In 1977 while filming Star Wars, George Lucas decided to take a $500,000 pay cut to his salary as director in exchange for full ownership of the franchise’s merchandising rights. By 2012, the first six films produced approximately US$20 billion in merchandising revenue.

Star Wars

This article is about the media franchise as a whole. For the original 1977 film, see Star Wars (film). For other uses, see Star Wars (disambiguation).

Star Wars is an American epic space opera media franchise created by George Lucas, which began with the eponymous 1977 film and quickly became a worldwide pop-culture phenomenon. The franchise has been expanded into various films and other media, including television series, video games, novels, comic books, theme park attractions, and themed areas, comprising an all-encompassing fictional universe.[b] The franchise holds a Guinness World Records title for the “Most successful film merchandising franchise.” In 2020, the Star Wars franchise’s total value was estimated at US$70 billion, an… Continue Reading (29 minute read)

12 thoughts on “In 1977 while filming Star Wars, George Lucas decided to take a $500,000 pay cut to his salary as director in exchange for full ownership of the franchise’s merchandising rights. By 2012, the first six films produced approximately US$20 billion in merchandising revenue.”

  1. mainevent2020

    George Lucas got an enormous fine from the directors guild for not putting credits at the start of the movies. He then left the guild.

  2. EzPzLemon_Greezy

    This why no company will ever make that deal ever again.

  3. farmerarmor

    It’s the reason he kept aiming the movies more and more at children. To sell shitloads of toys.

  4. JesterOne

    Lucas was only making 2.5 cents for every dollar of toys that Kenner was selling in the early days.

    [And we learn of the “dark times,” from 1986 to 1995, when Lucas laid the Star Wars brand to rest and toys stopped selling the way they once did. Hasbro bought Kenner in 1991, closed its Cincinnati office, and somehow, forgot about the Star Wars merchandising deal’s $10,000 stipulation. It failed to pay Lucas his share and the contract expired. Coincidentally (or not, probably), a year later, Lucas announced he would direct a prequel trilogy, sparking a bidding war for merchandising rights among toy companies. Hasbro managed to wrangle the deal back, but only at a base royalty rate of 18 percent for Lucas. (The deal was dubbed “George’s revenge.”)](https://www.thedailybeast.com/how-star-wars-revolutionized-the-toy-industry)

  5. OttoManSatire

    I think Lucas was the first Hollywood man to understand merchandising. Everyone laughed at this decision.

  6. Windigo4

    That’s revenue rather than profit. There is a cost to produce the merchandise. Also he had to pay toy companies a cut to design, distribute and market the merchandise. He is only worth $5.6 billion. Which is $5.6 billion more than I have.

  7. CodeVirus

    I remember living in eastern europe in the 80s when a friend of mine had a little Luke Skywalker action figure of dubious quality. I am sure George Lucas didn’t get a single cent from that merch.

  8. casenich

    $500k pay cut in 1977? This guy was rich long before the toys

  9. Grahfzer0

    I wonder if the bet with Steven Spielberg gives him money just from the movies or also from the merchandising.

    When Spielberg was making Close Encounters Of The Third Kind, Lucas saw it and immediately thought that Star Wars was going to be a failure. So Spielberg made a bet with him: Spielberg would get 2.5% of whatever Lucas made with star wars, and Lucas would get 2.5% of whatever Spielberg made with Close Encounters.

    As of 2014, Spielberg has made about $40 million off of that bet.

  10. joshi38

    Here’s the thing about merchandising, it’s where the real money is in movies, at least for the type of films that pair well with merchandising.

    Merchandising is basically just a license to print money for the studio. You make a film that people love enough to want to buy toys of it, and then you simply licence out the brand to various toy and lunchbox makers so that they make the stuff and sell it… and the crazy party is, they pay *you* for the privilege. You make billions selling said rights to dozens/hundreds of different manufacturers all over the world and *they’re* the ones putting in all of the effort of actually making and selling the stuff.

    And back in ’77, merchandising wasn’t nearly as big of a thing, so the studio was more than happy to give him the rights if it meant paying him less. Hindsight’s 20/20, but it’s rare if not unheard of for a studio to ever do that again. It’s just too much money. At a certain point, those popcorn films are little more than overlong adverts for the merch.

    Remember that the next time an Avengers film makes a billion dollars. What you just watched was a 2.5 hour toy commercial… and you paid to see it.

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