MGM Grand’s founder was born Kirk Kerkorian (June 6, 1917 – June 15, 2015).
In 1969, while Howard Hughes was fiddling with his soon-to-open Landmark property, Kerkorian was building the largest hotel in the world. His International opened with Elvis Presley in its showroom. Barbara Streisand followed his 30-day gig. They were a hell of a one-two punch!
Kerkorian was born in Fresno, California and spoke only Armenian until he began attending school.
He only completed the eighth grade before dropping out and going to work. With time on his hands, Kerkorian learned to box, eventually winning the Pacific amateur welterweight championship under the direction of his older brother Nish.
As the Second World War rumbled across the globe, Kerkorian learned to fly at the Happy Bottom Riding Club in the Mojave Desert. He traded milking cows for flying lessons and earned a commercial pilot’s license, but he didn’t join the US Army Air Corp. Instead, he worked with the Royal Air Force Ferry Command to deliver Canadian-built planes to Europe. Always an entrepreneur.
Kerkorian was frugal and saved most of his pay during the war years. In 1944, he purchased a used Cessna for $5,000 and made his first visit to Las Vegas. During the next three years, Kerkorian gambled, flew charters, and somehow managed to buy Trans International Airlines, a gaming shuttle service out of Los Angeles.
Rumors and legends grew.
Kerkorian and Las Vegas
There is a story that Kerkorian financed his charter service purchase with a loan from the Seagram Gin Company headquartered in Montreal, Quebec, Canada.
It could be true. He was a smooth-talking salesman.
It’s also rumored that he recouped most of the purchase price by selling thousands of gallons of airline fuel included with the sale. A shrewd purchase perhaps, but nothing compared to building the airline into a major carrier and selling it in 1968 for $104 million.
How did he do that?
In the interim, Kerkorian purchased land, including 80 acres across the Las Vegas Strip from the famed Flamingo Hotel.
Jay Sarno leased the land and built Caesars Palace before purchasing the property in 1968 for $9 million.
Kerkorian made just over $8 million profit from the sale.
This dude had x-ray foresight and a lot of guts.
Next, he poured his profit into building the International Hotel on 82 acres of land down the strip. The opening of the hotel during the summer of 1969 set lodging and showroom records as Elvis Presley packed the resort with gamblers for 30 days straight.
The good fortune led Kerkorian to purchase the Flamingo Hotel.
Purchasing Metro-Goldwyn-Mayer Studios
Kerkorian had a banner year in 1969. Not only did he open the largest hotel in the world, but he also purchased the struggling Metro-Goldwyn-Mayer movie studio.
The sale included films, trademarks, memorabilia, land and much more. Still, he got a hot price on the deal because MGM was struggling financially.
In fact, the studio became a huge sinkhole, draining time and money from Kerkorian.
So, MGM had a fire sale, dumping their British MGM studio at Borehamwood, selling a sprawling studio backlot in Culver City, California, and turning loose irreplaceable movie memorabilia.
To help with cash-flow issues, Kerkorian sold his 30-story International Hotel to Hilton Hotels in 1970. It quickly became the most successful hotel in Las Vegas.
Two years later, Hilton purchased his Flamingo Hotel. In 1973, Kerkorian sold MGM’s famed distribution system and opened the MGM Grand Hotel and Casino on the Las Vegas Strip.
Once again, he owned the largest hotel in the world. That was important to him.
After opening the MGM Grand Reno in 1978, the company split into two separate entities; the gaming side was renamed MGM Grand Hotels, Inc. The two casinos accounted for most of the two company’s income, and Kerkorian retained a 47 percent interest in each company.
Disaster struck the MGM Grand in Las Vegas on November 21, 1980, when a fire sparked in a closed restaurant called The Deli. By the time the fire hit the lobby, it was an intense fireball that shot through the casino and out the main entrance along The Strip.
The intense heat killed seven people in the casino. Another 78 died on upper floors of the hotel and in stairwells from other causes, mostly smoke inhalation. There were no fire sprinklers in The Deli.
Fortunately, while fire and rescue departments in the Las Vegas vicinity responded and helped with the evacuation of guests, more than 1,000 people were rescued from the roof by helicopter.
The majority of those were flown out in CH-3E choppers from the 1st Special Operations Wing from Hurlburt Field, Florida. The unit had been deployed to Nellis AFB just outside Las Vegas to participate in Red Flag ’80.
Truly an amazingly fortuitous coincidence.
The hotel was shut down but reopened eight months later with an additional tower that had been under construction when the fire hit.
Five years later, Bally Manufacturing purchased the resort for $594 million. It remains open today as Bally’s, sitting pretty at the corner of Las Vegas Boulevard and Flamingo Avenue.
Down the strip at the corner of Las Vegas Boulevard and Tropicana Avenue, Kerkorian bought the Marina Hotel and renamed it the MGM-Marina Hotel. MGM Resorts International formed in 1986 as part of Kerkorian’s Tracinda Corporation (a combination of his daughter’s names, Tracy and Linda).
Kerkorian was married three times and often described as intensely private about his family. He didn’t venture out much and was rarely seen at his resorts.
He hated to give interviews or attend board meetings, but guided his company from outside, even into his eighties.
The New MGM Grand, Incorporated
Kerkorian sold MGM Studios to Ted Turner but regained part of the company years later. Every deal for land or Hollywood products made him a richer man.
In 1988, MGM Grand purchased the Desert Inn and Sands casinos from Howard Hughes’s company, Summa Corporation, for $167 million. It recouped $110 million by selling the Sands to Sheldon Adelson’s Interface Group for $110 million.
He razed the property and built the Venetian.
The Desert Inn property turned out to be too small for Kerkorian’s plans, so construction on a new MGM Grand Las Vegas began in October 1991 at the former MGM-Marina site. It opened late in 1993 at the cost of $1 billion.
Today, the property has 5,124 rooms and is the largest hotel in the world.
Not everything at the resort has been perfect.
A great deal of money was spent on the MGM Grand Adventurers theme park, and the casino entrance featured a giant MGM logo lion entrance.
Unfortunately, walking through a lion’s mouth was considered very unlucky by gamblers, so it had to be changed. It was expensive.
Not nearly as expensive as building and then shutting down the theme park. It limped along for years, finally closing in 2002. Vegas is still predominantly a place for adults, not children. Live and learn.
MGM Mergers and Acquisitions
MGM executives did learn, and they prospered. The casino was very successful.
In 1994, Gary Primm’s Primadonna Resorts joined MGM to build the New York-New York casino across from the MGM Grand.
The first of many new properties to open in the next decade that made MGM the largest gaming company in the world.
MGM bought out Primadonna in 1999. The following year, MGM Grand offered to purchase Steve Wynn’s Mirage Resorts for $17 per share. Wynn countered at $21 per share, and the company became MGM Mirage and included the Mirage, Bellagio, Boardwalk, Treasure Island, and Golden Nugget casinos in Las Vegas.
Also included were the Golden Nugget in Laughlin, Beau Rivage in Mississippi, a share of the Monte Carlo in Las Vegas, and the soon-to-open Borgata in Atlantic City.
MGM paid $4.4 billion and assumed $2 billion in debt.
Expansion of the MGM’s gaming empire continued in 2004 when it purchased Mandalay Resort Group, which included casinos like Circus Circus, Mandalay Bay, and the Luxor. That purchase had a $7.9 billion price tag.
It took MGM from big to huge!
Today, MGM Resorts International owns a huge piece of the Las Vegas Strip. Properties include:
Mandalay Bay Convention Center
Mandalay Bay Events Center
MGM Grand Garden Arena
Skylofts at MGM Grand
The Mansion at MGM Grand
The Signature at MGM Grand
New York-New York
Las Vegas Festival Grounds
Yeah, that’s a mouthful. The company’s huge.
Properties outside Las Vegas include the Beau Rivage, Borgata, The Water Club, Gold Strike, Grand Victoria (50% joint venture), MGM Cotai, MGM Grand Detroit, MGM Grand Sanya, MGM Macau (50% joint venture), MGM National Harbor, MGM Park, and the under-construction MGM Springfield.
Today, MGM Resorts International employs more than 63,000 people.
The company recently reported nearly $10 billion in earnings and continued to expand its gaming reach to new properties across the globe. If they can pay down their debt, they will be unstoppable.