'What gets his mojo working? It's the deal. He loves the deal,' said Wynn Resorts Ltd. Chairman Steve Wynn.
This year Kerkorian is number 31 on the Forbes list of global billionaires, with and estimated private net worth of US$15 billion. And yet despite his success, or perhaps because of it, he is famously media-shy. He rarely attends board meetings and never gives speeches. As far as this journo can tell, he has granted only two interviews in the last 10 years. One to the LA Times and the other to the Las Vegas Review Journal. This has prompted many a slighted journo to call him an anti-social hermit.
'I'm far from being reclusive,' declared Kerkorian in one of those interviews with KJ Evans. 'I have 30- or 40-year friendships that I prefer to meeting new people. I go to an occasional party, but just because I don't go to a lot of events, and I'm not out in public all the time doesn't mean I'm anti-social or a recluse. I'm at a restaurant three or four nights a week, here or in Las Vegas.'
Senate Majority Leader Harry Reid, D-Nev., an old friend of Kerkorian, puts it this way. 'Kirk is probably the most unassuming person in the world. He's a person driven by an innate ability to look into the future of the business world and capitalize on it.'
Kirk Kerkorian entered the world on June 6 1917, the youngest of four children born to Ahron and Lily Kerkorian, Armenian immigrants in Fresno, California.
'Our first language, although we were born here, was Armenian,' Kerkorian recalls in the Review Journal interview. 'We didn't learn the English language until we hit the streets.'
The Kerkorian family struggled in the recession of 1921-1922. They moved to Los Angeles. At a very young age Kirk sold newspapers and hustled odd jobs.
'When you're a self-made man you start very early in life,' he says. 'In my case it was at 9 years old when I started bringing income into the family. You get a drive that's a little different, maybe a little stronger, than somebody who inherited.'
According to Evans, 'the Kerkorians moved often, and Kirk was always the new kid in school, obliged to prove himself. Big brother Nish, a pro boxer, coached him. By junior high school, he had been transferred to a disciplinary campus where order was maintained with a metal-studded leather belt. There were more fights than ever.'
By the 8 th Grade (Std 6 to you, old timer) Kerkorian dropped out of school altogether to focus on a boxing career. He was relatively successful winning the title of Pacific amateur welterweight champion and earning the nickname Rifle Right Kerkorian. But boxing was no easy road. Especially after the great depression and in the build-up to World War 2. By 1939, to make ends meet he was installing wall furnaces for 45 cents an hour with a friend, Ted O'Flaherty. O'Flaherty was also a fledgling pilot and, according to Evans, Kerkorian would sometimes go up to the Alhambra Airport and watch him practice maneuvers in a Piper Cub.
'Originally disinterested, Kerkorian consented one day to go aloft with O'Flaherty. As the plane rose, and the Southern California landscape became visible from the mountains to the ocean, Kerkorian experienced a defining moment.
"He was sold on it right then," O'Flaherty later recalled. "He had never been up in a plane before. But I'm telling you, after that first flight he went right at it. The very next day, he was back out at the field to take his first flying lesson."'
With the world gearing for war, Kerkorian saw the writing on the wall, and he was desperate not to be drafted into the infantry and sent out to be chopped in half by a machine gun. Not from a sense of cowardice, or self-preservation - he was about to prove beyond a doubt that he is no coward and not too bright on the self-preservation front either - but, this journo speculates, rather the fear of a senseless death. He immediately decided to get his pilots license.
By Evans' account, 'One day in 1940 Kerkorian showed up at the Happy Bottom Ranch in the Mojave Desert adjacent to Muroc Field, now Edwards Air Force Base. Owned by Florence "Pancho" Barnes, a pioneer female aviator, the ranch was a combination flight school and dairy farm.
"I haven't got any money," Kerkorian told Barnes. "I haven't got any education. I want to learn to fly. I don't know how I can do it. Can you help me?"
No college was needed, just the willingness to pull teats and shovel bovine backwash. Within six months, Kerkorian had a commercial pilot's license, and a job as a flight instructor.'
He then moved up to Canada and joined the Royal Air Force.
'I heard about the Royal Air Force flying out of Montreal, Canada, and I went up there and I got hired right away,' recalls Kerkorian. "They were paying money I couldn't believe, $1,000 a trip.'
There was a reason for this big pay out. At the time The RAF was delivering Canadian-built Mosquito bombers to Scotland. The Mosquito's fuel tank only carried 1400 miles worth of fuel and it was 2200 miles to Scotland. By Evans' account, only one in every four Mosquitos made it. There were two possible routes. Both of them suicidal. The 'safe' route went Montreal-Labrador-Greenland-Iceland-Scotland. However the planes' high-performance wings could be distorted by a paper-thin coating of ice, causing it to plummet from the sky; pilot and plane perishing in a fireball in the snow. As Dial Torgerson describes in the out of print 1974 biography 'Kerkorian, An American Success Story':
'The snowfields and forests around that frozen perimeter were strewn with downed Mosquitos crushed like matchboxes,"
The 'other' way, was both more direct and risky. You could fly straight across the Atlantic, locking into the jetstream flowing from West to East, called the 'Icelandic Wave'. It could blow the planes towards Europe at jet speeds. But it could be fickle. If it dropped mid-flight, so would the pilot and plane.
By Evans account, 'Kerkorian and his wing commander, J.D. Woolridge, rode the wave in May 1944, and broke the old crossing record. Woolridge got to Scotland in six hours, 46 minutes; Kerkorian, in seven hours, nine minutes. He came in second. He hated that.'
The following month on another delivery, the Iceland Wave petered out on Kerkorian halfway across. 'The sun set. The reserve tank ran empty, and Kerkorian prepared to ditch. His navigator begged Kerkorian to drop low just once. As they broke through the cloud, the lights of Prestwick, Scotland, twinkled ahead. Kerkorian made a perfect landing.'
In his two and a half years of service with the RAF, Kerkorian got a taste for the adrenalin and delivered 33 planes to Scotland. He also saved most of his big salary. After the war Kerkorian purchased a single engine Cessna for $5000 and started training pilots and flying charters. In July 1945 he made his first trip to Las Vegas. Evans picks up the narrative: 'Jerry Williams, a Los Angeles scrap iron dealer, hired Kerkorian's plane two or three times a week to fly to Las Vegas. "I was just overwhelmed at the level of excitement in this little town," he says. "The best times of my life were in Las Vegas." One morning, Kerkorian and Williams emerged into the dawn after a fruitless night at the tables. They had $5 between them, and Williams suggested they save it for breakfast.
"What good's five dollars going to do?" asked Kerkorian, and headed back to the craps table, where he won $700.'
Soon Kerkorian became known as a Vegas high roller. Evans called him: '"the Perry Como of the craps table," for the unruffled way he could win, or more often lose; $50,000 to $80,000 per night. He eventually quit gambling entirely.'
Thanks to our source at Wikipedia, I can report that I n 1947 Kerkorian paid $60,000 for Trans International Airlines, a small air-charter service which flew gamblers from Los Angeles to Las Vegas. He then 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, paid off his loan - and still had the airplanes. In 1965 he took the airline public. The Armenian-American community, who had all heard of Kerkorian, bought up the stock and the share price tripled. He operated the airline until 1968 when he sold it for $104 million to the Transamerica Corporation. Kerkorian received about $85 million worth of stock in the TransAmerica conglomerate, making him its biggest shareholder.
In 1962, Kerkorian pulled off what Fortune magazine called, 'one of the most successful land speculations in Las Vegas' history.' He bought 32 hectares across the Strip from the Flamingo for $960,000. The price was low even then, and for good reason. As Evans reports. 'Another narrow band of property cut the 80 acres off from the Strip.
"It was landlocked," says Kerkorian, "We traded the owners four or five acres for all of this thin strip that they could never build on. Then I got a call from Jay Sarno, and that's how Caesars Palace got started."
Kerkorian collected $4 million in rent before selling the land to Caesars for another $5 million in 1968.'
With the cash from the Caesars sale and his TransAmerica stock, Kerkorian was ready to build his first Las Vegas casino, and create the first mega-resort.
In 1967, he bought 82 acres on Paradise Road for $5 million employed architect Martin Stern Jr. to design, and hired Fred Benninger to run what was to become known as The International Hotel (now known as the Las Vegas Hilton). Apart from being the first mega-resort it was also the largest hotel in the world at the time. The success of the resort hinged on two star performers Barbra Streisand and Elvis Presley. Presley alone 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. This was fat Elvis in the last few years of his downward spiral, all gold lame suits and huge sideburns. As sad as that was, it worked for Kerkorian.
'We opened that hotel with Barbra Streisand in the main showroom,' says Kerkorian in the Review Journal. 'The rock musical "Hair" was in the other showroom and the opening lounge act was Ike and Tina Turner. Elvis followed Barbra in the main showroom. I don't know of any hotel that went that big on entertainment.'
'I'm not a firm believer,' Kerkorian told Evans, 'that you have to have 30 years of experience, if you've got good, common sense... I can't take much credit except for seeing the big picture; the amount of rooms, what kind of showrooms, I'm into that part of it. But when you get the nitty-gritty, I don't have the education to really get in there and dissect it.'
Given the size of the International, Kerkorian, at the suggestion of Benninger, bought the Flamingo Hotel as a means to train staff for his mega-resort. The Flamingo had previously been associated with the infamous Murder Inc. Vegas mobster, Bugsy Segal. In '69 Kerkorian's International Leisure was given the green light to go public, and more or less proved that Segal and partners were skimming from the Casino.
'The reason, I think, that they allowed us to go public,' says Kerkorian via Evans,'was that I don't think the Flamingo ever showed anything more than $300,000 or $400,000 in profits. In our first year, 1968, we showed about $3 million.'
One month before the hotel opened, International Leisure common stock, which had opened at $5 per share, was selling over the counter for $50. But Kerkorian had some expensive European loans to pay off. He was confident he could retire them with a second offering of International Leisure stock. But he was refused the rights to take the offering public for, as Evans puts it, 'failing to disclose financial information about the Flamingo's previous owners. Kerkorian's people believe this information was not important to the SEC, but to a Justice Department investigation. "They employed a form of economic blackmail to try and get information out of us," said a Kerkorian lawyer.
To pay his debts, Kerkorian sold half of his own shares in International Leisure to Hilton Hotels. He only got $16.5 million for stock worth $180 million only six months earlier. He sold his Las Vegas home, his private plane and his yacht. Colleagues were amazed at his calm during this time. But he had learned to always "keep a back door open." To Kerkorian, that means it's acceptable to lose most of what you have, as long as you can raise seed money for another enterprise.
At the same time he was making shaking up the gaming and hotel industry in Las Vegas, Kerkorian was studying the Hollywood film industry and, in 1969 began buying stock in ailing MGM studios. By the end of the year, he would have working control of MGM, which he would operate, reorganize, merge, sell, buy and resell 3 times over.
He then had the masterplan to merge the MGM (Hollywood) brand with a Vegas mega-resort. Creating a kind of Disneyland for adults. Leveraging on the merger of grown-up Hollywood mythmaking, and the nefarious pleasures and desires of Vegas. The resort that promised it all: celebrity, sex, wealth, desire, adventure and of course high stakes gambling. This was the MGM Grand.
'At its 1972 groundbreaking ceremony champagne flowed, celebrities mingled, and executives networked' Evans reports. ''In a corner, nursing a J&B Scotch and trying not to be noticed, was the man whose project was being celebrated.'
When it opened in 1973 it was the largest hotel in the world, again. In 1980 a fire gutted the place, killed 85 people and injured hundreds more. Becoming Las Vegas' greatest tragedy.
'It's something I rarely ever talk about, because how do you talk about it?' Kerkorian told Evans.
Eight months later, the MGM Grand re-opened.
In 1986, Kerkorian sold both the Las Vegas MGM mega resort and it's offshoot the Reno MGM to Bally Manufacturing Corp. for $594 million.
Soon after Kerkorian announced that he was acquiring the troubled Marina and the adjacent Tropicana Country Club. Soon he announced the $700 million MGM Grand hotel and theme park, which would become, at the time, the world's largest and most expensive hotel-casino. Noticing a trend here? The new MGM Grand boasted 5,000 rooms, eight restaurants, a health club, a monorail, the 15,000-seat MGM Grand Garden and a theme park as big as Disneyland.
But airlines, casinos and monster hotels are not his only interests. He has also, unsuccessfully attempted to get his hands on one of America's big car manufacturers.
'Kirk has always been a person who perceives a value and then jumps on it.' Says Steve Wynn. 'If he has a perception that something is undervalued, he buys it. He's the best I know of understanding the value of what something is worth.' Perhaps that explains the interest in General Motors and Chrysler. In April this year Kerkorian made a US$4.5 billion bid for the Chrysler Group. His bid however failed and he soon shifted his sights on the US' largest car manufacturer, GM. He bought up almost 10% of the company's stock and exerted pressure on the board to allow Renault and Nissan (already in partnership) to buy a stake in the company and to push for GM to join the Renault-Nissan family. As reported by Daren Fonda in a recent Time magazine article, ' Kirk Kerkorian, a large GM shareholder, wanted the flailing auto giant to join the Nissan-Renault family, hoping Le Cost Killer ( Nissan-Renault CEO Carlos Ghosn) could wield le knife at GM and help boost the stock.'
Alas that deal also fell through and Kerkorian sold his substantial stake in the company and returned to Vegas. Incidentally, the stock fell by over 4% on news that Kerkorian was moving on.
In Vegas, earlier this year Kerkorian attempted to buy two prime casino developments: The Bellagio and City-Centre from MGM Mirage - the company Kerkorian already owns 55% of. These acquisitions would have taken his shareholding in the company to around 62%. His declaration of intent caused MGM Mirage's shares to jump more than 27% in one day - growing Kerkorian's own value in the company to between US$12 and US$13 billion. Alas the deal fell through in June when MGM Mirage announced that it was entering into joint venture with Kerzner International Holdings to develop 40 acres of land into multibillion-dollar casino resort on northern end of Las Vegas Strip.
Will our very own Mr Sun City, Sol Kerzner pip the great nonaganerian daredevil pilot, high rolling casino mogul of Las Vegas? It's hard to imagine, considering Kerkorian's track record. But one thing is certain, the old man is not sitting on the porch of his Beverly Hills mansion, in a rocking chair, thinking about retirement.