Donald MacInnes: George Lucas' canny call on Star Wars was out of this world

In the Red

If a trophy existed to honour the canniest business decision ever made, one of the favourites would be a deal that saw the protagonist become one of the richest operators in his industry, while remaining one of its least understood.

Until 1977, 20th Century Fox's largest-ever annual profit had been $37m (£23m). In the tax year 1977-78, the studio's profits rocketed to $79m. The reason boiled down to just two words: Star Wars.

The film was the pet project of director George Lucas and, such was its (at the time) deeply unfashionable subject matter, it would simply not have been made had it not been for the fact that Lucas had just directed American Graffiti.

A nostalgia piece set in the 1950s, with a budget of some $750,000, it has to date made more than $250m. Lucas received $150,000 to direct that film and, as it was such a hit, was offered $500,000 for his next project, the aforementioned space adventure.

But he turned down the deal, saying instead he would again work for $150,000, as long as he could retain all of the merchandising rights and get first refusal on any sequels.

As Fox believed the film was probably going to bomb quite hard – thereby not generating any sequels (never mind joyless prequels) – it agreed to that part of the deal.

It had also lost money 10 years before when it speculated on the merchandising potential of Doctor Dolittle, so was happy to let Lucas have 100 per cent of the six lunch boxes and four T-shirts it expected the film to spawn. The suits were probably sniggering as Lucas left their boardroom.

Of course, the film became a mountainous smash – and not only were the sequel rights worth a fortune, the merchandising deal became a licence to both print money and then spend it on swimming pools full of ginger beer and elaborate cars with big radios.

It's hard to say exactly how much Lucas made from his gutsy deal, but in the year following its release, $100m worth of Star Wars toys were sold. Up to 2012, when Lucas sold all Star Wars rights to Disney for $4bn, that merchandising pot had grown to a galactic $12bn, with Star Wars products generating $3bn a year. And Lucas got it all, having taken a risk on a film no one believed in nearly 40 years ago. Now that is a sweet deal.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Retirement Coordinator - Financial Services

    Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

    Recruitment Genius: Annuities / Pensions Administrator

    Negotiable: Recruitment Genius: You will be the first point of contact for all...

    Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

    £18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

    Ashdown Group: Learning and Development Programme Manager

    £35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

    Day In a Page

    The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

    The saffron censorship that governs India

    Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
    Prince Charles' 'black spider' letters to be published 'within weeks'

    Prince Charles' 'black spider' letters to be published 'within weeks'

    Supreme Court rules Dominic Grieve's ministerial veto was invalid
    Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

    How did fandom get so dark?

    Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
    The galaxy collisions that shed light on unseen parallel Universe

    The cosmic collisions that have shed light on unseen parallel Universe

    Dark matter study gives scientists insight into mystery of space
    The Swedes are adding a gender-neutral pronoun to their dictionary

    Swedes introduce gender-neutral pronoun

    Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
    Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

    Disney's mega money-making formula

    'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
    Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

    Lobster has gone mainstream

    Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
    Easter 2015: 14 best decorations

    14 best Easter decorations

    Get into the Easter spirit with our pick of accessories, ornaments and tableware
    Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

    Paul Scholes column

    Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
    Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

    The future of GM

    The greenhouses where Monsanto 'plays God' with the future of the planet
    Britain's mild winters could be numbered: why global warming is leaving UK chillier

    Britain's mild winters could be numbered

    Gulf Stream is slowing down faster than ever, scientists say
    Government gives £250,000 to Independent appeal

    Government gives £250,000 to Independent appeal

    Donation brings total raised by Homeless Veterans campaign to at least £1.25m
    Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

    The most borrowed book at Bank of England library? Oh dear

    The book's fifth edition is used for Edexcel exams
    Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

    Cowslips vs honeysuckle

    It's the hunt for UK’s favourite wildflower
    Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

    Did a botched blackmail attempt help Cyril Smith escape justice?

    A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss