How Penniless Dropout Kirk Kerkorian Became The Greatest Deal Maker In Capitalist History

Summary Notes


In the latest Founders podcast episode, the host delves into the extraordinary life of Kirk Kerkorian, an enigmatic American businessman whose journey from an eighth-grade dropout to a billionaire dealmaker is chronicled in the book "The Gambler." Kerkorian's story is one of relentless resourcefulness, from his early days as a day laborer at MGM Studios earning $2.60 a day to owning the studio and earning $260,000 a day. The episode explores Kerkorian's ventures, from teaching himself to fly and creating a profitable charter airline to building the largest hotel in Las Vegas. His aversion to the limelight and his philanthropic efforts, often done anonymously, highlight his unique character. The host's admiration for Kerkorian's ability to learn and adapt, paralleling the traits of other successful entrepreneurs discussed on the podcast, is evident throughout the narrative.

Summary Notes

Access to Founders Podcast Back Catalog

  • Subscribing to Founders provides access to over 160 full-length episodes exclusive to subscribers.
  • New episodes are released weekly, along with previews.
  • Founders is a private, ad-free, subscription-only podcast.
  • Subscribers can listen to full episodes by upgrading their subscription.

"One of the benefits to subscribing to Founders is access to the back catalog. By subscribing, you get access to over 160 full length episodes that are available nowhere else."

This quote emphasizes the exclusive content available to subscribers of the Founders podcast, highlighting the extensive library of episodes not accessible to non-subscribers.

The Story of Kurt Kerkorian

  • Kurt Kerkorian's life journey from a day laborer to owner of MGM Studios.
  • Kerkorian's investment growth from $2.60 a day to $260,000 a day.
  • Founders podcast aims to share wisdom from great minds in history similar to how successful figures like Elon Musk and Jeff Bezos have learned from their predecessors.

"Kurt Kerkorian is not well known, but he led an unbelievable life... He was a day laborer at MGM Studios. He made $2.60 a day. 30 years later, he owned MGM, and his investment was returning $260,000 a day."

The quote outlines the dramatic transformation in Kerkorian's financial status and ownership of MGM Studios, illustrating a rags-to-riches story that Founders podcast seeks to explore and share with listeners.

Learning from Historical Figures

  • Founders podcast encourages learning from the experiences and wisdom of the greatest minds in history.
  • The podcast draws parallels between its educational approach and the learning habits of renowned innovators like Elon Musk, Jeff Bezos, and Steve Jobs.

"By learning from some of the greatest minds in history, you're doing exactly what Elon Musk did, Jeff Bezos did, Steve Jobs and countless other historical figures."

This quote connects the podcast's mission with the learning strategies of successful individuals, suggesting that listeners can emulate these figures by absorbing the knowledge shared in the podcast.

Kirk Kerkorian's Inspiring Life Story

  • Kirk Kerkorian's early life in California and Los Angeles, marked by financial hardship and a fighting spirit.
  • Despite being uncomfortable in crowds and avoiding celebrity, Kerkorian achieved significant business success.
  • His ventures included aviation, real estate, and entertainment, often involving high-stakes investments.

"There is an inspiring life story in the 98 years that belonged to Kirk Akorian... A gambler at the casinos and on Wall street who played the odds in both houses with uncanny skill."

The quote provides a snapshot of Kirk Kerkorian's life, emphasizing his diverse accomplishments and his skill in high-stakes environments, which is a central focus of the podcast episode.

Kerkorian's Business Acumen and Personality

  • Kerkorian was known for his large-scale investments and was referred to as a "deal junkie."
  • He admired Howard Hughes and followed a similar path in aviation, film, and real estate.
  • Despite his wealth, Kerkorian maintained a reputation for trustworthiness and saw a handshake as a binding contract.

"Friends would call him a deal junkie, addicted to financial thrills, whether at a craps table or at the negotiating table. In business, as in gambling, Kirk believed that there was no point in placing small bets."

This quote captures Kerkorian's approach to business and investment, likening his strategic risk-taking to gambling, and highlighting his preference for significant, impactful deals.

Kerkorian's Early Hardships and Values

  • Kerkorian's immigrant father struggled financially, leading to a childhood marked by evictions and learning English in a tough environment.
  • Kerkorian valued trust, loyalty, and hard work, principles that guided his business dealings throughout his life.

"Eviction was a recurring family predicament. He said he studied in the school of hard knocks. It turned out to be an advanced course in survival and the value of trust, loyalty, and hard work."

The quote reflects on Kerkorian's challenging upbringing and the lessons he learned from it, which influenced his personal values and business ethics.

Handshake Agreement and Personal Integrity

  • Kirk's second in command had a handshake agreement to sell the company for $150 million.
  • Another offer came in for $15 million more, but Kirk insisted on honoring the original agreement.
  • Kirk valued his word as a bond, demonstrating a strong sense of personal integrity.

"Well, did you agree? Like, did you make an agreement yesterday? Did you shake and say you're going to sell the company? He's like, yes, I did. And Kirk's like, well, why are we even talking?"

This quote highlights Kirk's commitment to his word and the handshake agreement, showing that he valued integrity over additional financial gain.

Lifestyle and Philanthropy

  • Kirk led a modest lifestyle, traveling without an entourage, carrying his own bags, and driving modest cars.
  • He personally paid for meals and rooms, even at his own hotels, refusing comps.
  • Kirk was a generous philanthropist, giving away millions anonymously and forming a charitable foundation.
  • His belief in anonymous giving as the purest form of charity resulted in a foundation that donated over a billion dollars.

"Donations made anonymously to anonymous person was like the purest form of giving."

This quote encapsulates Kirk's philosophy on giving, where he views anonymous donations as the most sincere and selfless form of charity.

Public Perception and Forced Transparency

  • Kirk's anonymous donations backfired when he was criticized for not publicly supporting Armenia after a devastating earthquake.
  • To counteract negative press, he had to set up a foundation and donate publicly, contrary to his preference for anonymity.

"So that's when he had to set up the foundation and kind of do it more publicly, even though he didn't want to because he was getting bad press undeservedly so."

This quote explains the circumstances that led Kirk to abandon his preferred method of anonymous giving due to public perception and the need to address undeserved negative press.

Personal Philosophy on Life

  • Kirk compared life to a "big craps game" and expressed that he found enjoyment in his experiences.
  • The quote reflects his adventurous and risk-taking approach to life.

"Life is a big craps game. I've got to tell you, it's all been fun."

The quote provides insight into Kirk's personal philosophy, suggesting he views life as a game of chance filled with enjoyment.

Love for Aviation

  • Kirk discovered a passion for flight which led to a major career shift.
  • He transitioned from a potential career in professional boxing to becoming a pilot.
  • This change in direction was sparked by his first experience in a small aircraft.

"Kirk's senses were instantly assaulted by the deafening scream and forceful lurch of the piper's 50 hp engine. But if Kirk was unnerved by the noise, the power, the speed, or second later, seconds later, the altitude, he didn't show it. His big grin said it all."

This quote describes the moment Kirk fell in love with flying, marking a pivotal point in his life that would influence his future career and fortune.

Early Life and Struggles

  • Kirk's family faced financial hardships and frequent relocations during the Great Depression.
  • He started working at a young age to support his family, taking on various odd jobs.
  • These experiences included selling newspapers, caddying, and joining the Civilian Conservation Corps.

"By age nine, Kirk was hawking the Evening Express on street corners, making about fifty cents a day and turning over pocketfuls of pennies to help support the family."

This quote highlights Kirk's early introduction to work and his contributions to his family's income during tough economic times.

Early Career and Odd Jobs

  • Kirk and Norman initially worked hard for $30 a month, which was significant money for them at the time.
  • After the temporary engagement, Kirk returned to Los Angeles and took on odd jobs (OD jobs) for income.
  • One such job involved moving boulders at MGM studios for an underwater film scene, earning $2.60 each for a night's work.
  • This odd job at MGM studios later contrasted with Kirk's future ownership of MGM, where he earned $260,000 a day from his investment.

"The pay was $30 a month, more money than Kirk or Norman had ever made, okay? But that was a limited engagement." "One of the OD jobs he picked up was moving boulders at MGM studios in Culver City... They made $2.60 each." "30 years later, he owned MGM, and his investment into MGM was returning $260,000 a day."

These quotes highlight Kirk's humble beginnings with low-paying jobs and his eventual rise to significant wealth through ownership of MGM, demonstrating a remarkable financial transformation.

Entrepreneurial Ventures

  • Kirk turned entrepreneurial during the mid-1930s due to the scarcity of regular work.
  • He started with a steam cleaning business for car engines, using a rented space at a gas station.
  • His primary customers were used car dealers, and he expanded into buying, trading, and refurbishing old cars for profit.
  • Kirk's entrepreneurial skills were evident in his ability to increase his earnings significantly by fixing up old cars, showcasing his resourcefulness and business acumen.

"Throughout the middle 1930s, Kirk turned entrepreneurial." "He made enough money to start buying and trading old clunkers." "Presto, he could clear a $15 profit."

These quotes outline Kirk's first business venture in the automotive industry, demonstrating his early entrepreneurial spirit and ability to create profit from limited resources.

Passion for Aviation

  • Kirk developed a passion for flying but lacked the funds for flight lessons.
  • To afford $3 an hour flight lessons, he took an extra job as a bouncer and enrolled in night school classes to learn essential math for aviation.
  • He understood the importance of math in aviation, which motivated him to overcome his previous disinterest in the subject.
  • Kirk's determination led him to hitchhike to the Mojave Desert to learn to fly from aviatrix Florence "Pancho" Barnes in exchange for farm work.

"Kirk's new love was flying, and she was a demanding mistress." "He needed more money to pay for $3 an hour flight lessons..." "Sometime around the spring of 1940, a newspaper advertisement caught Kirk's tension... He hitchhikes 85 miles to the Mojave..."

These quotes capture Kirk's passion for flying and his commitment to pursuing it despite financial challenges. They also illustrate his willingness to work hard and seek creative solutions to achieve his goals.

Transition to Aviation Instructor and Pilot

  • After training at Pancho Barnes' flight school, Kirk qualified for a commercial pilot's license and received a job offer.
  • As World War II approached, he was hired by a civilian defense contractor to teach aviation cadets for the U.S. Army Air Force.
  • His strict teaching style reflected his intolerance for mistakes, emphasizing the importance of safety in aviation.
  • Kirk's personality traits, such as punctuality and high demands, were consistent throughout his life and career.

"Kirk came out of Pancho's flight academy barely six months after plunging into intense pilot training..." "His low tolerance for mistakes and recklessness made him a demanding instructor." "There are old pilots and there are bold pilots. There are no old, bold pilots."

These quotes describe Kirk's progression from student to instructor, emphasizing his dedication to safety and discipline. His mantra about pilots underscores the seriousness with which he approached flying.

High-Risk High-Reward Job

  • Kirk took a high-paying job with the Royal Air Force ferry command, flying new warplanes across the North Atlantic for $1,000 a month—a substantial sum at the time.
  • The job was dangerous, with a high mortality rate due to treacherous flight conditions.
  • Despite the risks, Kirk was attracted to the opportunity because of the financial reward and his love for aviation.

"The Royal Air Force ferry command needed contract pilots to fly new warplanes from the North Atlantic for the astonishing sum of $1,000 a month." "You had a one in 40 chance of crashing."

These quotes highlight the high-risk nature of Kirk's job as a ferry pilot during the prelude to World War II, reflecting both the danger involved and the lucrative compensation offered for such perilous work.

Kirkorian's Aviation Career

  • Kirkorian was a contract pilot during the war, engaging in cutting-edge aviation technology.
  • His role involved shooting down German rockets, flying powerful planes, and navigating challenging routes like the North Atlantic.
  • Kirkorian's flying experiences were fraught with danger, as many of his colleagues perished and he himself had a near-death experience in Scotland due to heavy fog.
  • Despite skipping the details, the transcript acknowledges the significance of Kirkorian's piloting as foundational for his later business ventures.

Because they're using these planes to shoot the german rockets out of the sky. He was commanding some of the biggest, hottest, most powerful planes in the air, and he's on the leading edge of technology for aviation.

This quote highlights Kirkorian's involvement in a critical and technologically advanced aspect of the war effort, emphasizing his experience with cutting-edge aviation.

Kirkorian's Transition to Business

  • Kirkorian used his earnings and experience from his contract piloting to seed his own business ventures.
  • After the war, he returned to Los Angeles with a desire to continue flying and be his own boss.
  • He quickly established a pilot training school, which filled up rapidly due to the aviation industry's demand for instrument-rated commercial pilots.
  • Despite the school's success, Kirkorian craved excitement and thus entered the charter business.

So there's a point in all these little anecdotes. Kirk's stint as a contract pilot lasted more than two years through the end of the war in Europe.

This quote underscores the strategic importance of Kirkorian's piloting experience, which provided him with the skills, savings, and the drive that were essential to his future business endeavors.

Kirkorian's Charter Business and Las Vegas Connection

  • Kirkorian's flight school and charter service were profitable, but he sought greater thrills and a larger operation.
  • One of his first charter customers, Jerry Williams, was a scrap metal entrepreneur with a penchant for gambling in Las Vegas, which introduced Kirkorian to the city.
  • Kirkorian was captivated by the excitement of Las Vegas, which reignited his passion and adrenaline.
  • The charter business was lucrative, catering to gamblers and those seeking quick weddings in Nevada.
  • Kirkorian eventually sold his flight school and planes for a substantial profit, aiming to expand into a larger airline business.

Kirk wanted his own airline, his own fleet of planes, his own company.

This quote encapsulates Kirkorian's ambition to grow beyond a small charter operation into a significant player in the airline industry, reflecting his entrepreneurial spirit and vision.

Surplus Military Plane Market Strategy

  • Kirkorian identified an opportunity in the surplus military plane market post-war.
  • He devised a plan to buy, refurbish, and sell surplus military planes for substantial profits.
  • The process involved purchasing planes in Hawaii, modifying them for extended range, and personally flying them to their destinations, which was both risky and lucrative.
  • Kirkorian's business acumen and willingness to take calculated risks were evident in this venture, which contributed significantly to his wealth by the age of 50.

One way to build capital fast was in surplus military plane market.

This quote explains Kirkorian's strategic approach to capitalizing on the post-war surplus of military aircraft as a means to rapidly increase his wealth and business standing.

Conclusion and Teaser for Full Content Access

  • The transcript concludes with a teaser for the full content, encouraging listeners to upgrade for access to complete episodes.
  • The full episodes delve into the life stories of remarkable individuals whose biographies offer valuable lessons and insights.

Thanks for making it to the end of this preview.

This quote serves as a transition, thanking listeners for their attention and enticing them to subscribe for more in-depth content, suggesting that the stories covered can provide educational benefits to aspiring entrepreneurs and business professionals.

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