Sunday Mirror 9th May 1999
Top dollars
The movie
will earn more in ticket sales and merchandising than any film ever made...and George
Lucas himself will make £400 million.
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Since it's release in 1997, the movies Titanic
has sat proudly at the top of the box office charts. That is all about to
change. The Phantom Menace, an explosive combination of proven
monster crowd-puller, multi-million pound merchandising bonanza and lucrative tie-ins with
consumer giants such as Pepsi, will move into uncharted financial territory; and the
biggest chunk of the £3 billion bonanza will go to writer-producer-director George
Lucas, who used his
own funds to put together the ultimate independent movie.
Lucas did it all without interference from a single studio executive; he wasn't forced to
explain his escalating budget to worried Hollywood bosses; nor was he required to sign up
big money stars as a sop to paranoid shareholders. |
20th century Fox
will receive an eight per cent distribution fee to release the film and will handle some
marketing costs, but that is as far as the outside involvement goes. Everything else is
masterminded by Lucasfilm Ltd, the umbrella company for the director's multi-faceted
business empire. Even modest estimates suggest the new film will generate more than £600
million in global ticket sales (Titanic took £540 million) to add to the £1.1 billion
worldwide gross of the original trilogy. In addition it is expected to earn more than
£2.4 billion in merchandising, and that doesn't even include the toys Lego will make or
computer games from Nintendo, Sony, Sega and Lucas's own company, LucasArts. It also
doesn't include the money retailers will rake in from sales and rentals of costumes, wigs,
weapons and accessories linked to he film's new characters. In all, Lucas can expect to
make a personal fortune of £400 million for the film.
Lucasfilm is a
private company and doesn't reveal revenue or expenses, profit or loss, but it is no
secret that much of the film's budget was spent on the very latest digital special
effects. Lucas says the new technology is so advanced it makes his earlier films seem like
silent movies. "It's like sketching with a pencil and suddenly someone gives you
paint, so now I can paint the way I was originally seeing things, and I like that,"
he says."It's a 95 per cent digital movie, which means it's got digital characters or
digital sets or something going on in it, where most movies have about five to ten minutes
of digital at most,"
Lucas himself has
actually made only four films in a career spanning nearly 30 years; a 1971 sci-fi think
piece called THX 1138, 1973's coming-of-age hit American
Graffiti, 1977's Star Wars and now The
Phantom Menace. The other Star Wars adventures, Return Of the
Jedi and The Empire Strikes Back, were the work of
other directors under contract to Lucas. |
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However, David
Davis, senior vice president in Los Angeles office of investment bank Houlihan, Lokey,
Howard and Zukin, points out: "George Lucas is up there with Steven Spielberg at the
top of the pile. Everything they touch turns to gold. Number one, they stay out of
Hollywood. Number two, they stay out of businesses they don't understand. And Lucas
doesn't play all the time. He's like a player in Las Vegas who swoops in and takes huge
profits, then leaves."
Lucas founded his
company in Marin County, California, in 1971, and although he is best known as a director
and a screenwriter, he has made much of his fortune as a producer and merchandiser,
shepherding to market the Star Wars and Indiana Jones movies, games and toys.
 |
Last summer
America's influential business bible Forbes magazine placed Lucas on its annual list of
The World's 100 Working Rich, estimating his worth at £1.2 billion.
Lucas is unique
among film-makers in that he finances his own movies, and holds on to both profits and
ancillary sales. He cut a £600 million deal for rights to The Phantom Menace
and struck a £1.2 billion promotion deal with Pepsico, the food giant that owns Pepsi
Cola, Pizza Hut and Taco Bell. One of the biggest money-making cogs of his empire is his
Oscar-winning special effects division, Industrial Light and Magic, or ILM,
Internationally respected as a leading technological innovator, ILM does both
computer-based effects for Lucas's films and extensive contract work for Hollywood
studios.
In 1998 alone, the
division worked on Saving Private Ryan, Deep Impact
and Small Soldiers; and with 1,100 employees, it is easily the
largest area in Lucasfilm, which has a total workforce of 1,800. |
For The
Phantom Menace, ILM has created an immensely costly climactic battle scene
in which 3,000 computer-generated alien infantrymen take on 4,000 battle driods. But
merchandising is still by far the biggest money spinner. "Star Wars merchandise
related to the first trilogy has already generated more than £2.7 billion in sales, which
is four times as much as the movies," says Sean McGowan, a toy analyst at New
York-based Gerald Klauer Mattison and Co. He adds: "The revenues from products tied
to the first of the prequels will exceed any first-year movie revenues on merchandise in
the history of Hollywood." |