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When STAR WARS opened May 25, 1977 only Steven Spielberg thought it would be a hit.

George Lucas had been turned down by United Artists, Disney and Universal before pitching 20th Century-Fox his sci-fi epic inspired by 1930’s serials like FLASH GORDON & BUCK ROGERS, the 1966 TV series STAR TREK and Frank Herbert’s 1965 novel DUNE.

Fox creative affairs chief Alan Ladd, Jr. greenlighted STAR WARS, but Fox’s distribution arm never considered it a likely hit. Fox marketers wanted to change the title because they felt moviegoers might think STAR WARS was about the Vietnam War or, perhaps, about Elizabeth Taylor & Richard Burton’s messy divorce war.

When Lucas screened a rough cut for some of his director pals, they weren’t impressed. Brian De Palma reportedly called it the “worst movie” ever made. Spielberg, however, predicted STAR WARS would be “the biggest movie of all time.” Lucas thought STAR WARS was doomed and skipped its premiere to vacation with Spielberg in Hawaii.

When they heard STAR WARS was a boxoffice phenomenon, they sat down and  came up with a new project to do together — RAIDERS OF THE LOST ARK (1981), which became the first INDIANA JONES blockbuster.

Exhibitors were initially reluctant to book STAR WARS, thinking only kids and sci-fi buffs would buy tickets, so it opened at just 32 theatres. Two days later, it was in 43 theatres and a week later in 157. It peaked in mid-August at 1,096 domestic cinemas, a very wide run then.
Produced for $11M, its original release did $307.3M domestic, a huge gross at the time.

Fortunately for Lucas, after doing a modest deal with Fox for $175,000 in fees, he gave up $500,000 in additional compensation and asked instead for 40 percent of the STAR WARS merchandising rights. Fox readily agreed because its 1967 merchandising driven musical DOCTOR DOLITTLE had been a disaster.

Lucas later obtained all STAR WARS’ merchandising rights – which brought him $32B+ over the next 40 years to build his Lucasfilm empire and control the STAR WARS franchise. In October 2012, Disney bought Lucasfilm for $4.1B in cash and stock.

In 1977, before STAR WARS opened, Lucas visited Spielberg on his CLOSE ENCOUNTERS OF THE THIRD KIND set. Lucas thought ENCOUNTERS would outgross STAR WARS, but Spielberg insisted that STAR WARS would do best. Lucas proposed a deal where they’d pay each other 2 1/2 percent of their film’s theatrical profits.

ENCOUNTERS to date has grossed $306.9M worldwide, but STAR WARS — now known as STAR WARS: EPISODE IV – A NEW HOPE — leads with $775.4M worldwide. Spielberg and Lucas are reportedly still trading profit participation payments from their 1977 boxoffice bet.