It’s the late 1979’s, and Star Wars is the highest grossing movie in the world. With its sequel The Empire Strikes Back on the way, George Lucas has made the very best of a clause in his contract that allowed Lucasfilm to not only maximise profits from merchandise surrounding the film, but also sequel rights, meaning Episode V was an LFL production distributed by 20th Century Fox rather than a Fox production made by Lucasfilm. Now focusing on Raiders of the Lost Ark, George Lucas and Steven Spielberg agreed favourable terms to make Raiders, but by the time of the 1984 prequel Indiana Jones and the Temple of Doom, Lucas – post original trilogy, building Lucasfilm and divorced from Marcia Lucas – looked to renegotiate the terms for a sequel, something then Paramount boss Barry Diller looks back on in his new memoir Who Knew.
“[I wanted to] make certain that if it were successful, we wouldn’t be in the position of Fox,” he wrote. “I insisted we had the right to make sequels on the same terms as [Raiders], given that the terms on the [first movie] were so much higher than anyone else had ever received. I wanted to retch once, and then not have to regurgitate in a new negotiation if the film was a success. And I wanted it in the clearest, most unambiguous language that all the parties agreed to and understood; there would be no new negotiating if George Lucas wanted to do a sequel.”
After all the back-and-forth, Lucas and Spielberg made Raiders on schedule and on budget and it went onto become a massive blockbuster in 1981. But two years later, when the parties began to hash out the sequel, Indiana Jones and the Temple of Doom, Lucas insisted on a renegotiation for more money, Diller claims.
“He wanted more,” Diller writes. “I was enraged. We had made such a big deal out of never having to be put in this position, and yet that was exactly what was happening. I couldn’t believe it, and thought, Well, maybe this is just the lawyers out on their own for more money. I called George and said, ‘Can this be happening?’”
“This deal, the most generous in history, isn’t worth it?” Diller says he pressed, to which Lucas reportedly replied, “No, not really.”
Diller claims he told Lucas, “But you made a legal and moral commitment to honor these sequel terms. Here you are, someone who doesn’t live in Hollywood because you loudly decry the amoral atmosphere of the company town, and then you blithely renege on an agreement made in good faith.”
Eventually, Diller gave in and renegotiated and the sequel, Indiana Jones and the Temple of Doom, was also a big blockbuster. But Diller had some hard feelings. Concludes Diller: “I hadn’t expected to find that the Hollywood-bashing, take-the-high-ground George Lucas was actually a sanctimonious, though supremely talented … hypocrite.”
