Kirk Kerkorian, who bought and sold MGM and United Artists three times until they were mere shells of their former selves, has died. He was 98.
Kerkorian died at his home in Beverly Hills on Monday evening, said Anthony Mandekic, the president and CEO of Kerkorian’s company Tracinda Corp.
Kerkorian made his money in aircraft and real estate, and entered the motion picture business in 1969 when he bought Metro Goldwyn Mayer. MGM was founded in the 1920s and became the symbol of the “studio system” in the next few decades. Kerkorian himself became a symbol when he purchased MGM: He was known to few people in Hollywood, and seemed the epitome of the barbarian outsider who saw showbiz as a bunch of assets and resale opportunities, with no concern for art or tradition — or of building or expanding the filmmaking.
He may have been a philistine, but he was a successful money man. Twelve years after acquiring MGM, he bought United Artists in 1981 and sold them both to Ted Turner in 1986 for $1.5 billion. Turner, himself a smart mogul, wanted the companies’ film libraries (which included pre-1986 MGM and pre-1950 Warner Bros. films). Five months later, Kerkorian bought back the MGM name, all of United Artists and the MGM lot in Culver City, for $470 million. The studio lot was then sold to Lorimar-Telepictures, which Warner Bros. later acquired.
In 1990 Kerkorian sold MGM/UA for a second time, to Giancarlo Parretti’s Pathe Communications for $1.36 billion. He made $996 million on the deal and still retained use of the MGM name, which he eventually attached to his new hotels, a theme park in Las Vegas and on an exclusive, transcontinental airline.
Parretti defaulted on his loans, leaving the studio in the hands of Credit Lyonnais. The French bank worked to revive the studio but then in 1996 sold it to Kerkorian, marking his third time as buyer of MGM. This time he worked to expand the company, not through production but via acquisitions: He purchased Orion Pictures, the Samuel Goldwyn Co. and Motion Picture Corp. of America from John Kluge’s Metromedia in 1997. He also bought a majority stake in the pre-1996 PolyGram Filmed Entertainment library from its parent Philips, which was in the process of selling PolyGram to Seagram.
In 2005 Kerkorian sold MGM a third time, to a consortium led by Sony, retaining a 55% stake in MGM Mirage.
Under his reign, MGM and United Artists gradually disintegrated until their libraries and real estate were more highly prized than the production and distribution elements. Ultimately mostly debt and inertia remained.
Much of Kerkorian’s history with Hollywood is a story of selling portions of the studios. After Kerkorian’s initial buy of MGM in 1969, he named James Aubrey topper, who immediately sold off many domestic and overseas assets, including most of the studio’s backlot in Culver City and the British MGM studio at Borehamwood, plus film-history memorabilia, including Dorothy’s ruby slippers from “The Wizard of Oz.”
In 1973, Kerkorian took over from Aubrey and sold MGM’s distribution system.
He used and reused the MGM trademark and Leo the lion logo repeatedly. He also contracted with Disney for the use of MGM characters and trademark as part of its Disney/MGM studio tour in Florida.
However, MGM wasn’t the only Hollywood property that interested him. In 1976 he bought a 25% stake in Columbia Pictures. After a bitter battle over antitrust violations (he won) and with Col’s management (he lost), he gave up the ghost in 1980 — with a neat $70 million buyout profit. In 1984 he made a run at Disney but was again thwarted.
His new holding company, Tracinda Corp., was more successful in 1981. The post-“Heaven’s Gate” United Artists was dumped in his lap by the befuddled Transamerica for $380 million, expanding MGM’s library and production capabilities. But that brought the studio’s debt level to $675 million. In 1982 MGM/UA Home Entertainment was created as a public company, and Kerkorian sold 15% of its stock to the public only to then buy it back. It was not the only time he tried to sell stock in all or part of the company, and at one point he even tried to take MGM/UA private.
The revolving door of executives at the two studios included David Begelman, Freddie Fields, Jerry Weintraub, Frank Yablans and Alan Ladd Jr. The hits were rare in those years. Highlights included “The Goodbye Girl,” “Network,” “Poltergeist” and “Yentl.” MGM and UA both became shells of their former selves and, for a time, UA was completely out of the production business.
The MGM lot was eventually sold to Lorimar, which was taken over by Warner Bros. In 1990, the MGM lot was sold to Sony’s Columbia TriStar Pictures in exchange for the half of Warner’s lot it had rented since the 1970s.
In 1993, the 2,000-room MGM-Grand in Las Vegas opened. Kerkorian had licensed from Turner the rights to use MGM characters and titles for his theme park in Vegas after winning a lawsuit by Disney barring him from doing so.
Thereafter Kerkorian would use any profits from MGM to pay off his existing debts — while at the same time taking over 80% of the company. The MGM Grand Hotels in Las Vegas and Reno were eventually sold to Bally’s for more than $500 million.
During all of his wheelings and dealings, he was embroiled in numerous lawsuits. Some were slapped on him by UA shareholders and French bank Credit Lyonnais (which took over MGM/UA from Parretti). He often countersued. Some suits were dropped, others were settled for cash.
Kerkorian, the youngest of four children of an Armenian fruit merchant, was born in Fresno, Calif. Four years later his father’s once-prosperous business went bankrupt and the family lived a migratory and impermanent life, he told Fortune magazine in a rare 1969 profile. “We moved at least 20 times when I was a kid,” he recalled. “We could often not pay our rent and we would get booted out after a few months.”
Kicked out of junior high for truancy and fighting, he was sent to a school for delinquents and to another where he briefly studied automotive repairing.
At 17 he worked for the Civilian Conservation Corps and a variety of other odd jobs — including one night as part of an MGM construction crew. In 1937, he turned to boxing and over the next year lost only four of 33 fights.
But his first air flight changed his life. He became so enamored of flying that he worked an extra job to pay for lessons. After getting his commercial pilot’s license he worked as a flight instructor at King City Air Academy and a flight commander at Morton Air Academy.
During WWII he served as a captain in the U.K.’s Royal Air Force Transport Command, flying across the Atlantic and even to Africa and India — at the princely sum of $1,000 a month. He saved that money and bought a Fairchild F-24 to teach flying.
After the war there was more profit in the conversion of war-surplus military planes to commercial use. His profits were sixfold, enough to launch a nonscheduled air service in 1947. But when the government began cracking down on such services in the early ’50s, Kerkorian went back to repairing and reselling aircraft. By 1960 his Los Angeles Air Service was in the charter business and he changed its name to Trans Intl. Airlines. Kerkorian then bought himself into the military-contract business. TIA’s earnings climbed from around $250,000 in 1961 to more than $1 million a year later when he sold TIA to Studebaker.
In a maneuver he would use many times later, however, he retained operating control of TIA and with the Studebaker financial backing bought more planes, increasing the airlines commercial and military contracts. In 1964, he bought it back at the same price he’d sold it for — a tactic that would come in handy later with MGM/UA. Taking the company public in 1965, he sold 58% interest to Transamerica for $85 million in stock three years later. In 1969 he sold the Transamerica stock, realizing $104 million in profit on the entire transaction.
Kerkorian was a very private man, though he had a number of close celebrity friends, including Cary Grant. He was married to Hilda Schmidt in 1942 and they were divorced in 1951. In 1954 he married Jean Maree Hardy, a former Vegas dancer. They had two children, Tracy and Linda.
His brief third marriage in 1999 to pro tennis player Lisa Bonder led to some very embarrassing publicity. Bonder had a child before the marriage whom she claimed was Kerkorian’s; she was seeking an increase in child support from $50,000 to $320,000 a month.
Kerkorian and his attorney, Terry Christensen, suspected that the father of the child was another corporate exec. A judge ruled that Bonder had fraudulently sought to convince the court that Kerkorian was the father by obtaining the DNA of an adult Kerkorian daughter. On the other hand, Christensen was ultimately sentenced to three years in federal prison for conspiring with private investigator Anthony Pellicano to wiretap Bonder’s phone in order to gain a tactical advantage in the Kerkorian divorce proceedings. Kerkorian testified as a defense witness at the trial of Christensen, a close associate.