Kirk Kerkorian, the eighth-grade dropout who bootstrapped his way to billionaire by buying and selling stakes in airlines, auto companies, Nevada casinos and Hollywood studios, has died. He was 98.
He died on June 15 in Los Angeles, Clark Dumont, a spokesman for MGM Resorts International, said in a telephone interview. No cause was given.
Like a Monopoly player, Kerkorian found it hard to quit. As an octogenarian, he controlled more than half of the Las Vegas strip’s hotel rooms after his casino company, MGM Grand Inc., acquired rival Steve Wynn’s Mirage Resorts Inc. for $6.4 billion in 2000 and the Mandalay Resort Group for $4.8 billion four years later. He was the controlling shareholder of the company, now known as MGM Resorts International, until May 2009, when he reduced his stake in the business to 37 percent from 54 percent. He bought almost 10 percent of General Motors Corp.’s depressed stock in 2005, when he was 88. Impatient with GM management at 89, Kerkorian pressed for changes and was rebuffed. He sold his stake in late 2006.
“I didn’t go to school, but I went into buying and selling businesses at an early age,” Kerkorian said in a rare interview with Bloomberg News in 2011. “I got into a lot of different businesses. I had to have a lot of luck.”
His deals generated a net worth of $3.6 billion, according to the Bloomberg Billionaires Index.
His fortune took a hit during the financial crisis of 2008. Among his losses: about $600 million from unwinding a stake in Ford Motor Co. that had topped 140 million shares, or about 6 percent of the company. Construction of the $8.5 billion CityCenter development in Las Vegas during the global recession drove down MGM’s stock price. For decades, Kerkorian ranked as a Hollywood mogul through his control of the Metro-Goldwyn-Mayer Inc. Over a 30-year span, he purchased stakes in several major studios.
His competitiveness extended to tennis, playing in the men’s national championships in the over-85 bracket as late as 2004. His 30-acre estate in Beverly Hills, California, had two tennis courts. Kerkorian rarely took a title other than president and sole shareholder of Tracinda Corp., the Las Vegas-based company he formed to make investments. His Lincy Foundation, created in 1989 in response to a devastating earthquake the previous year that killed about 25,000 people in Armenia, his family’s ancestral homeland, donated about $180 million to the country but he declined offers to have landmarks named in his honor.
Kerkorian was not easily crossed. He fought in court when an ex-wife, Lisa Bonder, in 2002 sought $320,000 a month in alimony and child support. Eight years later Kerkorian agreed to pay about $10 million plus $100,000 a month in child support even though Bonder admitted that Kerkorian wasn’t the biological father, according to the Associated Press. Kerkorian sued DaimlerChrysler AG in 2000, saying he’d been duped. As Chrysler Corp.’s largest shareholder, with a stake of almost 14 percent, he had initially supported the carmaker’s 1998 merger with Germany’s Daimler-Benz AG.
Later he said he’d been fooled by representations that the deal was “a merger of equals.” Seeking as much as $3 billion in damages, he lost a federal trial verdict in 2005. His appeal of the ruling was unsuccessful. In 2007 Kerkorian offered $4.5 billion in cash to buy the money-losing U.S. automaker from its parent company and was outbid by Cerberus Capital Management LP.
Kerkor Kerkorian was born on June 6, 1917, in Fresno, California. His parents, Ahron and Lily Kerkorian, were Armenian immigrant farmers who lost their land in the 1920s. The family moved to Los Angeles, where the elder Kerkorian operated fruit stands, never regaining economic security.
“We moved at least 20 times when I was a kid,” Kerkorian told Fortune magazine in 1969. More about his childhood emerged in “Kerkorian: An American Success Story,” a 1974 biography by Dial Torgerson.
After punching the son of a schoolteacher, Kerkorian was sent to a local reform school. His formal education ended with a few auto-mechanic courses, although he later faked a letter stating he was a high school graduate when he wanted to qualify as a military flight officer. At 17, Kerkorian pretended to be older so he could join the Civilian Conservation Corps, earning $30 a month in 1934 in Sequoia National Park, according to Torgerson’s biography. He worked six months cutting fire trails in forests before returning to Los Angeles.
Kerkorian followed his older brother Nishon into amateur boxing, winning most of his 33 bouts. At 22, he was installing furnaces when a colleague introduced him to the thrill of flying airplanes. He earned a pilot license, then enrolled in a California flight school for his commercial license, working as a ranch hand to pay his way.
One month after the Japanese attack on Pearl Harbor in December 1941, Kerkorian married Hilda Schmidt. He turned down a captain’s commission in the U.S. Army Air Force to take a risky but lucrative civilian job delivering planes overseas for Britain’s Royal Air Force. He saved much of his $1,000-a-trip salary to invest in the postwar boom in aviation. Kerkorian purchased and sold surplus planes after the war, then bought Los Angeles Air Service, an air charter business in 1947.
He flew charter flights to Las Vegas, often for high-rollers or Hollywood celebrities, and spent more time in Nevada following his 1951 divorce. In 1954, he married Jean Maree Hardy, a dancer from England. The couple had two daughters, Tracy and Linda, before divorcing. Kerkorian coined the “Tracinda” and “Lincy” monikers from his children’s names.
In 1962, Kerkorian bought about 80 acres in Las Vegas that became the site of Caesars Palace in 1966. For his land purchase of $960,000, Kerkorian collected $2 million in annual rent until he sold the property to the hotel’s owners for $5 million in 1968. It was “one of the best” deals he’d ever done, he said in 2011. Kerkorian also profited from his charter air carrier, renamed Trans International Airlines in 1960. Studebaker Corp. bought the company in 1962 and sold it back to Kerkorian in 1964. Kerkorian took the airline public in 1965, then sold his stake in 1968 to Transamerica Corp. for stock valued at $148 million. Kerkorian realized a profit of about $100 million by the time he sold the last of his Transamerica shares in mid-1969.
The late 1960s were heady times as Kerkorian stepped up his investments in Las Vegas.
He bought the Flamingo Hotel for $12.5 million and built the 30-story International Hotel, which opened in July 1969. That month, Kerkorian announced his intention to acquire control of venerable film studio Metro-Goldwyn-Mayer Inc., even though 16 percent of the MGM stock was already in the hands of Seagram heir Edgar Bronfman. By November, after borrowing from European lenders, he had acquired 32 percent of MGM for $70 million and ousted Bronfman’s hand-picked chief executive.
Two years later, after he repaid his European debt, MGM announced that it would diversify by building a large resort hotel in Las Vegas. The 25-story MGM Grand Hotel, now Bally’s, opened in 1973. MGM’s box-office performance proved a perennial disappointment. In four years, MGM slashed 5,000 jobs from the payroll, leaving a workforce of 1,200.
Kerkorian sought to bolster MGM’s performance by acquiring another production company. Twentieth Century-Fox Film Corp. rebuffed his proposed stock-swap in 1971. He accumulated 25 percent of Columbia Pictures Industries in 1979 and won a federal antitrust challenge before selling the stake in 1981 for an estimated $70 million profit.
Kerkorian then acquired United Artists Corp. from Transamerica Corp. for $380 million. In 1984, he struck a deal with corporate raider Saul Steinberg to gain control of Walt Disney’s film studio and library if Steinberg acquired the company.
Disney, however, paid Steinberg to go away. In 1985, the ever-restless Kerkorian announced that he would sell his film company -- by then called MGM/UA Entertainment Co. -- and repurchase the United Artists unit from Ted Turner, who couldn’t afford the entire company.
In 1986, Kerkorian bought back the MGM name as well. In 1990, he sold the studio.
Kerkorian continued to invest in other leisure industries with the conviction -- as he told Fortune -- that prosperous Americans would seek such pursuits. He started MGM Grand Air in 1987 to provide luxury airline service between New York and Los Angeles and sold it in 1995.
He built a new MGM Grand Hotel Casino in Las Vegas in 1993. He also acquired almost 10 percent of Chrysler’s stock in 1990. Kerkorian told the Los Angeles Times that he purchased the shares because he was impressed by then-chairman Lee Iacocca, whom he had met at a Florida racetrack the previous year.
In 1995, he teamed with Iacocca -- then retired -- to offer to buy the remaining 90 percent of the company, but Chrysler rejected the offer. Three years later Daimler-Benz agreed to buy the U.S. automaker for $43 billion in stock and assumed debt, then the largest foreign takeover of a U.S. company. Far from settling into his own retirement, Kerkorian in 1996 negotiated the repurchase of his old MGM film company, took it public and helped finance its acquisition of the Orion film company in 1997 and PolyGram film library in 1999. In April 2011, Kerkorian said he would be stepping down from the MGM board to become director emeritus.
“I just didn’t care to keep going back to meetings,” he said in an interview.