How Did George Lucas Make His Money

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This commodity is written by Mahvish Siddiqui pursuing Diploma in Intellectual Property, Media, and Entertainment Laws from LawSikho .

Introduction

George Lucas or George Walton Lucas, Jr. is the famous film director, producer, screenwriter, and founder of Lucasfilm.

He is best known for creating the Star Wars and Indiana Jones Franchise and he is the richest celebrity with his net worth being $vii.4Billion (March 2021). He made his debut in 1971'due south THX 1138, a futuristic movie where android robots controlled social club with drugs to suppress the emotions of humans. In 1973 his American Graffiti was a monster hit earning $200 meg.

The best idea Lucas ever had was described as a "western gear up in space" and it was called "The Star Wars", this happened in 1971 and the next ii years he worked on the script and after his success with American Graffiti he straightaway reached out to make a deal with Play a joke on studios merely what was different here was that he offered to keep his salary at $150,000 in exchange for two seemingly insignificant requests:

That he retains all merchandising rights, and
That he would retain rights to whatsoever sequels.

Nosotros all know what happened after that with Star Wars being a humongous hit when it was released in 1977 information technology became the highest-grossing movie in history.

The Star Wars picture, The Force Awakens smashed box office records all over the globe when it was released. George Lucas made sure to aggressively protect this largest pop culture phenomenon in the world. It is evident that he made a fortune out of the Star Wars empire through LucasFilm.

Permit's get an insight on how exactly he made a fortune out of Star Wars.

Making dollars out of the intellectual property

Since the release in 1977, LucasFilms has filed approximately 205 patents, 1077 individual trademark applications, and 3489 registered copyrights . He has been very persistent in protecting the intellectual belongings rights of the movies.

Patent and trademark

A patent is a right or title one confers from a government authorization for a menses and so that they exist the sole owner of that invention whereas a trademark tin exist registered for specific goods and services to be able to distinguish themselves from the others. What Lucas did was that he took patent rights trademarks on all its characters and inventions whether the inventions were from an employee of the company or not he assigned all the patent rights to himself and Lucasfilms. Many of the toy patents were filed by Lucasfilm for their inventors – people like Joe Johnston, Ralph McQuarrie, Nilo Rodis-Jamero, Ralph McQuarrie, and such. Kenner does have its share of patents also. Some examples of the patented characters and toys are Boba Fett, Hoth Stormtrooper, X- Wing Fighter, AT-AT, MLC3, Jabba the Hutt, R2 D2, C-3PO, Luke Skywalker, and many more. The BB8 droid was the best seller on Amazon. Information technology was a brawl shaped droid that could rotate from its caput and could be operated from a tablet or a smartphone. The droid was non an original creation of an employee of the visitor, and then the patent rights were assigned to the company. Star Wars registered for an enormous range of products which even included DVDs, software, etc. They trademarked the film's titles and slogans which cannot be protected from copyright simply can exist trademarked and the example "May the Force be with y'all" and the film championship The Force Awakens or Revenge of the Sith is one of the many trademarked titles/slogans.

In 2012 Disney who caused Lucasfilms filed a patent for a real-life lightsaber feel at Disney'southward Star Wars Park where the audience could fight off with a virtual lightsaber like in actual combat and it would include haptic feedback and the lightsaber hum so that the audience gets the feeling of an actual lightsaber and the Jedi experience.

Even the word "Droid" is trademark protected past Lucas and Lucasfilms so if whatsoever visitor wishes to use the term in shows or films must pay LucasFilms to use the word or confront legal deportment.

All of this brought millions of dollars to Lucasfilms and even Lucas himself .

Copyright

The copyright ranges from artistic expressions, including scripts, movie posters, audio recordings for example Star state of war books, e-books, screenplays, soundtracks, and films and telly programmes. The artistic work would include logos, graphics, photographs, images of fictional characters which play groovy importance in this franchise for case Yoda, R2 D2, and many more. Such fictional characters can then be reproduced on a mug or lunchbox, or habiliment and that hit a fortune for George Lucas as the markets were flooded with the products.

These copyrighted products helped Lucas in a lot of infringement cases, and he made a slap-up deal out of it too. In 2016 they sued a so-called "New York Jedi and Lightsaber Academy" because they were offering classes for Jedi combat by expert lightsaber and swordplay practitioners. They claimed that the school'southward employ of the words "Jedi" and "lightsaber" and the "Jedi Guild" logo all constitute an infringement of Lucasfilm's trademark rights.

Merchandising and granting licensing of intellectual property rights

Merchandising is a very strong way to earn a lot of money and it tin can be incredibly lucrative for business. Merchandising refers to a wide range of activities that increase the visibility and accessibility of products, including window displays and shop flooring layouts. George Lucas had taken all the merchandising rights earlier and that was his all-time decision as this made all the existent money. We know product licensing involves two parties: a licensor and a licensee. The licensor owns the rights to intellectual property (IP) while the licensee manufactures products using the IP granted past the licensor (LucasFilms) via a license agreement. A product (or merchandise) license allows licensees to leverage popular IP to create branded products, usually for a specific period.

Once the rights have been secured, the licensee manufactures a product using the licensed IP, and in return pays the licensor a royalty for its utilize. This can be a flat fee or a percentage of the sales of the products that incorporated the IP. This model can be applied to virtually any production, from apparel and accessories to toys, dwelling house goods, and more.

The production licensing model helps both parties to gain relevancy, recall, and revenue.

In 1977, Lucas granted Kenner the exclusive rights to produce Star Wars toys in perpetuity for $100,000 per twelvemonth. Back then, of course, no one realized how valuable that correct was, and for years Kenner made millions of dollars selling little plastic Princess Leias and R2-D2s. Hasbro Inc. had taken over Kenner in 1991 and the Star Wars merchandise had come to a halt. Galoob Toys Inc. saw the opportunity and pushed out its Star Wars Merchandise. In 1996, Galoob sold about $120 1000000 worth of small-scale Star Wars toys. This made Hasbro push sales and made $200 million that year.

It was believed that Lucas never would accept rereleased those movies if Galoob hadn't shown him that Star Wars was even so popular past successfully promoting those toys.

In 1997, the biggest licensing deal e'er happened between Lucasfilm Ltd, Hasbro Inc., and Galoob Toys. The companies separately reached agreements with LucasFilms for the next three Star Wars movies.

The combined deal was worth $225 1000000 with additional royalties.

Galoob has granted the Lucas companies warrants for nearly xx% of the company'due south issued and outstanding common stock, equal to approximately 3.6 million shares, at an practise price of $15 per share. The $140 million advances will exist payable as the 3 new films are released.

Hasbro offered a guarantee of about $300 one thousand thousand; stock options and royalties shut to 20% of sales for nine years .

Star Wars sold $100 one thousand thousand worth of toys. 35 years afterward and Star Wars themed toys have generated $12 billion in revenue. After the first picture, George owned 100% of the rights to the entire franchise. The next 5 Star Wars movies would proceed to earn an additional $three.5 billion at the box part. In full, the Star Wars empire has sold $4 billion worth of DVDs and VHS, $3 billion worth of video games, $2 billion worth of books. George Lucas had earned himself an impressive $3.3 billion net worth by 2012. Then, Disney came knocking.

Lucas granted his picture distributing rights to 20 thursday Century Play a joke on in 1999 for his iii Star Wars films.

Fans will ever remember the famous drumroll of 20 th Century Play a trick on and fanfare at the beginning of the Star Wars film but then in 2012 Disney took over LucasFilms and paid more than $4 billion and likewise replaced the opening sequence in all of the films except for the original 1977 pic because Pull a fast one on still owns the rights of that motion-picture show.

Even though Lucas is not the owner of Lucasfilm now, he all the same makes a lot of coin from the commencement movie which is considered every bit the father of the Star Wars saga. Lucas does not earn whatever royalties from the newer movies or shows as a writer, director, or fifty-fifty creator. However, because of the Disney stock shares he received as part of the transaction, Lucas still sees a hefty payout due to the value of the stocks.

Around the fourth dimension of the conquering of Lucasfilm, each of Disney's shares was worth about $50. Lucas acquired 37,076,679 shares from Disney, valued at $one.85 billion at the fourth dimension.

By now, Disney'south stock value is sitting at $200 per share, pregnant that Lucas's stocks are now worth over $seven billion.

Decision

The intellectual upper-case letter business or franchise constitutes a significant component of its total avails, the value that the intellectual property can exceed the value of fixed avails or working capital of the business organisation. It has been recognized that the intellectual upper-case letter of a business provides the most stiff – and most effective – impetus to its earning power. So vigorous and jealous guarding of IP rights is much like protecting your supplies and money from the raiding and pillaging Alkhara Bandits .

George Lucas fabricated a fortune out of the Star Wars empire though his resume is very thin he still managed to brand the right decisions at the right time and that has made all the difference now.

Without retaining these rights, Lucas would accept done very well, merely his earnings would take been a tiny fraction of what they became. This windfall would not accept been remotely possible if it wasn't for that single brilliant decision made dorsum in 1973. George Lucas essentially traded $350,000 for more than than $5 billion. That might be the smartest concern determination of all time! So the lesson hither is, if yous believe in your idea, don't give up your rights easily!

While George Lucas gave upwardly control of the franchise in 2012, he still fabricated a tremendous profit off of information technology. That is non just because he created the original story. Lucas gained control of licensing and merchandising rights before "A New Hope" was even released. This smart motion ultimately turned him into i of the virtually successful people in the entertainment industry.

References

https://www.celebritynetworth.com/manufactures/entertainment-articles/how-one-genius-decision-fabricated-george-lucas-a-billionaire/

https://www.latimes.com/archives/la-xpm-1998-apr-03-fi-35475-story.html#:~:text=In%20a%20deal%20expected%20to,on%20video%20beginning%20in%201999 .

https://www.fieldfisher.com/en/insights/star-wars-may-the-ip-exist-with-y'all

https://www.golegal.co.za/ip-strength-star-wars/

https://www.hollywoodreporter.com/news/george-lucas-star-wars-288513

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