The genius path George Lucas took to making billions off of 'Star Wars'

What started off as an unlikely underdog story turned into a phenomenon that changed the world.

While Hollywood expected “Star Wars” to be a huge flop in 1977, it ended up, as we know, one of the most financially successful films of all time, and kicked off a franchise that can’t be killed.

“The Force Awakens,” the seventh film in the “Star Wars” saga, will be released on December 18, 2015. Expectations are incredibly high. No less a Hollywood mythmaker than Steven Spielberg thinks it could be “the biggest movie ever.”

While George Lucas gave up control of the franchise in 2012, he still made a tremendous profit off of it. That is not just because he created the original story. Lucas gained control of licensing and merchandising rights before “A New Hope” was even released. This smart move ultimately turned him into one of the most successful people in the entertainment industry.

This is the path that George Lucas took that turned him into a billionaire.

In 1973, George Lucas had just finished directing the beloved coming-of-age film 'American Graffiti.'

AP Images
George Lucas (right) with his wife at the time Marcia Lucas (left) at the Oscars in 1978

The high school comedy remains one of the most profitable movies of all time. Made on a budget of $777,000, it earned $140 million in revenue.

Harrison Ford was one of the many breakout stars to come out of 'American Graffiti.'

Source: Pajiba

The success of 'Graffiti' gave Lucas some much-needed clout in Hollywood. Producers were excited to hear his next idea. Lucas wanted to direct a sci-fi Western called 'Star Wars.'

20th Century Fox/LucasFilm via YouTube

At the time, nobody took sci-fi movies seriously. The genre had seen too many flops, like the infamous 'Plan 9 from Outer Space.' While many studios turned Lucas down, he found support from Alan Ladd Jr. at 20th Century Fox.

20th Century Fox/LucasFilm via YouTube

Source: The Hollywood Reporter

Early buzz on 'Star Wars' was good. Spielberg thought it would be huge even then.

AP Images
George Lucas with Carrie Fisher and Mark Hamill in 1997

'A New Hope' was released on May 25, 1977. It shattered all expectations with a gross of $775.4 million worldwide. But it wasn't this number that really made George Lucas rich...


Source: Box Office Mojo

Convinced the film would be a flop, Fox let Lucas pass up an additional $500,000 in directing fees in return for keeping licensing and merchandising rights for himself. This was great for Lucas, but terrible for Fox.

Justin Sullivan/Getty Images

Source: The Hollywood Reporter

In 2011, a year in which there was no new 'Star Wars' movie, 'Star Wars' toys brought in more than $3 billion.

AP Images

Source: The Hollywood Reporter

Lucas' standing among 'Star Wars' fans was damaged with the divisive prequels, which he directed. Still, Lucas remained 100 per cent in control of Lucasfilm.

Yoda in 'Star Wars: Episode II - Attack of the Clones'

Source: USA Today

In 2012, Disney bought Lucasfilm for $4.05 billion. It was a match made in heaven. And Lucas was an incredibly rich man. He's now worth $5.3 billion.

Disney / YouTube screencap
George Lucas with Disney CEO Bob Iger

Source: Variety; Forbes

Like Lucasfilm, Disney is masterful at merchandising and licensing.

Getty Images

For example, 'Frozen' made $1.3 billion worldwide. The film's merchandising value was reportedly so strong that it lifted both Disney's earnings and total toy sales.


Source: Fortune

'Some predict that episode 7 - The Force Awakens, will be one of the biggest movies of all time, with record-breaking advance-ticket sales. Action figures of new characters were already flying off the shelves long before the film's release.


While Lucas was given the opportunity to consult, he decided to hand over the reins to J.J. Abrams.

Source: Reuters

Lucas had no involvement in 'The Force Awakens,' but it's safe to say that the film's inevitable success will be in large part because of him.

Kent Phillips/Disney Parks via Getty Images
Disney CEO Bob Iger with George Lucas and Darth Vader

Lucas has yet to see the movie, which he says 'would be like a divorced man going to the wedding of a grown child.'

Getty Images

'My ex will be there, my new wife will be there, but I'm going to have to take a very deep breath and be a good person and sit through it and just enjoy the moment, because it is what it is and it's a conscious decision that I made,' Lucas told Reuters.

Source: Reuters

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