The Story of Kirk Kerkorian - Essay Example

THE STORY OF KIRK KERKORIAN: One of the Richest Angelinos in Las Vegas INTRODUCTION Kirk Kerkorian, born 1917, Armenian-American multi-millionaire, businessman and philanthropist rose from humble origins to become one of the wealthiest Americans. His great business acumen is evident in his high-value investments, in real estate at Las Vegas, and dealings in Hollywood. While “much of his philanthropy is anonymous” (Barkan 173) he helped his beloved ancestral homeland, the Republic of Armenia through financial aid for various reasons. Kerkorian is also the single most important donor to Armenian-American causes in the world, in the history of the community. Thesis Statement: The purpose of this paper is to investigate the story of Kirk Kerkorian, and to examine his rise to financial heights from a humble beginning. KIRK KERKORIAN: BACKGROUND Kirk Kerkorian was born on 6th June, 1917 to an Armenian immigrant family in Fresno, California. His father Ahron, a farmer and his mother Shushan, a homemaker had emigrated to America from Kharpert, Armenia in 1905. His father built up a fortune, which he subsequently lost in the agricultural depression of 1921-1922, and the family relocated to Los Angeles where they struggled to make both ends meet. Kerkorian dropped out of school at the age of sixteen, and took up boxing. Barkan (p.173) states that he was unsuccessful in this field because physically he was not big enough to be a professional boxer. KERKORIAN’S EARLY WORK AND HIS MARRIAGES In 1939, at the age of twenty-two years Kirk Kerkorian became a professional pilot because of his love for planes. He flew bombers to England in World War II, earning $1,000 a month, tax-free, and trained pilots for the Royal Air Force. Subsequently, “he made his first million dollars buying and selling surplus airforce planes and operating a charter flight business” (Barkan 173). His fledgling company grew because of other Armenians investing in the company in a supportive manner. Thus, Kerkorian made a profit of $104 million with the sale of Trans International Airlines in 1996. From Kerkorian’s first marriage to Las Vegas showgirl Jean Marie Hardy in 1954 he had two daughters Linda and Tracy. His second marriage to tennis star Lisa Bonder came to a bitter end with continued dispute over the increasingly high rate of maintenance Bonder demanded for their daughter Kira born in 1998. Kerkorian’s close association with Las Vegas resulted in his “purchasing hotel sites, then movie studios, a one-seventh ownership of Chrysler, and other businesses” (Barkan 173). In 1999 his business interests continued expanding to casinos, a luxury airline, and a Las Vegas theme park. Forbes Magazine estimated Kerkorian’s assets at $7.3 billion in 1999. KIRK KERKORIAN’S PHILANTHROPISM Significantly, despite his great wealth and financial power, Kirk Kerkorian is an intensely shy person, with a reputation for conducting business honestly, and who jealously guarded his privacy. He desired to stay away from the spotlight, therefore ensuring that no buildings bear his name. According to Barkan (p.173) he has donated more than 20 percent of his net worth in the form of millions of dollars, anonymously to charities, schools, old-age homes and other causes dear to his heart. A large proportion of his philanthropism has been directed towards Armenian causes. For example, Kerkorian’s Lincy Foundation developed the United Armenian Fund (UAF) in 1989 “to bring humanitarian and rehabilitation aid to Armenia” (Barkan 173). The UAF consists of several of the main Armenian secular and religious organizations in the United States; and the fund has helped Armenia with over $235 million in humanitarian supplies. Another example is that during the energy crisis in 1993 and 1994, Kerkorian contributed $14 million to facilitate fuel supply to Armenian homes and offices. Bravo (p.499) states that Kerkorian being a friend and supporter of President Kocharian, has since 2001 donated around $180 million from his personal finances for the improvement of Armenia’s roads and other infrastructure. The Guardian (1998) reiterates that the philanthropist has also contributed a further $200 million to his country of origin. Besides helping the Republic of Armenia, he is the largest donor to Armenian-American causes, which has no precedent in the history of the diaspora. The large number of causes include the Armenian Church, Armenian day schools, and the California Armenian Home in his birthplace Fresno, California. Consequently, the Armenian International Magazine in 1993 named Kerkorian “Man of the Year”. KIRK KERKORIAN’S BUSINESS EMPIRE Kerkorian’s Trans International Airlines had a fleet of jets by the 1960s. He sold the airline for $104 million in 1968, and used part of the amount for buying major interests in Western Airlines and MGM studios in Hollywood (McCracken 94). Among the group of investors who came to dominate the motion picture industry included among others: Kirk Kerkorian, “the Las Vegas gambling and casino tsar” (Hozic 196), who bought MGM. Some of the most radical changes were brought about at MGM. The film studio’s new owner Kerkorian who had become extremely wealthy through investing in casinos, planned to use the MGM logo and “brand name” to build a hotel in Las Vegas. The twenty-five storeyed tower was to have suites with the names of famous stars and public rooms given the names of the studio’s most famous pictures. To finance this project, Kerkorian literally destroyed MGM studios stopping the production of important movies; selling off large portions of the studio lot, overseas theaters, music subsidiaries; closing down the distribution offices and pre-selling the distribution rights to MGM projects to United Artists (Hozic 196). Kerkorian’s speculations continued well into the 1980s. The final part of the various business deals related to MGM was the 1994 opening of Kerkorian’s new MGM hotel in Vegas, which included a “studio tour” in its garden. However, the original company bereft of its own production facilities struggled in court with its last owner, the Italian speculator Giancarlo Paretti (Hozic 196). In 1967, the business magnate started the construction of a new hotel. Later the same year, he purchased the Flamingo hotel to serve as a training location for employees who were to be appointed for work at the huge, new Las Vegas Hilton under construction (McCracken 94). Thus, his vast business empire continued to span airlines, hotels, casinos and Hollywood studios. Most of Kerkorian’s estmated net worth of $2.5 billion had been made buying and selling entertainment companies, therefore dealing in automobiles was a new venture for him. In 1995 Kerkorian made an offer at $55 per share for the 90 percent of Chrysler not in his ownership. After nearly two years, “in a complicated deal Kerkorian gave up the takeover battle in exchange for representation on Chrysler’s board” (Geisst 314). The extensive stakes Kerkorian held in the company increased in value consistently with continued rise in the stock market in the mid-1990s. The company eventually merged with Daimler Benz of Germany, at which time Kerkorian’s stake was estimated to be worth over $1 billion more, totalling $5 billion in assets. The merger of Daimler-Benz and Chrysler will be remembered as one of the most important marriages between two of the greatest automobile companies in the world” (Badrtalei & Bates 313). CONCLUSION This paper has highlighted the story of Kirk Kerkorian, one of the wealthiest Angelinos in Las Vegas. His vast business empire spanned hotels, casinos, film studios, and automobile companies. Kerkorian’s rags to riches story has been examined in detail. The evidence indicates that he was an honest, innovative and bold risk-taker in business, who undertook transactions for the sake of the business processes themselves, rather than for their financial outcomes. Kerkorian was a shy, deeply private person who contributed to various philanthropic causes while avoiding publicity for them. Donating huge amounts from his private holdings, he greatly helped his ancestral homeland of Armenia, as well as the Armenian-American diaspora. WORKS CITED Barkan, Elliott R. Making it in America: A sourcebook on eminent ethnic Americans. California: ABC-CLIO Publications. (2001). Badrtalei, Jeff & Bates, Donald L. Effect of organizational cultures on merges and acquisitions: The case of DaimlerChrysler. International Journal of Management, 24.2 (2007): pp.303-315. Bravo, Karen E. Smoke, mirrors, and the joker in the pack: On transitioning to democracy and the ruleof law in post-Soviet Armenia. Houston Journal of Inter- national Law. 29.3 (2007): pp.489-509. Geisst, Charles R. Monopolies in America: Empire builders and their enemies, from Jay Gould to Bill Gates. Oxford: Oxford University Press. (2000). Hozic, Aida A. Hollywood: Space, power, and fantasy in the American economy. New York: Cornell University Press. (2001). McCracken, Robert D. Las Vegas: The great American playground. Edition 2. The United States of America: University of Nevada Press. (1997). The Guardian. U.S. billionaire Kerkorian gives $200 million to Armenia. St. Louis Post- Dispatch (MO). (July 12, 1998). Retrieved on 8th December, 2010 from: http://business.highbeam.com/435553/article-1G1-56386534/us-billionaire-kerkorian-gives-200-million-armenia Read More