offering to acquire the International site and reimburse him for all of his costs. But Kerkorian kept building. Early in 1968, about six months after his 50th birthday, Kerkorian closed another massive transaction that made Hughes’ s threats and bluster even less relevant. He sold Trans International again, this time outright to San Francisco-based Transamerica Corporation. For the first time in 20 years, the aviator was no longer in the aviation business. But he was still a gambler and on a roll, feeling the time was right to go for an even bigger score. His net worth swelled to $ 200 million.
Kerkorian placed the first in a series of bets on something he called“ the leisure industry.” His plan was to assemble a collection of resort, transportation and entertainment properties, a vision that would alter the landscapes of Las Vegas, Hollywood and Detroit.
With steel girders still going up on Paradise Road and Hughes still trying to run him out of Las Vegas, Kerkorian surprised Wall Street with a $ 67.5 million tender offer for the nation’ s oldest commercial air carrier, Los Angeles-based Western Air Lines. Part of the attraction was economic. The regional gem of an airline was hoping to be awarded profitable new routes to Hawaii. Another attraction was personal. Kerkorian was having regrets— some might call them separation anxieties— since selling off his long-held charter airline.
However, on his way to becoming Western’ s largest shareholder, Kerkorian also picked up another rival. The airline’ s bombastic president, Terrell C. Drinkwater, and his handpicked board of directors greeted Kerkorian’ s unexpected investment with suspicion that morphed quickly into hostility. Efforts to reassure them that Kerkorian supported management and planned no changes at the top failed to ease tensions. Drinkwater opposed any power sharing and worked to block Kerkorian’ s influence with Western’ s board.
Back in Las Vegas, Kerkorian’ s other rival was trying a new tactic. Hughes had bought the unfinished and much more modest Landmark Hotel and Casino out of bankruptcy. It was, however, just across Paradise Road from the International. Hughes was going to bring competition to Kerkorian’ s doorstep. The showdown on Paradise would feature dueling grand opening extravaganzas.
But Kerkorian relished competition, and Hughes was playing into his hands. The world’ s biggest hotel would open with some of the world’ s biggest stars. Hughes headlined with comedian Danny Thomas who drew a respectable crowd. Kerkorian opened with“ Funny Girl” Barbra Streisand, followed immediately by Elvis Presley, smashing every box office record in Las Vegas history.
It marked the end of Hughes’ s frustrated bid for supremacy. Kerkorian would be the last tiger standing in Las Vegas. He would go on to transform the gambling mecca, three times building the world’ s biggest hotels. Hughes later complained to Maheu that Kerkorian was“ the first man I couldn’ t buy or break.”
Within days of the International Hotel’ s sensational opening— and while still sparring with Drinkwater over a place on the board of Western Air Lines— Kerkorian shoved another stack of chips into play with another tender offer. This time he was betting on Hollywood’ s crown jewel, MGM studios.
In 1969, the legendary movie company that had produced such classics at“ Gone
Kirk Kerkorian in the early- to mid-1950s.
With the Wind” and“ The Wizard of Oz” was neck-deep in red ink and sinking fast. It was losing $ 10 million a month with likely box office duds projected well into the next year.
But Kerkorian saw hidden value, even before the age of cable television, in MGM’ s extensive film archives. The studio’ s real estate holdings included a back lot looking obsolete as more filming was scheduled on location. And Kerkorian saw a potential dollar value even in the cache of the studio’ s name, a trademark conveying images of class and glamour. He wanted to own what he called those“ three magic letters.”
Once again, however, he found himself locked in competition with a strong-willed rival, this time MGM’ s newly-appointed CEO, Edgar M. Bronfman, Sr. The Canadian-born financier also ran US operations for his family’ s Seagram’ s liquor empire and was a major MGM investor. Bronfman and his MGM board had anticipated a possible bid from Hughes. But“ Kerkorian who?” was their first reaction to this surprise tender offer.
Bronfman challenged Kerkorian in court and in the boardroom, forcing Kerkorian
Courtesy of Una Davis
24 FINANCIAL HISTORY | Summer 2018 | www. MoAF. org