Talking About 'Star Wars': How did George Lucas finance a big-budget movie like 'Star Wars' when he’d only directed two movies previously?

Poster art by Greg and Tim Hildebrandt. © 1977 20th Century Fox Film Corp. 

On Quora, member Kisty Arant asks:

How did George Lucas finance a big-budget movie like Star Wars when he’d only directed two movies previously?

George Lucas did not self-finance 1977’s Star Wars. He had to get a major studio to put up the money in order for Lucasfilm Ltd. to make the film, and it was no easy task.

First of all, while Lucas had helmed two feature-length films (THX-1138 for Warner Bros. and American Graffiti for Universal), only one was a box office smash.

Second, even Universal’s Ned Tanen, who appreciated the success of 1973’s American Graffiti, was reluctant to invest the studio’s money into such an iffy proposition as a space fantasy film aimed at young people. In the 1970s, American moviegoers tended to eschew escapist fare in favor of more gritty and realistic films. Furthermore, science fiction and fantasy films tended to cater to a small niche of genre fans and were rarely profitable; Stanley Kubrick’s 2001: A Space Odyssey was a rare critical and commercial success, earning $25 million at the box office when it was released in 1968. Planet of the Apes brought $18 million to 20th Century Fox’s coffers that same year.

Those were - then - respectable grosses, but hardly a reason for a studio to invest $10 million or $11 million into a movie that might earn just enough money to barely break even. And because most studios had disbanded their special effects departments, the visuals suggested by Lucas’s story treatment and Ralph McQuarrie’s production paintings looked like they would require a lot of a studio’s cash to allow Lucas and producer Gary Kurtz to set up Lucasfilm’s Industrial Light and Magic division.

George Lucas and Mark Hamill (Luke Skywalker) on location in Tunisia, March 1976. Photo Credit: Lucasfilm Ltd. 

Universal Pictures, which had financed American Graffiti, turned George Lucas down. So did Warner Bros. So did Paramount.

If Alan Ladd, Jr., Vice President for Creative Affairs at 20th Century Fox, had not been impressed by American Graffiti and the talents of its young director, George Lucas would not have gotten the studio to put up the money for Star Wars. That’s why Star Wars - Episode IV: A New Hope is the only film of the franchise that is not owned outright by Lucasfilm Ltd. It was fully financed - and therefore owned - by the old 20th Century Fox Film Corporation.