Steven Spielberg Made Millions Off Star Wars Thanks to a 1977 Bet With George Lucas

Business Insider
Analyzing the top news stories across the web
March 26 2014 12:16 PM

The Bet That Made Steven Spielberg Millions Off of Star Wars

160791689-steven-spielberg-and-george-lucas-attend-the-dedication
"Are you regretting that bet yet, George?"

Photo by Valerie Macon/Getty Images

This post originally appeared in Business Insider.

A long time ago on a film set far, far away, two directors made a friendly bet about a small space-fantasy film called Star Wars.

Steven Spielberg would go on to win the bet and take millions of dollars from George Lucas over time. Here’s how the out-of-this-world wager came to be.

Advertisement

The Troubles of The Star Wars

In the mid-1970s, science-fiction films weren’t very popular.

1968’s 2001: A Space Odyssey led the way for the genre but made just $56 million at the box office. So when a young director named George Lucas was trying to sell a script called The Star Wars, based on Flash Gordon space serials, not many studios were eager to make it.

It wasn’t until Lucas took his script to 20th Century Fox that the film finally received backing—but even then it was more because of the success of Lucas’ previous film, American Graffiti.

The challenges didn’t stop there. A delayed, over-budget production caused the troubled director to visit a friend shooting his own sci-fi film in Mobile, Ala.

That friend was Steven Spielberg and the film was his 1977 classic, Close Encounters of the Third Kind.

The Bet

According to an interview with Spielberg for Turner Classics Movies, Lucas came to the set of Close Encounters out of sorts after problems with his passion project. Needing to recharge, Lucas spent a couple of days on set.

“George came back from Star Wars a nervous wreck,” Spielberg said. “He didn’t feel Star Wars came up to the vision he initially had. He felt he had just made this little kids’ movie.”

After a few days, Lucas realized something else: Spielberg’s Close Encounters was going to be so much more successful than Star Wars. So much more that he felt like making a bet with Spielberg.

Spielberg would later say: 

He said, “Oh my God, your movie is going to be so much more successful than Star Wars! This is gonna be the biggest hit of all time. I can’t believe this set. I can’t believe what you’re getting, and oh my goodness.” He said, “All right, I’ll tell you what. I’ll trade some points with you. You want to trade some points? I’ll give you 2.5 percent of Star Wars if you give me 2.5 percent of Close Encounters.” So I said, “Sure, I’ll gamble with that. Great.” 

Close Encounters would indeed be a hit, making $303 million at the box office. However, Star Wars would go on to become one of the biggest box-office hits of all time.

A Financial Empire

Spielberg’s gamble paid off. Big time.

Released May 25, 1977, on a budget of $11 million, Star Wars—later retitled Star Wars, Episode IV: A New Hope—went on to make $460 million in the U.S. alone.

Adjusted for inflation, the film has made $1.48 billion at the box office, making it the second-biggest box-office hit of all time—only behind Gone With The Wind. By our calculations, this means Spielberg’s 2.5 percent could have made him nearly $40 million.

Close Encounters was just a meager success story. Star Wars was a phenomenon," Spielberg said a few years ago. “Of course I was the happy beneficiary of a couple of net points from that movie, which I am still seeing money on today.”

Sequels The Empire Strikes Back and Return of the Jedi would also go on to be great successes leading to prequels, rereleases, and merchandising, making the Star Wars franchise one of the biggest in Hollywood, reportedly worth $30 billion and growing.

Frank Pallotta is an entertainment reporter for Business Insider.

TODAY IN SLATE

The World

The Budget Disaster that Sabotaged the WHO’s Response to Ebola

How Movies Like Contagion and Outbreak Distort Our Response to Real Epidemics

PowerPoint Is the Worst, and Now It’s the Latest Way to Hack Into Your Computer

Everything You Should Know About Today’s Eclipse

An Unscientific Ranking of Really, Really Old German Beers

Education

Welcome to 13th Grade!

Some high schools are offering a fifth year. That’s a great idea.

Culturebox

The Actual World

“Mount Thoreau” and the naming of things in the wilderness.

Want Kids to Delay Sex? Let Planned Parenthood Teach Them Sex Ed.

Can Democratic Sen. Mary Landrieu Pull Off One More Louisiana Miracle?

  News & Politics
Politics
Oct. 22 2014 9:42 PM Landslide Landrieu Can the Louisiana Democrat use the powers of incumbency to save herself one more time?
  Business
Moneybox
Oct. 23 2014 11:51 AM It Seems No One Is Rich or Happy: I Looked.
  Life
Lexicon Valley
Oct. 23 2014 10:30 AM Which Came First, the Word Chicken or the Word Egg?
  Double X
The XX Factor
Oct. 23 2014 11:33 AM Watch Little Princesses Curse for the Feminist Cause
  Slate Plus
Working
Oct. 23 2014 11:28 AM Slate’s Working Podcast: Episode 2 Transcript Read what David Plotz asked Dr. Meri Kolbrener about her workday.
  Arts
Brow Beat
Oct. 23 2014 11:34 AM Louis C.K. Crashes a Brad Pitt Interview on Between Two Ferns
  Technology
Technology
Oct. 23 2014 11:45 AM The United States of Reddit  How social media is redrawing our borders. 
  Health & Science
Bad Astronomy
Oct. 23 2014 7:30 AM Our Solar System and Galaxy … Seen by an Astronaut
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.