Behind many a classic Hollywood film franchise is a story of someone who gambled and won, and someone else who lost.  The most extreme example of that is Star Wars.  Depending on which side of the table you were on 40 years ago, the negotiations on those original pictures resulted in the greatest, or worst, deal in Hollywood history as George Lucas ended up with both the sequel and later the merchandising rights.  Disney’s Bob Iger would not have been able to purchase Lucasfilm for $4 billion if not for that deal, and who knows if the JJ Abrams franchise relaunch Star Wars: The Force Awakens would have ever happened.  Lucas certainly would not have become one of the richest directors in history from his films, had things gone down differently. 

Tom Pollock, the former Universal Pictures chairman who currently partners with Ivan Reitman in Montecito, was Lucas’ attorney at the time history was made.  Lucas was a wunderkind USC grad who was just getting started with an ambitious plan for a space serial nobody really seemed to want.  Pollock has graciously agreed to take Deadline readers on a journey of how it all happened, and how Lucas, Pollock and agent Jeff Berg pulled off the deal of the century that gave Lucas full control over the Star Wars empire. 

DEADLINE: How in the world did George Lucas wind up in control of his space franchise, when he needed studio funding to make the first film? 

POLLOCK: In 1971, I became George’s attorney.  He was just doing THX 1138 with Francis Coppola at Warner Bros, which was an extension of the short he did at USC.  The first deal we did was a two-picture deal at United Artists Corporation for George to write a script called American Graffiti, and for an untitled science fiction movie, in nine parts.  Swear to God.  This was what was in the contract.  I know this because when Skywalker Ranch was built, George had a time capsule buried.  One of the things I put in there was that contract, along with the articles of incorporation of Lucasfilm. 

DEADLINE: How long does that time capsule stay buried? 

POLLOCK: I don’t know, I think it was 75 years.  George kept the ranch under the Disney deal, he sold everything else.  For all I know, they dug it up. 

DEADLINE: A nine-part epic adventure.  Was there a treatment that sketched out exactly what he was thinking? 

POLLOCK: Not at that moment, but I’ll get there, I’ll get there.  Willard Huyck and Gloria Katz wrote the script for American Graffiti with George, and when they turned it in, David Picker passed on it, and passed on the second film as well.  Leading to one of his very famous aphorisms: “If I made all the movies I passed on and passed on all the movies I made, I’d probably have ended up in the same place.”  So the Huyck/Katz script went to Universal.  It went all around.  We almost got a deal at AIP, but it finally got made at Universal, through Francis’ help.  The film was finished and shown to the studio, and Ned Tanen didn’t like it at that particular time.  By then, George had written the treatment for Star Wars.  Universal had an option for George’s next movie, it was submitted to Universal and they passed on it.  They had the option on his next picture because they had made American Graffiti. 

DEADLINE: Did they pass before American Graffiti became a monster hit? 

POLLOCK: Yes.  They passed before American Graffiti came out.  Jeff Berg, who was George’s agent, took the treatment to Alan Ladd Jr at Fox and Laddie said yes, I’ll make this, and they negotiated the outline of the deal.  George got $50,000 to write, another $50,000 to produce, and $50,000 to direct.  There were no contracts yet, but that was the deal.  So American Graffiti came out and it was a huge hit.  It was made for $750,000 and made over $100 million.  Jeff says, “George, I can get you a lot more than $150,000.  We can get $500,000, maybe a million.”  George said, “Look, I’m going to have a lot of money now from American Graffiti.  What I really want from the deal we’re making at Fox is, I see this movie in multi-parts.”  George and I have had a disagreement over whether it was six or nine parts, but this is the way that he always saw it.  It was always envisioned as this serial.  What he said was–and you have to remember that George has an innate suspicion of Hollywood studios–“the worst thing that can happen to me is that I couldn’t make the sequel, or I couldn’t do the rest of the series if the first one worked.  So you have to make sure that I have the ability to do that.”  That part fell on me.  So instead of taking more money or other things, he used the success of Graffiti for that.  I want to emphasize that none of this was because he knew that Star Wars was going to be so successful.  It was all about, “I don’t want to not have the ability to make the movies I want to make,” and have it get lost in what today is called development hell. 

So in the negotiations that were going on, we drew up a contract with Fox’s head of business affairs Bill Immerman, and me.  We came to an agreement that George would retain the sequel rights.  Not all the rest of the stuff that came later, mind you; just the sequel rights.  And Fox would get a first opportunity and last refusal right to make the movie.  Bill Immerman and Laddie are both still around, and to this day, Bill says Laddie approved this, and Laddie says Bill did this on his own.  Obviously, it’s one of those deals where it’s not just about the $4 billion that came later from Disney, but all the money that was made in between that can be traced back to this decision.  It’s important to remember that none of the original deal came out of money as those who know something about it might think.  It came because George just wanted to be able to make the movies he wanted to make. 

So we closed the deal, and Star Wars got made and it’s a humungous hit; the biggest movie of all time, at the time.  When we made the sequel deal, the deal we came up with and proposed to Laddie and maybe it was Dennis Stanfill or Marvin Davis at that point.  In that deal for The Empire Strikes Back, George made the decision to self-finance the film.  Lucasfilm made a lot of money on Star Wars and would reinvest the money in the movie.  The deal that was offered to Fox was, you get distribution rights theatrically and video around the world for seven years, and we retain everything else.  And, by the way, we want the merchandising back.  Fox had started with the merchandising in that first year, or two, and did very well too.  He wanted the merchandising back as of the time Empire came out.  That meant soundtrack albums, music publishing, television, all rights other than the rights we were granting to Fox under this deal.  We tried to get the first deal back so he would own Star Wars, but Fox refused to sell it and rightfully so and they have it to this day. 

DEADLINE: Why did Fox grant you those merchandising rights? 

POLLOCK: They wanted the sequel. 

DEADLINE: If they hadn’t said yes? 

POLLOCK: We would have taken the sequel someplace else.  We were not obliged to sell it to them.  They said yes, they wanted to make sure the movie came.  Even then, while the merchandising was doing well, it hadn’t become the phenomenon it would become.  We agreed to do it that way on the next one.  In fact, we had the same relationship on the next one and the three prequels, they were made at basically the same terms.  They had certain rights for a certain time and got a distribution fee, and George put up all the money.  And owned it. 

DEADLINE: Back when that first deal was forming, and George ended up with $150,000 for the first film, did you think they would say yes to giving George ownership? 

POLLOCK: Who knew?  The point was, at that point I was a lawyer, doing what my client wanted.  And what my client wanted wasn’t the money, it was the ability to get the movie made.  I didn’t know it, but at some point when he was doing the first Star Wars, he had worked out the basic plot of episode V and VI.  You know, Darth Vader…Vader means father, in German.  It means Dark Father. 

DEADLINE: I didn’t know that…

POLLOCK: Well, I’m a geek on this stuff, in Star Wars lore…

DEADLINE: This is a compelling episode in Star Wars lore.  They should have named a Jedi knight after you.  This has to be the greatest movie deal of all time…

POLLOCK: I don’t know if it’s the greatest deal of all time.  I do think it’s the greatest franchise, though the James Bond people have argued that.  The Bond movies, remember, Harry Saltzman and Cubby Broccoli didn’t own the sequels.  They co-owned the sequels with United Artists.  Which means one can’t proceed without another.  That’s what Fox offered, and George said no to that, on the grounds he needed to know he would be able to make these movies.  That was what was important.  He didn’t want to be blocked.  So, no, I didn’t know if they would say yes [when I asked].  Who the hell knew anything? 

Sometime between Star Wars and Empire, we went out with this next serialized movie George was going to do with Steven [Spielberg] called Raiders Of The Lost Ark. We had a bidding situation going on with Warners and Paramount.  Neither, in light of what had happened with Star Wars, was willing to give the sequel rights back to George.  We tried really hard but didn’t get it.  That part ended up being frozen, as in the United Artists-Bond re-up. 

Nobody was willing to do it after that, and probably nobody ever will do it again.  Those are the things that come back to haunt you. 

DEADLINE: Fill in one other blind spot.  I did an interview with Billy Friedkin who said he, Francis Coppola and Peter Bogdanovich could have bought Star Wars, but while Francis saw it, neither Billy nor Peter did.  Then Friedkin made Sorcerer and it got crushed by Star Wars…

POLLOCK: The ironic thing about that was, yes, Jeff Berg as the agent, took it to a lot of places, and didn’t go right to Laddie.  The Directors Company you are talking about, with Coppola, Bogdanovich and Friedkin, it may have been taken there and they passed.  But I know it was taken to other places but it was Alan Ladd who stepped up.  But it wasn’t a fully developed movie and remember it was before American Graffiti came out and nobody other than Universal had seen it.  I don’t know the thought process of the people who had seen it.  I know Universal passed on it, because they had the legal right to do it, they were not happy at that moment with American Graffiti.  Francis tried to buy that movie back for George from Universal.  It never happened, but the offer was made. 

DEADLINE: What I was going to ask was, you knew what Star Wars was in the treatment stage.  We all know that Warner Bros put Home Alone in turnaround, and there are any number of big movies that people passed on. 

POLLOCK: I’ve had a few of my own. 

DEADLINE: These are hard calls to make when you are looking at a treatment or even a script.  Were you surprised that people didn’t instantly embrace the potential of George’s vision at that moment? 

POLLOCK: Absolutely.  But the only science fiction of import then–and it didn’t make any money–was 2001: A Space Odyssey.  What George was trying to do was something more akin to Flash Gordon and Buck Rogers, a cliffhanger serialization space opera.  Nobody had ever made a movie like that, at that time.  So of course I believed in it, but who knew?  I don’t think George knew, and I don’t think Laddie knew.  I think everybody was betting on the fact that George was and is an incredibly talented filmmaker.  It’s the movie business.  Who knows? 

DEADLINE: When you segued from attorney and ran Universal, did you find yourself on the wrong side of such a decision that left you feeling, damn, wish I had that one back? 

POLLOCK: I never had one like that I put in turnaround because I didn’t like it.  But, I had the opportunity to make Pulp Fiction, and didn’t.  And that is a really wonderful movie.  I’d done a movie with the producers Stacey Sher and Michael Shamberg called Reality Bites, which had been put in turnaround by TriStar.  Pulp Fiction had also been at TriStar and Mike Medavoy put it in turnaround.  They brought it to me and I didn’t say yes.  And I should have.  Do we all have regrets?  Yeah.  That’s one of my favorite movies and I had the opportunity to do it and didn’t.  It isn’t quite the same as putting something in turnaround, and I know how Bob Daly feels about Home Alone. 

DEADLINE: Pulp Fiction was a frantic trip down the rabbit hole with dark imagery, but was there something that made you feel it wasn’t a Universal film? 

POLLOCK: No.  It was more that we had a lot of really good movies that year, already.  I liked Reservoir Dogs, but when I read the script, it wasn’t as funny for me on the page as it was when Quentin Tarantino made it.  He is a terrific director.  I’m sure that if we’d had nothing in the pipeline that I would have made it.  Ultimately I just didn’t read it with the humor that the movie ultimately had.  Aside from being a lot of other things, that movie is funny as hell.  Does that qualify as a regret?  Yeah, it does. 

DEADLINE: Well, it’s nothing like what is happening with Star Wars.  I’ve never seen anything quite like this. 

POLLOCK: Me neither.  I went to the premiere and I said that to George, that I’d never seen anything like it.  He seemed a little stunned by it all. 

DEADLINE: Did he thank you? 

POLLOCK: No, not at that particular moment.  But yes, over the years he has.  Absolutely.  On that particular night, that would have made it all about me, and we were all very much in awe of the phenomenon that Star Wars was, and is again.  And quite frankly, the really terrific job that Disney and, I’ll give Kathy Kennedy some credit, in marketing it.  And the movie is really good!  I’m on the AFI Jury and we put it on the 10 Best List.  Peter Travers put on his 10 Best List.  Joe Morgenstern of the Wall Street Journal hates everything and he liked it.  It would not surprise me to see it on a lot of 10 Best lists.  It’s a movie that set expectations so high, and then fulfills them.  I went in thinking, this can’t possibly live up the expectations we all had for it.  And it did.