Photo: Elvis signing his performance contract with the International Hotel
There were no tycoons in Kirk Kerkorian’s family tree. His immigrant father, an illiterate farmer and fruit peddler, was in constant financial trouble. Kirk learned English and how to brawl growing up in Los Angeles. 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.
Kirk entered the packed International dinner theater on July 2, 1969 without an entourage and sat down at a table that didn’t draw attention to himself. It was the opening night of his $60 million International Hotel in Las Vegas, the world’s biggest hotel and casino. Critics said it would be a disaster since the hotel was located off the strip next to the convention center. Kerkorian saw it differently and made it happen.
Howard Hughes who had vouched to stop the hotel’s construction sat alone in his Penthouse across the street with the shades drawn. Hughes, who bought six casinos over a yearlong buying spree to shield his tax liability viewed Kerkorian as an adversary. Hughes would confide to his attorney, “He’s the only guy I can’t buy.”
Kirk had his friend and legendary actor Cary Grant do the opening ceremony and he hired Barbara Streisand to officially open the hotel with her song, “I Got Plenty of Nothin.” She also contracted to do two shows per night, seven nights per week, for four weeks for an unprecedented $100,000 per week. Her show went on to set Vegas showroom attendance records. Kirk chose Streisand over Elvis to lead off. Elvis would perform for two weeks following Streisand. The hotel opening and first month was a huge success. Kerkorian’s public holding company for the hotel, International Leisure Corp, rocketed from $5 per share to $100 per share.
Elvis had just got done being an actor and shooting movies over the last ten years. His manager, Colonel Tom Parker, didn’t know if Elvis could go the distance. Two shows per day, for two weeks, was an excruciating schedule.
Kirk thought Streisand would be bigger than Elvis. Elvis blew the lid off of expectations. People would show up at the box office two hours before it opened to buy tickets for Elvis.
“We made a mistake. Streisand didn’t do quite as well as we thought. And Elvis tore the place apart.”
After seeing the first night numbers, Kirk’s right hand man, Alex Shoofey, immediately sat Colonel Parker down to tell him they wanted to extend Elvis’s contract.
Parker cautioned, “It’s too early. Let’s find out whether he can make it or not. There’s no telling if Elvis is going to collapse.”
Shoofey didn’t want to waste time and was willing to gamble.
Parker asked what the offer was.
Shoofey said, “Five more years. Twice a year. A month each year. $500,000 per engagement. $5,000,000.” And he threw in $100,000 bonus to sign immediately.
Parker was dumbfounded. He could tell Shoofey was serious, so he cleared the table and asked him to repeat the offer as he wrote it down on the tablecloth.
When he was finished he rolled up the tablecloth, stood up, and said, “You’ve got a deal.”
The deal would clinch Las Vegas as the Elvis performance capital of the world.
This story was taken from the book: The Gambler: How Penniless Dropout Kirk Kerkorian Became The Greatest Deal Maker in Capitalist History
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