Kirk Kerkorian, the power behind the throne at MGM Resorts, died last week at the age of 98. The always-reclusive Kerkorian was even less visible in his final years, but his legacy will live on bright and proud. Three times during his long career, he built what was at the time the world’s largest hotel, all in Las Vegas— the International (once the Las Vegas Hilton, now the Westgate), MGM Grand (now Bally’s) and the current MGM Grand.
But it wasn’t just construction that drove Kerkorian. His financial acumen was second to none, which led him to acquire two powerful rivals, Mirage Resorts in 2000 and Mandalay Resorts four years later. Kerkorian built his fortune, however, acquiring bits and pieces of companies in many industries, primarily airlines, automobile companies, Hollywood movie studios, and, of course, casinos.
An eighth-grade dropout, Kerkorian learned the rules of the mean streets.
“I didn’t go to school, but I went into buying and selling businesses at an early age,” Kerkorian said in an interview in 2011. “I got into a lot of different businesses. I had to have a lot of luck.”
He was also a renowned philanthropist. In 1989, he contributed more than $180 million to his ancestral homeland of Armenia after a devastating earthquake killed in excess of 25,000 people. Later, he refused to allow a statue to be erected in his honor.
Kerkorian’s first entry into the casino industry was as a landowner. He bought 80 acres of land in Las Vegas in 1962 for almost $1 million. He later leased it to the owners of Caesars Palace for $2 million a year, and sold it to them in 1968 for $5 million. He called it “one of my best deals.”
His interest in Las Vegas piqued, Kerkorian soon bought the Flamingo hotel. He marked the beginning of the convergence between entertainment and gaming with his first ownership interest, the construction of the International Hotel, and quickly demonstrated his savvy in combining entertainment with gaming. His first two performers at the property were Elvis Presley and Barbra Streisand.
In July 1969, he bought Metro-Goldwyn-Mayer Inc., and two years later announced plans to diversify the company’s finances by building an MGM Grand casino hotel in Las Vegas. MGM needed diversification, as its pictures were consistent losers at the box office. He bought pieces of Twentieth Century-Fox Film Corp. and Columbia Pictures in subsequent years, and then bought United Artists Corp. His attempts to gain parts of Disney Films failed, however. In 1990, he sold the studio, now known as MGM/UA Entertainment Company.
Kerkorian was known to lean heavily on his gaming executives for advice and direction. When the late Terry Lanni suggested an arena for MGM Grand, Kerkorian granted it. When Jim Murren decided that a multi-use $9 billion complex was the answer, Kerkorian OK’d CityCenter. Many other gaming executives from other companies have told me that Kerkorian was deeply interested in how they built their companies and offered his views in return.
But Kerkorian never held any titles with the casino companies, or any other companies he owned. He simply was president of the Tracinda Corp., his investment vehicle named for his two daughters, Tracy and Linda.
So what happens now? Tracinda has actually reduced its stake in MGM Resorts over the past few years, and now owns only 16.2 percent of the company worth approximately $1.8 billion. According to Kerkorian’s will, that interest will be subject to an orderly disposition engineered by his executor, Tracinda’s Anthony Mandekic.
