In a legendary act of creative anxiety and friendship, George Lucas, utterly convinced his passion project “Star Wars” would be a massive flop, making a desperate bet with Steven Spielberg in 1977—a move that has earned Spielberg millions of dollars for decades.
The Desperate Bet on the Horizon
Deep in the grueling post-production of Star Wars: Episode IV – A New Hope , George Lucas was riddled with stress and self-doubt. Studio executives were skeptical, and the technical challenges of his ambitious space opera were relentless. His pessimism was amplified by the anticipation surrounding his friend Steven Spielberg’s competing sci-fi film, Close Encounters of the Third Kind , which was generating significant buzz. Feeling the pressure, Lucas Spielberg’s visited set and, in a gesture born of panic, made a profound proposition: “I’ll give you 2.5% of Star Wars if you give me 2.5% of Close Encounters.” Spielberg, accepting merely to comfort his friend during a difficult time, agreed to the terms.
A Royal Flush for Spielberg
When Star Wars premiered on May 25, 1977, the flop Lucas feared was never materialized. It instantly became a cultural phenomenon and a groundbreaking box office smash, grossing $775.8 million worldwide in its initial run. While Close Encounters was also a huge hit, grossing $303.8 million worldwide, the bet decisively favored Star Wars . Crucially, the 2.5% stake Spielberg received was in the film’s adjusted net profits. As Star Wars explodes into a sprawling, global franchise spanning sequels, prequels, and massive merchandise sales, Spielberg continues to receive a passive income stream. Even after Lucas sold Lucasfilm to Disney for $4.05 billion in 2012, reports indicate Spielberg’s contract stipulated the continuation of his percentage. Spielberg is famously quoted saying he still gets a check every time they make a new Star Wars movie.
The Underestimated Masterpiece
Lucas’s moment of self-underestimation results in one of Hollywood’s most profitable, passive income streams for his friend. This legendary tale highlights the often-unpredictable nature of art and commerce, where betting against your own masterpiece can make someone else incredibly rich. The handshake occurred at the nexus of a significant shift in cinema, confirming the arrival of the modern blockbuster era, pioneered by Spielberg’s Jaws two years prior and cemented by Star Wars .