentious proxy fight.

Up until his illness, he spoke weekly with Murren.

Kerkorian held a similar close relationship with the late Terry Lanni, Murren’s predecessor who was the company’s chairman and CEO for 14 years.

“It’s great to be the CEO of his company because he is always looking toward the future,” Lanni told the Review-Journal in 2007. “Kirk is a very humble person. I’ve seen a lot of people who own 2 percent of something who call it their company. Never once in my 12 years with Kirk have I heard him refer to MGM Mirage as ‘my company.’

“Whenever we propose something, he wants to know how it will affect the other shareholders. He has majority control, but he’s very cognizant of all the other shareholders.”

Kerkorian bought and sold a Las Vegas portfolio over his career that reads like a Strip historical document.

Beginning in the 1960s, Kerkorian bought and sold several of the Strip’s best-known resorts.

He also sold the land on which Caesars Palace now stands. With his proceeds from that sale, Kerkorian purchased 82 acres on Paradise Road in 1967. The site would eventually be home of the International, dubbed the world’s largest hotel-casino at the time with 1,512 rooms. Before that resort opened, Kerkorian bought the Flamingo as a way to train the International’s staff. By the end of 1971, he had sold both properties to Hilton Hotels Corp.

Less than a year after the sale, Kerkorian, who had taken majority ownership of MGM Studios, decided to put the studio’s name on a new hotel-casino, the MGM Grand, which opened in 1973 at a cost of $107 million. With 2,084 rooms, the MGM Grand surpassed the International as the world’s largest hotel-casino.

In 1986, he sold the MGM Grand and a sister resort in Reno to Bally Manufacturing of Chicago for $594 million. At the time, gaming analysts said it was the largest single hotel sale ever.

Kerkorian didn’t stay sidelined for long. In 1987, he bought both the Desert Inn and the Sands for $167 million from the Summa Corp., which was the legacy of the Howard Hughes casino empire. Summa was exiting the gaming industry.

A year later, Kerkorian sold the Sands to then trade-show magnate Sheldon Adelson for $110 million. (The Sands was eventually demolished and became the site of The Venetian).

In 1989, while remodeling the Desert Inn, Kerkorian announced he was acquiring the troubled Marina and the adjacent Tropicana Country Club. He said the 115 acres at the corner of Tropicana Boulevard and the Strip would be the site of the $700 million MGM Grand hotel and theme park, which opened in 1993 with 5,000 rooms and became — at the time — the world’s largest and most expensive hotel-casino.

Kerkorian was traditionally media-shy.

He was profiled by the Los Angeles Times in 2005 and he sat for a lengthy discussion with the late K.J. Evans in 1999 for the Las Vegas Review-Journal’s “The First 100,” which chronicled 100 people who had major impacts on Las Vegas over the city’s first century.

In February 2005, Kerkorian attended gaming regulatory hearings for then-MGM Mirage’s $7.9 buyout of the Mandalay Resort Group. He told the Review-Journal in a brief post-meeting interview that concerns about Las Vegas being overbuilt have been aired since the 1960s, but the city had always prospered.

“I always felt, going way back, that the future of Vegas was unlimited,” Kerkorian said. “In the last four years, Nevada has grown rapidly and there has been more interest worldwide. I have to believe the same thing will happen again.”

When he turned 90 in 2007, Kerkorian was still refining the art of the deal. The word retirement remained absent from his vocabulary.

Friends at the time said Kerkorian had an agile mind and a keen business acumen. He never wavered in the way he negotiated transactions and struck financial agreements. Friends and rivals said Kerkorian was like a seer, gazing 10 years to 20 years into the future when viewing how a potential investment opportunity could affect the gaming industry.

In 2007, the late Burton Cohen who knew Kerkorian for more than half a century and spent a good part of his career operating some of the businessman’s Las Vegas hotel-casinos, said his friend “absolutely loves making the deal. That’s what drives him.”

Kerkorian engineered two buyouts that grew MGM Grand into one the gaming industry’s largest companies.

In 2000, he negotiated the $6.4 billion purchase of Steve Wynn’s Mirage Resorts, and in 2005, helped seal the Mandalay Resort Group acquisition.

“He loves the game, pure and simple, and he knows how to make money for himself and his stockholders,” South Point owner Michael Gaughan said in 2007.

UNLV history professor Michael Green once humorously likened Kerkorian to Zelig and Forrest Gump, fictional literary and cinematic characters who miraculously pop up in world-changing events. Kerkorian appears to have played a role in many of Las Vegas’ historical moments.

“It seems like he’s been involved in everything that has gone on here,” Green said.

As a businessman, Kerkorian touched industries besides gaming.

He dabbled in airlines, once owning about 17 percent of now defunct Western Airlines in the 1970s. In 1991, he made a failed bid for Trans World Airlines.

Hollywood also held his interest. Three times, Kerkorian bought and sold the film studio MGM/United Artists. Three times, he made a profit.

The U.S. auto industry also captivated Kerkorian.

In the 1990s, he bought a large chunk of the Chrysler Corp., but sold the stock after launching a failed hostile tender offer.

In 2005 and 2006, Kerkorian made moves on General Motors Corp., becoming the automaker’s largest shareholder before cashing out altogether. In April 2007, Kerkorian made one last stab at Chrysler Corp., offering $4.5 billion. The bid failed.

Gaming, however, remained his passion.