RAGS TO RICHES CEOS: KIRK KERKORIAN
MinyanVille
Nov 18 2009
Kirk Kerkorian, the 92-year-old billionaire investor, so-called
father of the mega-resort, and richest man in Los Angeles, worked
odd jobs as a boy during the Great Depression and never went to high
school. His fortune, which Forbes recently estimated at $5 billion,
began with a small plane he purchased in 1944. His is a rags-to-riches
story pulled from the hardscrabble America of that time.
The youngest of four children, Kerkorian was born in 1917 in Fresno,
California, the son of Armenian immigrants. Kerkorian spoke Armenian at
home and learned English in the streets. His father was a prosperous
farmer, but he lost his land in the recession of 1921-22 and the
family moved to Los Angeles. He hustled odd jobs to help his family,
like selling newspapers and helping his father haul produce in a truck.
"When you’re a self-made man you start very early in life," he
once told an interviewer. "In my case it was at nine 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."
The Kerkorians moved often, and the young Kirk was forced to stand up
for himself as the new kid in school. His older brother Nish, a pro
boxer, coached him. Kirk dropped out of school after eighth grade,
and later became a successful amateur boxer, earning the nickname
"Rifle Right Kerkorian" and the title of Pacific amateur welterweight
champion.
In the autumn of 1939, Kerkorian met a pilot named Ted O’Flaherty,
with whom he helped install wall furnaces for $0.45 an hour. Kerkorian
would sometimes watch O’Flaherty practice flight maneuvers at a nearby
airfield, and one day he went up. Kerkorian was hooked. In 1940,
he became a cattle-ranch hand in exchange for flying lessons at the
ranch-meets-flight school of pioneer female aviator Florence "Pancho"
Barnes. Within six months, he had a commercial pilot’s license and
job as a flight instructor.
Then, Kerkorian traveled to Montreal during World War II and joined
the Royal Air Force Transport Command as a civilian contractor. His
mission was to fly Canadian-built Mosquito bombers to Scotland. It
was a treacherous mission: Only one in four made it. "They were paying
money I couldn’t believe, $1,000 a trip," he later recalled.
In two and a half years, Kerkorian delivered 33 planes, logged
thousands of hours, and saved most of his generous salary. He paid
$5,000 for a single-engine Cessna in which to train pilots. He also
used the plane to fly charters to Las Vegas — the first one was in
July 1945.
Soon Kerkorian became well known as a high roller on the craps tables
in Las Vegas. He also started to make his mark on the business of
Las Vegas a resort town. In 1947, he paid $60,000 for Los Angeles
Air Service, a tiny charter line that flew between Los Angeles and
Las Vegas. In 1968, he sold the airline, which he had renamed Trans
International Airlines, to TransAmerica Corp. for about $104 million
in stock.
Kerkorian then set out to make Las Vegas as we know it today. He
purchased land that he rented and later sold to Caesars Palace,
bought the Flamingo Hotel, and then built the International Hotel, the
largest in the world when it opened in 1969. (He sold both hotels to
the Hilton chain in 1970.) In the same year he built the International
he purchased MGM, the ailing Hollywood studio.
Over the years Kerkorian has made billions by selling and buying MGM
back on several occasions. He also built MGM Mirage, in 1973, then the
largest hotel in the world. He remains the large shareholder in MGM
Mirage (MGM), one of the largest gaming and resort conglomerates in
the world. Since 1995, Kerkorian, under his private holding company
of Tracinda Corp., has made big investments, some unsuccessful,
in the American automobile industry.
This year, Forbes magazine dropped Kerkorian from 41st to 97th on
its list of the world’s richest people and named him as one of the
billionaires most negatively impacted by the stock market recession.
"The Casino titan’s 52% stake in gambling giant MGM Mirage was worth
more than $11 billion 2 years ago. Today it’s worth $1.8 billion as
shares have fallen 90% from their October 2007 high," according to
Forbes. Before the stock market recession, Kerkorian’s net worth was
valued at $16 billion, but it has since sunk to $5 billion.
Befitting the hardship of his youth, Kerkorian has given away as much
as one-fifth of his total fortune to charitable causes, especially
his ancestral home of Armenia. There — where Armenians have tried
to name an avenue or airport after him — and in the United States,
Kerkorian has refused to have anything named in his honor.