The Gambler

by William C. Rempel

  What was a bleak prospect on the Turner side wasn’t particularly popular on the Kerkorian side either. Kirk didn’t want CNN. And he liked Ted.

  Team Kerkorian had mixed feelings. Picking up some of the prime pieces of Turner Broadcasting looked like a golden opportunity to expand an entertainment empire into cable. Plus, it required so little effort, so little risk—as in none whatsoever. They just had to sit back and let the weight of debt crush Turner.

  “You don’t have to do anything,” Terry Christensen advised Kirk. “We can all go off and play tennis. It’s going to happen even if we do nothing.”

  The problem was Kirk. He, too, was pulling for Ted to make it. “I don’t want him squashed,” he told his team. “Ted’s a good man. He doesn’t make excuses. He tries to do the right thing.”2

  Kirk’s agreement to buy back United Artists simultaneously with the March 1986 close of their original deal had effectively reduced Turner’s cash investment burden by nearly a half-billion dollars. Ted also managed to sell what remained of the MGM back lot to Lorimar-Telepictures for $190 million.

  Barely two months after Ted took over MGM, it was clear he still needed substantially more cash to stay afloat. Kirk stepped back into the picture, offering $300 million to reacquire MGM film and TV production units, its home video division, and the MGM logo. So, in a matter of weeks after he sold the studio, Kirk bought it back—lock, stock, and Leo the Lion—for a fraction of the sale price.

  Turner controlled MGM so briefly that he joked, “I never even had a chance to use a casting couch.”

  Some in Hollywood didn’t think Kirk did Ted much of a favor, selling high and buying back cheap. But for a billion dollars Turner ended up with what he wanted in the first place—Gone With the Wind and a priceless film library.

  The preferred TBS stock with a 14 percent dividend that threatened to blow a hole in Ted’s dreams also threatened to undermine the best interests of cable operators across the country. Once John Malone was awake and focused on the real threats behind Turner’s desperate phone call, he took swift action.

  In the weeks that followed, Malone led an aggressive and successful campaign to raise $550 million from cable investors to restructure TBS debt and defuse Ted’s ticking time bomb. Turner would lose some clout through diluted shareholdings to Malone and fellow cable guys, but his name stayed on his rapidly expanding company. He would be a billionaire by the end of the decade.

  The deals were good for Kirk, too, of course. US magazine estimated his net worth at about $600 million and declared him “the richest man in Hollywood.” Other headlines, over stories bemoaning the decline and fall of MGM, declared him “The Most Hated Man in Hollywood.”

  Friends noticed that Kirk seemed to be losing interest in the rebuilt and highly successful MGM Grand Hotel. He skipped executive committee meetings. He stopped offering suggestions. He didn’t complain, either, so management didn’t take notice.3 Those who did notice weren’t surprised, however, when they woke up to news accounts that Bally’s Manufacturing had agreed to acquire both the Las Vegas and Reno hotels for $550 million, including $110 million in assumed debt.

  The deal gave Bally’s the right to keep and exclusively use the MGM name and logo on its Nevada hotels for three years. And because there were still pending fire claims and court appeals that posed liability risks Bally’s refused to assume, Kirk agreed to assume them personally. Public shareholders received about 20 percent more per share than Kirk who, in turn, would make up the difference only if the legal issues ultimately resolved in his favor.

  “Who does such a thing,” said an incredulous Terry Christensen—who soon after took over as president of Tracinda.4

  Kirk then turned back to the movie business. With MGM/UA reconstituted, but homeless since Lorimar took over its back lot, Kirk moved the studio’s business operations to an office building off Santa Monica Boulevard in Beverly Hills. It posed a very different challenge for Kirk. MGM was barely a shell of its former self. Kirk faced the task of rebuilding MGM/UA, already stripped of its hidden value, pretty much from scratch.

  The first thing he did was invoke history, persuading high-level management prospects like Lee Rich—a founder of Lorimar—to take the reins of a company once run by Louis B. Mayer and Irving Thalberg. It was a chaotic and unsatisfying time for Kirk. But sometimes he still got lucky.

  A relatively small movie under development for United Artists was slowly edging toward a start date with a budget that might require Kirk’s stamp of approval. It was a road story about two brothers, one a greedy, self-absorbed yuppie and the other an autistic savant. Nothing about it suggested a blockbuster—but it already had Dustin Hoffman and it looked good for Tom Cruise as the other important member of the cast. In the turmoil of constant management turnover and Kirk’s uncertainties about the movie business, Rain Man never got the typical green; it never got killed, either. UA’s Lee Rich simply kept Kirk from pulling the plug on its $25 million budget. And it got made.5

  Rain Man won the Academy Awards for Best Picture and Best Actor. It grossed $355 million worldwide. It put MGM/UA back on the Hollywood map of major players. The management chaos continued. But the Beverly Hills office was an easier commute than Culver City.

  Kirk now lived on a hilltop compound at the end of a winding road called Wanda Park. It was really a collection of properties. He had sold one of the parcels, the property with the biggest house, to Sonny and Cher. He bought it back after their 1975 divorce. He sold it again to Sylvester Stallone in the early 1980s and bought it back after Sly completed a major renovation. It had a pool and tennis court and privacy. Kirk had purchased several parcels adjoining the property so that he would have no neighbors—unless, of course, he picked them personally.

  The second house was smaller, about eighteen hundred square feet, no bigger than a modest cottage in the Hollywood Hills. But as Kirk said, “It’s got a bedroom, a living room, and a kitchen. What more do I need?” It was also especially private and it had the better of the property’s two tennis courts. It was perfect as Kirk’s bachelor pad. It was also the site for his regular weekend tennis marathons with collections of old friends who engaged in spirited competition and lively luncheons. Valet Ron Falahi became Kirk’s regular chef for those occasions.

  Kirk’s favorite guests for dinner at the Wanda Park house were neighbors from a couple hills away, Cary Grant and his wife, Barbara. It was in honor of the couple’s shared British heritage that Chef Ron took his first stab at Yorkshire pudding. Cary proclaimed it good stuff.

  The Grants were familiar passengers on Kirk’s private jet. They spent a couple of extended summer trips together cruising the coast of Alaska as families, with Cary’s daughter, Jennifer, and Kirk’s girls, Tracy and Linda.

  Cary Grant regarded Kirk as “a brilliant man” who studied things carefully, a self-made man who retained his common touch. Kirk talked about Cary as “a true friend . . . such a humble nice man” and as “a supersmart” businessman whose contributions he especially valued on the boards of MGM Film and MGM Grand Hotel.6

  So it came as such distressing news when Cary’s wife, Barbara, called early one evening in November 1986 with an urgent request: Could Kirk please send his plane right away to Davenport, Iowa? Cary was ill.

  The eighty-two-year-old movie star had been scheduled for a black-tie event, “An Evening with Cary Grant” at the sold-out Adler Theatre in downtown Davenport, part of the Quad Cities’ annual Festival of Trees. He had fallen ill during afternoon rehearsals and retired to suite 903 at the Hotel Blackhawk to rest.7

  He was still feeling sick at showtime and the tuxedoed crowd groaned in disappointment when it was announced that he would be unable to perform.

  At the hotel, Cary’s condition worsened. Barbara called paramedics at about 9 p.m. A short time later, she called Kirk from St. Luke’s Hospital. They discussed getting him back to Los Angeles and to his personal physicians as soon as possible. Kirk started to round up a flight crew.
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  Less than two hours later, he called off his crew. Cary was dead. He had suffered a massive stroke. The world had lost a movie icon. Kirk had lost a best friend.

  Kirk was a man easily moved to tears. He hated funerals. He hated making a spectacle of himself “blubbering and snuffling.”8

  But Cary’s wife, Barbara, and daughter, Jennifer, persuaded Kirk to help them with one final tribute. The three of them took a boat out into the Santa Monica Bay carrying along an urn with Cary’s ashes.

  In a solemn moment, far enough offshore that no one else could see any blubbering and snuffling, Kirk helped scatter Cary Grant’s ashes on the gentle blue-green swells of the Pacific.9

  31

  Among the Billionaires

  December 7, 1988

  Spitak, Soviet Armenia

  The earthquake struck shortly before noon. It lasted only twenty seconds. Survivors remembered the human screams and the otherworldly shrieking sounds from walls, roofs, and whole buildings being ripped apart by some unseen monstrous force. Towns and villages collapsed into rubble that became instant graves for thousands of people. In twenty seconds fifty thousand lives ended. Hundreds of thousands of victims were left homeless, hungry, and cold. More than a hundred thousand serious injuries overwhelmed emergency medical services. Reports on the devastation and the vast human misery produced an outpouring of public sympathy and aid from around the world.

  In Southern California, home of the largest Armenian community outside the Soviet Union, churches and charities of the diaspora scrambled to help. Some worked together. Most worked independently. Old rivalries persisting through the decades made a united Armenian American response appear unlikely.

  One thing they all had in common was Kirk Kerkorian’s phone number. One by one, the representatives of various groups managed to arrange individual meetings with America’s richest Armenian. Each asked for millions—to rebuild schools, to build a hospital, to construct housing, to do good things for Armenia. One clergyman proposed a $50 million gift to do all those things—“something big,” he said.

  “Build a new town,” he said. “It could be Kerkorian City!”1

  But that sales pitch landed more like a gut punch. The very private Kerkorian wanted his name on nothing. Two things characterized Kirk’s charitable giving: generosity and anonymity. Like the old 1950s television show The Millionaire, Kirk’s gifts came with strict admonitions that he could never be identified as the source—no Kerkorian name on buildings or street signs, no banquets in his honor, not the simplest public expressions of gratitude, not even a public reputation for generosity.

  “If you expect something in return for your charity, it isn’t charity,” he told friends.2

  Immediately after the quake, Kirk made secret donations of nearly a million dollars each to three different Armenian charities. Absolute anonymity was demanded, as usual. But on this occasion, the secrecy backfired. He was seen as simply indifferent to the plight of Armenia. One Armenian American newspaper, unaware of Kirk’s secret gifts, even criticized the world’s richest Armenian for doing nothing.3

  Kerkorian tried not to show his chagrin. But he also decided it was time to create a more transparent philanthropic organization, set up with its own management team and operated under the laws governing California charities.

  Thus was born, out of the sting of that uninformed criticism, the Lincy Foundation—a spinoff from Kirk’s holding company, Tracinda Investment. Both companies blended the names of Kirk’s daughters, Tracy and Linda. Half of the charity’s initial endowment was made up of MGM stock, valued at about $110 million.

  Months later in 1989, Kirk was still exploring the best way to deliver meaningful help to victims of the Armenia earthquake when he was contacted by journalist Harut Sassounian, an Aleppo-born Armenian American living in Glendale, California. He was publisher of the California Courier, a weekly English-language Armenian newspaper started forty years earlier by Kirk’s friend and stockbroker George Mason. Harut was something of a firebrand whose opinion columns typically criticized the Turks, advocated for public recognition of Turkey’s role in the Armenian genocide, and crusaded against Armenian government corruption. Kirk read him regularly.

  Early in 1989 Kirk had briefly flirted with the notion of taking over the Hearst-owned Los Angeles Herald Examiner, the city’s scrappy number two daily paper. He called to see if Harut might consider serving as CEO of the newspaper company. But the thirty-nine-year-old was uncertain. He offered to help recruit “a more qualified” publishing executive. Instead, Kirk dropped the matter, and in a few months the Herald Examiner closed.

  On a morning late in 1989, Harut started his day looking into a story about how earthquake relief supplies were piling up by the ton in closets, garages, and warehouses across the United States. Nearly a year after the disastrous quake, there was still no coordinated transportation system in place to deliver those mounting stores of donated relief material to needy victims in Armenia. He decided to do more than simply write about it. He called Kerkorian’s office. Through his friend George Mason, Harut asked for a meeting with Kirk. It was about an earthquake aid proposal, he said without elaboration. Response was swift.

  “Mr. K is waiting at his office. Be there by 1 p.m.,” Mason said.

  Harut was confident of Kirk’s generosity. News about creation of the Lincy Foundation and its huge endowment spoke for itself. But unaware of Kirk’s prior gifts to Armenian causes, Harut wasn’t so sure what to expect from Kirk. The financier seemed aloof to Armenian politics, what Harut and other activists sometimes dismissed as “shish-kabob Armenians.” This would be a test. Harut would be proposing costly disaster relief that was already tangled up in politics.

  At Kerkorian’s Beverly Hills office on Wilshire Boulevard, a receptionist pointed Harut to the conference room door. “He’s waiting for you,” she said.

  Pushing through the door, Harut found four men waiting around a long table—Kirk, Mason, Jim Aljian, and Kirk’s new accounting executive, Alex Yemenidjian. They were all seated. He was still standing, trying to figure out which chair he should take, when Kirk spoke up, “Harut, what’s your idea?” There would be no small talk on this afternoon. Harut sat down and proposed launching an airlift to Armenia.

  Kirk the aviator and former charter airline operator was immediately receptive. Harut suggested that the Lincy Foundation and six other Armenian charities band together as a pan-Armenian group to charter a cargo jet, split the cost of a $350,000 charter, and then all work together to fill it with donated supplies—keeping in mind that another cruel Caucasus winter was fast approaching. Kirk interrupted.

  “You’re saying we would split the cost of the plane?”

  Harut nodded.

  “That’s about $50,000 each?”

  Harut nodded again.

  “And the other groups have agreed to this?”

  “I haven’t asked them,” Harut responded. He thought he detected a slight smile.

  “You haven’t talked to any of the others?”

  “I haven’t even talked to my wife!” Harut blurted. “She doesn’t know I’m here.”

  Kirk broke into a full grin, then asked another question: “You know, Harut, Armenians—they don’t all dance to the same drummer. How do you know they’ll say yes?”

  “I don’t,” he said, shrugging. “I’m here to see if you’re interested.”

  “And you’re asking me for $50,000 . . . just like everybody else?”

  Harut nodded again.

  “Well—” said Kirk, sitting forward with all eyes in the room turned to him. “Here’s my counterproposal. I’ll pick up the entire expense of the airlift. I’ll charter the plane. Your job is to work together with all the other organizations to fill that plane.”

  Kirk authorized Harut to tell the other charities that he was in, and he would guarantee delivery of all the material and relief supplies that they could assemble. As Harut stood to leave, Kirk added one more thing, “You know, I real
ly like this idea. I like it so much that if those others say no, you come back here—we’ll do it together, just you and me.”

  But Kerkorian’s personal role had made unity an easy sale. All the groups signed on to participate as one under the banner of the United Armenian Fund. The UAF, in turn, was launched under the leadership of Kerkorian aide Yemenidjian. And Kirk’s wish for Armenians to work together finally seemed a reality. He insisted that all six of the other charities understood from the start: “The only thing that’s nonnegotiable is unity.”4

  On December 1, 1989, a chartered Boeing 707 loaded with $5 million in care packages left Los Angeles on a sunny seventy-degree day with Harut Sassounian on board, en route to Yerevan, the capital of Soviet Armenia.

  Harut wasn’t expecting a brass band and cheerleaders, but he was surprised when no one at all showed up to help off-load the pallets of food, medicine, and warm clothes. The forklift operator was busy. He was in the crew lounge watching a televised soap opera. He was expecting a $100 “facilitation fee,” a bribe that Harut refused to pay. If the first thirty tons of desperately needed supplies required a facilitation fee, corruption would almost certainly jeopardize future shipments. The standoff ended when Harut confronted the forklift operator at the TV set and warned him in perfect Armenian, “You have five minutes or you won’t have this job tomorrow.”

  As the first anniversary of the earthquake dawned a few days later, Harut was making his first delivery of food boxes to a homeless camp on a windswept mountainside in northern Armenia. There were three feet of snow on the ground when his convoy of trucks pulled to a stop. Dozens of families lived huddled together for warmth in a village of tattered tents staked to the frozen ground.

  Harut guessed it might be minus-ten degrees as he walked to the first tent with an aid worker. He found a family of four, shivering from the raw winds blowing through holes in their tent. Harut held out a box of provisions, but the man made no move to accept it. He seemed suspicious and confused, wary of uninvited strangers who were about as welcome in his tent as the north wind.