← Good Bad Billionaire
Good Bad Billionaire
Encore - Film Stories: George Lucas and Peter Jackson
01:04:29
How film directors George Lucas and Peter Jackson went from zero to a billion
Loading summary
Transcript309 lines
- [00:00]
Simon Jack
This BBC podcast is supported by ads outside the uk.
- [00:06]
Oracle Cloud Advertiser
In business they say you can have better, cheaper or faster, but you only get to pick two. What if you could have all three at the same time? That's exactly what Cohere, Thomson Reuters and Specialized Bikes have since they upgraded to the next generation of the cloud. Oracle Cloud Infrastructure OCI is the blazing fast platform for your infrastructure, database, application development and AI needs where you can run any workload in a high availability, consistently high performance environment and spend less than you would with other clouds. How is it faster? OCI's block storage gives you more operations per second cheaper. OCI costs up to 50% less for computing, 70% less for storage and 80% less for networking better. In test after test, OCI customers report lower latency and and higher bandwidth versus other clouds. This is the cloud built for AI and all your biggest workloads right now with zero commitment. Try OCI for free. Head to oracle.com strategic that's oracle.com strategic.
- [01:12]
Ryan Reynolds
Mint is still $15 a month for premium wireless and if you haven't made the switch yet, here are 15 reasons why you should 1. It's $15 a month.
- [01:22]
Zing Singh
2.
- [01:22]
Ryan Reynolds
Seriously, it's $15 a month.
- [01:25]
Simon Jack
3.
- [01:25]
Ryan Reynolds
No big contracts.
- [01:26]
Zing Singh
4.
- [01:27]
Ryan Reynolds
I use it.
- [01:27]
Simon Jack
5.
- [01:28]
Ryan Reynolds
My mom uses Are you playing me off? That's what's happening, right? Okay, give it a try@mintmobile.com Switch upfront.
- [01:35]
Advertisement Announcer
Payment of $45 per 3 month plan $15 per month equivalent required New customer offer first 3 months only then full price plan options available, taxes and fees extra. See mintmobile.com.
- [01:47]
Zing Singh
Hello, I'm Zing Singh.
- [01:48]
Simon Jack
And I'm Simon Jack.
- [01:49]
Zing Singh
We're excited to tell you that brand new episodes of Good Bad Billionaire will be coming very soon. We will be telling more stories of how some of the richest people in the world made all their money. And we will be asking you our listene to get in touch and tell us if you think each of them is good, bad or just another billionaire.
- [02:05]
Simon Jack
I can reveal that our new season will feature more than one billionaire who made their fortune in the film industry. In fact, we'll be starting with our first action hero Billionaire. Can you guess who that might be?
- [02:16]
Zing Singh
But before that, as the world of cinema has brought us some of the best stories in the Good Bad Billionaire back catalog, we're going to share two classics with you again. The stories of two directors who conquered the silver screen the and made billions of dollars by creating some of the biggest film franchises in history.
- [02:33]
Simon Jack
First up, maybe my favorite billionaire because he Created something that I've loved since I was a child. The Star wars universe. So from 2023, here's the story of how its creator, George Lucas, went from zero to a billion.
- [02:46]
Zing Singh
Our story begins in a kind of bucolic childhood in the forties in little small town Modesto, California. And George Lucas is born to a small town business guy who runs a stationery shop.
- [03:00]
Simon Jack
And he described him as the kind of guy you'd meet in a movie. And actually some of his early success was around the nostalgia of that kind of scene.
- [03:08]
Zing Singh
Right, that kind of suburban Americana.
- [03:10]
Simon Jack
Right, exactly. So he loved making things. He was into science fiction, comic books. He was a massive fan of Flash Gordon. And that actually becomes quite an important moment in his career.
- [03:21]
Zing Singh
Okay, I have to admit that I sort of vaguely know the name Flash Gordon, but I don't actually know what it's about.
- [03:26]
Simon Jack
Oh, man, this is. You're making me feel old now. Okay. So when I was a child, there were these black and white TV shows, and Flash Gordon was a kind of all American, good looking guy. It was interesting because in the opening credits for Flash Gordon, the words about, you know, what had happened so far in Flash Gordon gently drifted off into the distance, exactly like it does at the beginning of the star wars film. So the influence is very plain to see.
- [03:53]
Zing Singh
Interesting. And actually, you know, what I did find out in the process of researching is that all of those kind of childhood influences came up again and again in George Lucas adult life as a filmmaker. So that opening sequence of Indiana Jones where he's being chased by a boulder. When he was growing up, George Lucas was a huge fan of Scrooge McDuck from the Disney comics. And there's a Scrooge McDuck comic that opens with the exact same scene.
- [04:17]
Simon Jack
What, with a big boulder rolling?
- [04:18]
Zing Singh
Yes, with a big boulder rolling after Scrooge's henchmen.
- [04:21]
Simon Jack
God, isn't it funny how these things, these notes come back?
- [04:23]
Zing Singh
I mean, it's kind of wild how, you know, your childhood kind of comes back to influence you. And, you know, he clearly loved fantasy science fiction. His best subject was art and music. He's a creative guy, but he doesn't really do that well at high school. And he didn't do so well for a reason that really surprised me, and that is because he wanted to be a racing car driver.
- [04:45]
Simon Jack
He wanted to be a racing car driver, But I think his dad bought him a pretty sensible little car, but he souped it up. He's pretty practical. He was an early kind of Tinkerer, basically.
- [04:53]
Zing Singh
Not so far removed from, you know, Luke Skywalker, for instance, but his kind of boy racer dreams are kind of dashed right, because around high school, just before he graduates, so you can imagine this young George Lucas riding around his souped up yellow car, he gets hit by a truck and he gets flung out of the car driving seat and very nearly dies.
- [05:15]
Simon Jack
Yeah, and this is an important moment because that's when he stopped driving the cars and started filming them instead.
- [05:20]
Zing Singh
Which in those days, you know, wasn't as easy as just getting your phone out and filming it. Right. You required a camera. He actually had a Super 8 and you had to know what you were doing. Which is why I think he ends up going to a very famous film school called USC to study film.
- [05:35]
Simon Jack
University of Southern California. Obviously everyone has to make some kind of, you know, movie. And he comes up with a kind of weirdly titled film which was his kind of major student contribution.
- [05:46]
Zing Singh
It's quite an odd film. I mean, I watched a little bit of it. It's called electronic labyrinth, THX11 for EB. Bit of a mouthful to say the least.
- [05:57]
Simon Jack
Sounds like something Elon Musk would call his dog or something.
- [06:01]
Zing Singh
Oh, yeah, definitely. Or, you know, a parakeet or something like that. But if you want to go look it up, it's actually pretty interesting for. For the time, you know, this is the kind of late 60s and it's about a dystopian world where people are reduced to numbers. You know that THX113 is actually a person's name and they live in this authoritarian system where they're trying to break out. So it's actually very reminiscent of the Star wars universe and interesting that, you.
- [06:24]
Simon Jack
Know, just th in itself will come up later. I don't know if you've been to the cinemas in the last 10 years, but there are times when they'll flash up. The sound system that you're using in this movie theater is called thx. And THX is the company that he founded which specialized in cinema sound. You can still see that THX logo in cinemas today. And that was when he was at film school.
- [06:47]
Zing Singh
Oh, wow. Okay. Well, I had no idea that was what THX actually came from. I just assumed it was a coincidence.
- [06:53]
Simon Jack
No, not at all. No, that's his company, so one of many, as we'll see. So as. As weird as the title was, it actually launched him.
- [07:01]
Zing Singh
Right. So he wins this prize at the National Student Film Festival and gets a scholarship to Warner Brothers, which is, you know, this big film Studio. It's still going. And he meets this guy who's five years older called Francis Ford Coppola.
- [07:15]
Simon Jack
Francis Ford Coppola. Never heard of him. So he's met Francis Ford Coppola, who goes on to be the director of the Godfather. And they found a new film studio together called American zoetrope. He's only 25, so he's clearly got a commercial head on his shoulders as well as a creative.
- [07:30]
Zing Singh
And it's at this point that Warner kind of throws 300,000 Lucas's way to develop this THX student short into a feature. But it is unfortunately, a commercial flop, and Warner hates it, and they actually withdraw their money. And even though, you know, it's now considered a little bit of a cult classic at the time, people just kind of wrote it off.
- [07:53]
Simon Jack
And learning to fail is kind of an important thing about becoming a billionaire. You've got to have the balls, I suppose, or the wherewithal or the determination. Sort of dust yourself down from your first misstep to do it again, having learned from that. And I think that that is a defining feature of some of the billionaires we've covered, actually. Their ability to have another go.
- [08:13]
Zing Singh
And failure actually works out pretty well for at least Coppola, because to pay back some of the money that they lose from this Warner deal, he has to take on a paid job to direct a film that makes him the Godfather.
- [08:23]
Simon Jack
Oh, my God. What a happy accident that is.
- [08:25]
Zing Singh
A happy accident. A little fun twist of fate. But it doesn't go so well for George. Right? So THX flops. He marries his film editor girlfriend, Marcia Lou Griffin, and ends up having to live off her salary for a bit.
- [08:38]
Simon Jack
He's basically out there scrabbling around, living off her salary. I think they spent their last $2,000 on a trip to Cannes, the famous film festival, to try and raise some money. Cannes is like all the great and the good of the film world. Lots of deals are done, lots of parties are had, and some of the things that we'll see on cinema next year were probably deals done in Cannes last year. That's the kind of way it works.
- [09:01]
Zing Singh
At 2am over a glass of champagne.
- [09:03]
Simon Jack
Yeah.
- [09:04]
Zing Singh
Or something else.
- [09:05]
Simon Jack
Or something else, by all accounts.
- [09:07]
Zing Singh
But he gets $10,000 from David Pickett, who's the president of United Artists, to develop this film called American Graffiti.
- [09:16]
Simon Jack
Yeah.
- [09:16]
Zing Singh
Which ends up being the film that turns his career around, by the way.
- [09:19]
Simon Jack
He sets up his own company on that. 10,000. $10,000. You think I'm going to pay my Rent, whatever. He sets up Lucasfilm Ltd. That turns out to be a really good idea. American Graffiti. Now, I don't know if you've seen it. I've seen it. I can't remember what happens in it, but I remember the kind of impression of it. It was this great nostalgic snapshot of America set, I think, in Modesto, California. It's an enormous critical and commercial success.
- [09:46]
Zing Singh
But again, you know, George Lucas doesn't have a very good time on the journey to getting it out. So everyone turns American Graffiti down. Universal ends up offering $750,000 and budget to get it made, but relatively small bucks for movie.
- [10:03]
Simon Jack
And he has to be pretty smart about how he uses that money. So, for example, rather than hiring in stuntmen and cars, he goes and finds people who owns these cars and pays them, you know, peppercorn amount of money just to drive them around. So he doesn't do it through the agencies or whatever. He's pretty smart about how he uses the money.
- [10:19]
Zing Singh
And I think that's a real billionaire trait. Right. I mean, he's making these deals with people who otherwise wouldn't be able to get a look in. He's taking risks rather than doing things the right way that Hollywood says it should be done.
- [10:31]
Simon Jack
Yeah. So he's pretty canny about the way he uses his money. And he's also. It's interesting because in movies, you can either take a big upfront fee or you can take what they call points. And a point means a percentage point, which means that for every dollar of the cinema ticket price, he's getting some money. Shows him remarkable confidence in his own product and his own thinking. To turn down more money up front but keep hold of the property long term. In American Graffiti, for example, he turns down more money up front, but wants a 40% share of the Prof. Of the entire movie. And that's something that is not normally given out to, you know, a jobbing director, for example, or a jobbing writer. They would usually be on 5 or 10 points max. So he's taken less money up front, but is confident in what he's doing, and he'll make more money later on if and when it proves to be a success, which it did.
- [11:24]
Zing Singh
And is that something that studios are open to kind of negotiating or because it's seen as less risky for them? So if the movie doesn't do well, they're like, well, we only paid this guy. I mean, he got paid 50 grand for American Graffiti. So the studio can just say, well, we didn't Pay him that much anyway, so.
- [11:39]
Simon Jack
Exactly right. You're reducing your fixed costs and you are giving this person an option on the success. Now studios always regret giving money away once it proves to be a success. That's the way it works.
- [11:54]
Zing Singh
And I think the studio at this point thought American Graffiti would not do well because they actually wanted to re edit it for tv, which at the time was not considered a very good place for a film to end up, unlike right now. But when they showed the studio editors the film, they said, oh, this is going to be a hit. So they went with a kind of cinema release. And guess what? George Lucas and the studio editors were right.
- [12:17]
Simon Jack
It was a smash hit. It made over $55 million. It cost just over a million dollars to make one of the biggest returns on initial investment like 55 times of any film ever. And in Hollywood, if you can turn a little bit of money into a lot of money, you suddenly become a player. And of course his gets him to his first million, in fact, $4 million. So at this point, American Graffiti, he's a millionaire.
- [12:40]
Zing Singh
And don't forget, this is all done at the tender age of 28.
- [12:45]
Simon Jack
And he got five Oscar nominations. Best film, best director, best screenplay, one for his wife as co editor. Sadly, they didn't win any of them, but that didn't stop them.
- [12:54]
Zing Singh
Who cares about the Oscar when you've got 4 million in the bank at the age of 28?
- [12:58]
Simon Jack
It's funny, I think when they look back, they really care about the Oscars, but only when they're really rich. And then they go, oh gosh, the Oscars count more than anything. It's all about the art. When you' got the money. When you haven't got the money, it's all about the money.
- [13:14]
Zing Singh
We've now established he's four times a millionaire. But how does he get to a billion? Because that is quite significant. Amount more money.
- [13:22]
Simon Jack
It's a mind boggling amount of money. So to do that he needs to move into a totally different league. But it was just after the making of American Graffiti that he starts on the project that we all know him for.
- [13:34]
Zing Singh
And he described it at the time as a space opera in the tradition of Flash Gordon and Buck Rogers. It's James Bond in 2001, A Space Odyssey combined. But it's not camp.
- [13:44]
Simon Jack
Yeah, because you'd be forgiven thinking it might be with that description.
- [13:47]
Zing Singh
Exactly.
- [13:48]
Simon Jack
But what's interesting also is that he wanted to do a film version of Flash Gordon. But it turns out that Dino De Laurentiis The Italian American director owned the rights and wouldn't let him do it. So actually it was only because he couldn't do it, Flash Gordon, that he basically said, okay, well, if I can't do Flash Gordon, which I love from a child, I'll invent something else, something better. And that's what he did.
- [14:10]
Zing Singh
So there wasn't loads of pickup initially for Star wars, so fox offered him 150k to write, direct and exec produce it. He managed to renegotiate that after the success of American Graffiti and he was offered half a million. But he again kind of decides to take a lower director's fee and a longer view.
- [14:28]
Simon Jack
He took £150,000 plus merchandising. And as someone who owned a lot of Star wars figures in my youth, that turned out to be one of.
- [14:36]
Zing Singh
The smartest spoofs ever and important for something that will eventually become a franchise. He gets the sequel rights and he also gets a 40% profit share.
- [14:47]
Simon Jack
Some people have talked about that as maybe the best deal in Hollywood history. It probably didn't look like that at that time because this thing doesn't exist yet, Right. So the studios are signing away the rights to something they haven't even imagined or thought about. But he has, clearly. And I think that's one of the things when people say, oh, the studios are really stupid. Maybe they were, but it's quite hard to say. 40% of nothing is nothing.
- [15:13]
Zing Singh
And funnily enough, I actually went and found out what the first name of Star wars was. Do you want to know what it is? The first draft, it was called originally Adventures of the Starkiller as taken from the Journal of The Will Saga 1, the Star Wars.
- [15:26]
Simon Jack
Whoever edited that needs a medal.
- [15:28]
Zing Singh
And I guess if, you know, if you're a studio exec and this kind of excitable guy in his late 20s who's only ever made two films, one of which was a commercial flop, comes in and says, I've got a great idea. It's called the Adventures of the Starkillers. Taken from the Journal of the World Saga 1 to Star Wars. You are going to think to yourself, yeah, right, Pull the other one.
- [15:48]
Simon Jack
Yeah, thanks, kid. Not today.
- [15:50]
Zing Singh
But I think this is the thing about George Lucas. He's consistently underestimated by studios who just don't have faith in his vision. But he seems like a pretty idiosyncratic, persistent guy to want to keep going regardless. And that's the thing about fantasy, right? It's really hard for someone else to imagine your vision unless you kind of bring it to life.
- [16:09]
Simon Jack
Yeah. And the other thing is, if you think about Hollywood at this time in the 1970s, it's a moment of like high art. You've got things like Dog Day Afternoon, Serpico, Heaven's Gate. It was all really artistic directors doing highbrow cinema about stuff. So this comes in at a completely different level. It's a blockbuster. It's got robots and blasters and lightsabers and good and evil and Jedi warriors and all that kind of stuff. And they're going, man, that is so far away from the kind of worthy arty stuff we're doing. And actually it changed the entire movie industry in unpopular ways. For those people who think it was Jaws and Star wars that destroyed for many people the movie industry, because then it became all about the big blockbuster. Right.
- [16:54]
Zing Singh
The death of cinema and the birth of. Of the blockbuster.
- [16:58]
Simon Jack
Exactly right.
- [16:59]
Zing Singh
So initially Star wars is shot in Pinewood in the uk, still a big location for films. And it doesn't really cost that much. It only goes 600k over budget, partly due because the pound isn't doing very well at that time.
- [17:11]
Simon Jack
One of the reasons they came to London to do it, in fact, because the pound was, was weak.
- [17:15]
Zing Singh
But with post production special effects, you know, that budget goes up to 2 million, which is mostly covered by Lucasfilm themselves.
- [17:21]
Simon Jack
And you've got to hand it to him for that. There's very few who put their own money on the table. So he basically takes the money he made from American Graffiti and plan into his next film. And as we'll see, that's a pattern that emerges. So he backs himself. He's not just spending other people's money, he's spending his own.
- [17:36]
Zing Singh
And when you take on the risk yourself, that also means you have to set up structures and institutions for you to funnel that risk through. Which is why he creates his own special effects company, Industrial Light and Magic, to do all the effects for Star Wars. And the thing that I find really lovely and sweet about the first Star wars is I went and read up about how they did a special effects and you know that crawling text going up? Apparently that wasn't even cgi because that kind of effect didn't really exist at the time. So they actually got a six foot long piece of black paper with the yellow text.
- [18:08]
Simon Jack
Are you kidding me?
- [18:09]
Zing Singh
And rolled the camera over it to make it seem like the text was moving. And that is the first moment.
- [18:13]
Simon Jack
That is unbelievable. I did not know that.
- [18:15]
Zing Singh
But you know, when Star wars was being made, even during that point, George Lucas best friends were not very sure about it. So there's an amazing story about how Lucas shows an early version of it to friends with some World War II movie footage spliced in with the action scenes. And the story is that everyone just absolutely hated it, apart from a little guy called Steven Spielberg.
- [18:39]
Simon Jack
He said it would make $100 million. He was wrong because he was low.
- [18:44]
Zing Singh
I mean, you know, there's an amazing interview with George Lucas where he says, my friends saw the film and they said, poor George, what was he thinking? And Steven Spielberg jumps up during the screening and says, this is going to be the biggest movie of the year. And everybody in the room looks at Steven Spielberg and goes, poor Stephen.
- [19:02]
Simon Jack
Who's laughing now, those two. So it was released. So Star wars was released on 25 May 1977. Its final budget was $11 million and it soon became the highest grossing film of all time, 307 million on its first theatrical release. And Lucas made an initial $12 million on that first release after taxes. So it's a massive success.
- [19:25]
Zing Singh
And what's interesting is that I don't even think George Lucas himself knew it was going to be this much of a hit. I think he knew in his mind, you know, sci fi films, a certain demographic, cult following. But what changes his mind is this phone call from a studio exec while he's on holiday in Hawaii. And the studio exec calls up and goes, george, turn on Walter Conkright on CBS right now and take a look. And they had a huge story on the news about the number of people lining up to see the film. And it's queues around the block all over America.
- [19:55]
Simon Jack
I was in that queue when it came to England, I have to confess, there I was in the queue. Seven years old, couldn't wait.
- [20:01]
Zing Singh
It's hard to imagine now that kind of of hysteria for a film. I mean, maybe you get it with the early Harry Potters or the early Marvel films, but certainly it's kind of hard to think of a film right now. I think it's the closest one you could say is Barbie.
- [20:15]
Simon Jack
I suppose the only parallel at that time would have been something like jaws, which was 76, 75, 76, but nothing which was kind of out there in.
- [20:24]
Zing Singh
Terms of creating a new world and also multi generational. Right? So 7 year old, you could watch it. A 28 year old could watch it. A 50 year old could watch it.
- [20:32]
Simon Jack
Yeah, my mum fell asleep whilst I was watching it.
- [20:34]
Ryan Reynolds
She took.
- [20:36]
Simon Jack
I said, how did you fall asleep in that there were like explosions going on all over the place. The most exciting thing I've ever seen, you fell asleep. So it's a massive success. And also the thing I remember from that period was that everyone had the toys. Everyone wanted the Han Solo whatever, because he was the coolest guy in it. Obviously Mattel have been doing this with Barbie, but that sense of wanting to own something which was connected to the franchise I think was kind of new.
- [21:03]
Zing Singh
And lots of people are thinking, think that's where he made all his money. Right. But I think the merchandising is where actually he may have come off with a slightly bad deal.
- [21:11]
Simon Jack
Yeah, that's right. Because it was made by a company called Canna Products, and they gave Lucasfilm only 5% of sales for every dollar they're getting.5 cents. Nevertheless, you know, they sold a lot of them. So by 1979, he made about $20 million out of that. But suffice it to say, his business partner, the toy manufacturer Kenner, made a lot of money. Money.
- [21:33]
Zing Singh
But you know, this money still goes a long way for George Lucas. So this is the point where he buys his own ranch, a place you might have heard of called the Skywalker Ranch. Rolling green hills, 26 acre vineyard, olive grove, working farm. It even has its own honey that it produces, which I enjoyed finding out about. And you know, he buys a Ferrari, even though he still kind of goes around wearing that jeans and check shirt, that iconic kind of George Lucas look with a beard and the glasses. So he's kind of enjoying his wealth, but he hasn't completely lost touch with reality.
- [22:05]
Simon Jack
But he's become a bit more of a film mogul rather than a sort of producer director. In fact, Star wars is the last film on which he appears with a directing credit for some time. But he's got a lot of money. He owns the property, he's got 40% of the rights. And the sequels were always part of.
- [22:23]
Zing Singh
The plan, but it wasn't an easy ride to get to the sequels. Right? I mean, even when he was trying to raise funding for the Empire Strikes Back, bank of America said, no, we're not gonna fund it. Even though Star wars is a big hit, because no sequel ever earns more than what the original movie does.
- [22:38]
Simon Jack
I mean, it's one of those famous pub debates, isn't it? How many sequels are better than the originals? And you know, the purists will say empire Strikes Back. But you're right. Luckily he's made quite a lot of money on his own. And he's able to self finance the sequels, which again, allow him a massive ownership stake in what he's got.
- [22:56]
Zing Singh
Right. So he takes a 77.5% share to Fox's 22.5. So Fox only really is in charge of distribution. Everything else is George Lucas.
- [23:06]
Simon Jack
That is wild. That basically puts him in the kind of independent filmmaker category. Usually an independent filmmaker is someone who's shooting grainy stuff. Da, da, da. Here's a guy who's got a blockbuster kind of franchise on his hand, and we describe him as an independent film producer, but he built that independence through these years.
- [23:25]
Zing Singh
And Empire Strikes Back goes on to gross nearly 210 million million, which means that quite a lot of that money is going straight back into Lucasfilm.
- [23:33]
Simon Jack
He's got enough money to make a.
- [23:34]
Zing Singh
Couple more, and the hits just keep coming. 1981, Raiders of the Lost Ark. He makes it with Steven Spielberg, and that makes $330 million worldwide.
- [23:45]
Simon Jack
Yeah, we should probably dwell a little bit on how that happened, because the second most exciting film I ever saw in my life was when I was 11, which was Raiders of the Lost Ark. I was with my friend Roger, and we went in and we came out and we went, bloody hell. That was so exciting. And that film, the story of that film came about on a beach when the two of them were sitting there with the sand between their toes. And that obviously becomes an absolute smash hit as well. So everything he's touching right now is turning to gold.
- [24:14]
Zing Singh
But this is the point at which his personal life kind of falls apart. So in 1983, the same year as Return of the Jedi, him and his wife Marcia end up divorcing. And that's how we actually know how much he's worth at this point, because she ends up getting $50 million in the divorce settlement.
- [24:32]
Simon Jack
Okay, so that gives us a pretty good guide to his personal wealth. Must be around the $100 million mark. So please. Still somewhere off a billion.
- [24:39]
Zing Singh
Well, I mean, he's significantly far off a billion. And to add to the drama, there's also a cash flow problem. There are Lucasfilm flops. I mean, anyone remember Tucker the man in his dream Radio Land Murders?
- [24:53]
Simon Jack
I'm afraid to say I do, but I'm probably in a population of about one.
- [24:57]
Zing Singh
I mean, the most famous film that I remember from this period, Labyrinth is initially a bomb as well.
- [25:04]
Simon Jack
No, but that becomes a cult classic. But many years later, it wasn't a commercial success. Had David Bowie in it, didn't it?
- [25:09]
Zing Singh
Yeah, it did. And a young. A very young Jennifer Connelly.
- [25:12]
Simon Jack
Wow.
- [25:13]
Zing Singh
But you know, it's still not good tidings for George Lucas because. Because when films become a cult classic, it doesn't put any money in your pocket right there and then.
- [25:20]
Simon Jack
Yeah. So at this point he's actually, you know, Lucasfilm itself is actually running out of money. But a young tech entrepreneur comes to his rescue.
- [25:29]
Zing Singh
Steve Jobs. I just love this. This is like a cinematic universe of billionaires kind of coming together.
- [25:34]
Simon Jack
You know, it's like Tony Stark meeting blah blah, blah or whatever. It's like, hey man, I'm running out of money. Don't worry. Steve Jobs here, He paid him $5 million for the graphics group, which they changed their name to Pixar. Another money making colossus, of course. Home of Toy Story cars.
- [25:51]
Zing Singh
George Lucas ends up kind of hanging on by the skin of his teeth. Thanks to someone we'll talk about in another episode, Steve Jobs. And eventually, you know, it's kind of fine. He kind of makes it out through this tough patch. Indiana Jones and the Last Crusade ends up making $450 million worldwide in 1989. So he's still, he's getting money back into his pocket.
- [26:11]
Simon Jack
But eventually it is Star wars that brings in the billions. Cause they package up the original ones.
- [26:17]
Zing Singh
Yes. So PepsiCo, which owns Pepsi, if you can tell by the name, also owns fast food chains like Taco Bell, Pizza Hut, kfc. It's also the reason why, annoyingly, if you go into kfc, you can't get a Coke, you can only get a Pepsi. And PepsiCo approaches George Lucas and says.
- [26:35]
Simon Jack
You'Re getting in trouble for that. Come on.
- [26:37]
Zing Singh
But it's true. So he works with PepsiCo on a $2 billion tie in. So when the three old films are re released with special effects that he's kind of redone post Jurassic park because now that, you know, technology is so much more advanced. When the prequels, so Phantom Menace etc are released, Pepsi is also on board. I still remember the Phantom Menace toys from kfc. There's some extremely strange stuff that comes out of this deal as well. So if you go onto YouTube and you search for Pepsi Star wars, you'll find some very weird commercials that ran on TV at the time which feature Colonel Sanders, the Taco Bell Chihuahua and a Pizza Hut delivery girl in the Star wars universe talking about selling burgers and pizzas and fried chicken. Because obviously PepsiCo owns all of these fast food chains.
- [27:28]
Simon Jack
Wow. Not every director would be that happy with that kind of mishmash and collage. People would say that is Selling out as well as selling up.
- [27:38]
Zing Singh
But it's really interesting because when you look at films like Barbie Thing, instance, that's kind of what's happening now. You know, it becomes this huge kind of brand deal. And at the time, it's considered the biggest global deal in entertainment history. So for context, in 1996, Coca Cola spends millions on the Summer Olympics in Atlanta. This is absolutely dwarfed by what they do with Star wars and PepsiCo.
- [28:01]
Simon Jack
Okay? So at that point, I think we can ring the bell and say he's a billionaire. So he's a billionaire now. He's ranked by forbes at around 1.7 billion. After that tie in with Pepsi, he's got as much money he will ever need. He could make as many films as he'd like. And he does go on to, as you say, make the prequels. He starts directing these again, and it doesn't go that well. I mean, it goes well commercially, but not critically. People hated them.
- [28:36]
Zing Singh
You know, my experience of Phantom Menace very much lines up with that. I remember queuing to watch the midnight screening of Phantom Menace and then falling asleep. Okay, so commercially, great success. The cinema's packed out. But artistically and critically, I mean, me and my friends were teenagers, if not 10 or 11. We walked out saying, what was that all about?
- [28:58]
Simon Jack
Jar Jar Binks? Not the greatest moment in cinema history.
- [29:00]
Zing Singh
He's definitely not in the top 500 characters ever committed to celluloid.
- [29:04]
Simon Jack
Definitely not. But what was interesting is that you had to see them, right? Yeah, you felt you had to see them. The power of the franchise was so overwhelming that even if you read a view saying, this film stick, I've got to see it anyway. And I think that's sort of the power of the brand. The power of the brand rests in the power of the world. I mean, if you think about Darth Vader, Darth Vader transcends the film franchise in which he operates. You know, he's kind of like a cultural touchstone.
- [29:32]
Zing Singh
And even the little things about the Star wars universe, the sound of the lightsabers going on, Chewbacca's roar. These are not special effects or things that we have dubbed in from the movies. This is Jess Simon, by the way.
- [29:46]
Simon Jack
Sorry, Disney. No trademark suit here, really, when you.
- [29:49]
Zing Singh
Think about it, he's created this cultural behemoth where you just have to be involved and have an opinion, even if it's good, even if it's bad. But interestingly, after the prequels are panned, he basically walks away. He never directs again. The three films that were directed and came out in this decade. Nothing to do with George Lucas andor the Mandalorian, all those Disney series, nothing.
- [30:13]
Simon Jack
To do with George spinoffs like Rogue One, all sorts of things. So basically you've set up a kind of money making machine which is now owned by Disney and he's gone off into the sunset.
- [30:23]
Zing Singh
He marries his girlfriend, he has another child. He actually gets awarded the National Medal of Arts by Obama for contributions to American cinema. And at the same time, his universe, his baby, just keeps expanding, but without his involvement. He's like a God who created the earth and just turned his back on.
- [30:40]
Simon Jack
It and created something that will be probably with us for the rest of my life at least. So that is how George Lucas became a billionaire. The first film director we ever covered on Good Bad Billionaire.
- [30:55]
Zing Singh
Next up, we have the story of the second the director of the hugely successful Lord of the Rings movies, Peter Jackson and Simon. As I said when this episode first came out in 2024, if Star wars was your film franchise when you were growing up, the Lord of the Rings was mine.
- [31:10]
Simon Jack
But as we will discover, it wasn't those films that made him the majority of his vast we to the start and take Peter Jackson from zero to a million.
- [31:30]
Advertisement Announcer
You can make a difference in someone's life, including your own, with a job in home care. These jobs offer flexible schedules, health care, retirement options and free training. They also provide paid time off and opportunities for overtime. Visit oregonhomecarejobs.com to learn more and apply. That's oregonhomecarejobs.com.
- [32:00]
Oracle Cloud Advertiser
In business, they say you can have better, cheaper or faster, but you only get to pick two. What if you could have all three at the same time?
- [32:07]
Zing Singh
Time?
- [32:08]
Oracle Cloud Advertiser
That's exactly what Cohere, Thomson Reuters and Specialized Bikes have since they upgraded to the next generation of the cloud. Oracle Cloud Infrastructure OCI is the blazing fast platform for your infrastructure, database, application development and AI needs where you can run any workload in a high availability, consistently high performance environment and spend less than you would with other clouds. How is it faster? OCI's block storage gives you more operations per second second cheaper. OCI costs up to 50% less for computing, 70% less for storage, and 80% less for networking better. In test after test, OCI customers report lower latency and higher bandwidth versus other clouds. This is the cloud built for AI and all your biggest workloads right now with zero commitment. Try OCI for free. Head to oracle.com strategic that's oracle.com strategic.
- [33:06]
Ryan Reynolds
Hey, it's Ryan Reynolds here from Mint Mobile Now. I was looking for fun ways to tell you that Mint's offer of unlimited Premium Wireless for $15 a month is back. So I thought it would be fun if we made $15 bills, but it turns out that's very illegal. So there goes my big idea for the commercial. Give it a try@mintmobile.com Switch upfront payment.
- [33:28]
Advertisement Announcer
Of $45 for a three month plan equivalent to $15 per month. Ref required new customer offer for first three months only. Speed slow after 35 gigabytes of network's busy taxes and fees extra. See mint mobile.com Time for a sofa upgrade. Visit washablesofas.com and discover Annabe where designer style meets budget friendly prices with sofas starting at $699. Anabe brings you the ultimate in furniture innovation with a modular design that allows you to rearrange your space effortlessly. Perfect for both small and large spaces, Anibe is the only machine washable sofa inside and out. Say goodbye to stains and messes with liquid and stain resistant fabrics that make cleaning easy. Liquid simply slides right off. Designed for custom comfort, our high resilience foam lets you choose between a sink in feel or a supportive memory foam blend. Plus our pet friendly stain resistant fabrics ensure your sofa stays beautiful for years. Don't compromise quality for price. Visit washablesofas.com to upgrade your living space today with no risk returns and a 30 day money back guarantee. Get up to 60% off plus free shipping and free returns. Shop now@washablesofas.com Authors are subject to change and certain restrictions may apply.
- [34:42]
Zing Singh
So Peter Jackson was born on Halloween, which is quite apt actually given his early career in 1961 in Wellington, New Zealand.
- [34:49]
Simon Jack
Yeah, that's the south bit of the North Island. He's the only child of English immigrants. Joan, a factory worker turned housewife Bill, a payroll clerk.
- [34:59]
Zing Singh
Grown up in a coastal village which is some 30km north of Wellington and he's never actually moved from the region. So basically, even when he was making some of the biggest films in the world, he never left New Zealand.
- [35:09]
Simon Jack
He brought the entire film industry to where he was rather than the other way around. Now as a child he was really into special effects in films and idolized this stop motion wizard called Ray Harryhausen which if you remember things like Clash of the Titans used to see these kind of plasticky things move. It kind of looked impressive at time. Looks very dated.
- [35:30]
Zing Singh
Apparently it was seeing the 1933 black and white film King Kong on TV as a nine year old. That completely changed his life, though.
- [35:37]
Simon Jack
Yeah, he said it was a defining moment of my life as a filmmaker. It was a time that I said, that's what I want to do. I want to make movies just like King Kong. And most importantly, at the end of it, he says, I cried. So it had an emotional attachment as well, which a lot of escapism doesn't have.
- [35:52]
Zing Singh
So Peter Jackson soon started making films with his family's Super 8 camera. Which is a type of movie camera. Very popular in the 60s and 70s. But shot an 8 millimeter film. And it was kind of cheap for home use too.
- [36:03]
Simon Jack
Yeah. And so he was very ingenious about how he did his sets. He actually apparently dug up the garden to film World War I trenches. Or use his mother's fur coat to recreate King Kong. The effects have come a long way since then.
- [36:16]
Zing Singh
Sometimes I think a fur coat would do a lot better. Than some of the CGI effects that you see. Some of them can be quite shoddy these days. But he also soon started creating his own homemade special effects. So on one occasion he actually got his primary school teacher filmed him walking around the corner. And then cut to a firework explosion. To create this impression. Impression of blowing him up. And he screened the film for his classmates.
- [36:36]
Simon Jack
Yeah, he charged 20 cents for tickets. The film cost $12 to make. That cost for the four $3 film reels. That's New Zealand dollars, by the way, at that time. Worth just a bit less than US dollars. And he made that $12 back. So he broke even on his first movie.
- [36:50]
Zing Singh
That schoolteacher, on the other hand, only found out he'd been blown up at the screening. Peter Jackson actually said of his school days, because I was an only child. I tried to get good marks. So my parents would be proud. But I certainly wasn't studying towards a career as such. Because I knew I wanted to make. He actually left school because he wanted to make movies so badly. And knew that in order to get a decent camera, he had to get a job.
- [37:12]
Simon Jack
So he took a job as an apprentice photo engraver at Wellington's daily newspaper. And he says he only took the job because it had the word film in the job description.
- [37:21]
Zing Singh
So clearly an obsessive from a very, very early age. He actually lived with his parents and used all his wages to make films.
- [37:28]
Simon Jack
In 1981, 20 years old at this point, he started work on a short film called Roast. Which morphed into his first feature film, Bad Tast. Filmed at weekends over four years around his friends. Saturday Football matches. It was a gross out horror comedy about aliens harvesting New Zealanders for an intergalactic restaurant.
- [37:48]
Zing Singh
I mean, he is creative, you have to give him that.
- [37:50]
Simon Jack
Yeah. The budget for this film was around 25,000 New Zealand dollars, a bit less than 25,000 US. So he was creating the props himself, he was baking latex masks in his mum's oven.
- [38:01]
Zing Singh
And crucially, he was even building his own equipment, including a version of Steadicam, which is a piece of camera kit that holds kind of camera steady, essentially. It would have cost more than the entire budget if he bought it himself, but he just copied it and built it for $20. So clearly very tech savvy in his own way.
- [38:19]
Simon Jack
Right. This is where New Zealand becomes a character in a way. Because in 1978, New Zealand had offered to be a tax shelter for feature film investors. It was a loophole closed by 1982. The government worried it was being abused, but it had kick started a new kind of cinematic era in that country. And he was right at the sort of vanguard of that.
- [38:39]
Zing Singh
Now at the beginning, the New Zealand Film Commission actually turned down Jackson's request for funding. But then in 84, the new executive director, a man called Jim Booth, saw that Jackson had huge amounts of potential and the debut film he was working on got given 207,000 New Zealand dollars towards finishing the film.
- [38:57]
Simon Jack
The final budget for the film was 300,000 New Zealand dollars. The New Zealand dollars fluctuates a lot against the US dollars at that time. That was about $150,000. So tiny even back then, in the early years, early 80s.
- [39:10]
Zing Singh
But Jim Booth had been absolutely convinced and sold on Jackson's vision. In fact, he was actually so excited that he quit his job at the New Zealand Film Commission to become the producer on Jackson's knicksfield films.
- [39:22]
Simon Jack
Yeah. So Bad Taste, let's talk about that film. It was eventually released in 1987, Bad Taste by name. Bad Taste, I think is probably a pretty apt description because quite a lot of people were put off by the gore. Became a bit of a cult classic. Sick, though.
- [39:35]
Zing Singh
Yeah, it did. And you know, this is the boom time for kind of gory horror cult classics. And it actually went into profit after international sales. Did well at the Cannes Film Festival. So this is an event in France, very, very lovey dovey. A lot of deals get done in the film industry there. When we did George Lucas's Episode, that's where he went to find funding very early on in his career.
- [39:55]
Simon Jack
Yeah. And even if you've made a Film, you go there to find someone to buy it, to distribute it, whatever. It's a real market, international marketplace of films.
- [40:02]
Zing Singh
So.
- [40:02]
Simon Jack
So he managed to sell it. Jackson was finally able to quit his day job and make films full time.
- [40:08]
Zing Singh
And it was during this very period that Jackson met a writer and a producer called Fran Walsh. And she would become his most significant collaborator. She's actually co written all his films after Bad Taste, including Lord of the Rings. And she also became his wife and the mother of his two children.
- [40:24]
Simon Jack
They married in 1987 and unusually for some of our billionaires, they are still together.
- [40:29]
Zing Singh
They're quite the dynamic duo.
- [40:31]
Simon Jack
Yeah. So the first two films, films as a partnership, remained in a similar vein, sort of black comedy horror. As the debut film, he had something called Meet the Feebles, which was a puppet film full of violent sex and drugs, you know, as you do with puppets. And then he followed that up with Brain Dead, a gory zombie horror. So he's definitely a genre director at the moment.
- [40:51]
Zing Singh
Yeah. But then along comes his fourth film, one called Heavenly Creatures, which stars a very young Kate Winslet.
- [40:56]
Simon Jack
Massive change of gear here because this is a very different film.
- [41:00]
Zing Singh
So it's a true crime story. So it's based on something that happened in 1954, about two 15 year old girls who killed one of their mothers in New Zealand.
- [41:08]
Simon Jack
Yeah. But before he was ready to create the film, something very significant happened and probably the reason that he's on our list. Although he'd loved crafting effects by hand, he even described himself as a technophobe. Jackson now wanted to go digital and there was a reason for that, because something big had happened.
- [41:26]
Zing Singh
Something big, something prehistoric. It was a film called Jurassic park.
- [41:32]
Simon Jack
We all know that one.
- [41:33]
Zing Singh
So to set the context, it's 1993, Jurassic park has come out, it's done gangbusters at the box office and Peter Jackson said, I really thought I was seeing a living, breathing T Rex. I thought, my God, whatever the future of visual effects is, it's now got to be computers.
- [41:48]
Simon Jack
So he formed this special effects company, Weta Digital, with his film editor on Brain Dead and Meet the Feebles, a guy called Jamie Selkirk and Richard Tate, who already ran Weta Workshop, the company that made the props and puppets for both of those films.
- [42:02]
Zing Singh
Now, if you're actually wondering what Weta is spelt W E T A. So not Weta as in more wet. Yeah, Wetter. Weta is actually named for a New Zealand insect which is one of the world's largest and used to feature on Their logo.
- [42:17]
Simon Jack
So they bought a big expensive computer, something called Silicon Graphics, which was the last word in graphics computers in those days that cost them about US$8,000. And enlist amateur George Port to master it. And gave him two page of instructions and said, figure out how it works.
- [42:32]
Zing Singh
Port then spent seven months working on his own to create 14 effect scenes for Heavenly Creatures. If you haven't seen Heavenly Creatures there, these incredible sequences where the New Zealand landscapes morphs into these ideas from the characters. Overactive imaginations because they're teenage girls and they're slightly murderous. It's very fun.
- [42:51]
Simon Jack
And unlike bad taste and brain dead, Heavenly Creatures actually made Hollywood start to notice him. Heavenly Creatures was released to critical acclaim. Jackson and Walsh were even nominated for the Best Original Screenplay Oscar. They actually lost out to Quentin Tarantino for Pulp Fiction.
- [43:08]
Zing Singh
Well, I mean, it's not a bad script to lose out to. Even though Heavenly Creatures didn't make huge profits, it had an estimated budget of US$5 million and earned approximately $5.4 million at the box office. So, you know, they've made their money back and then some. But more importantly, the impressive special effects gave Jackson a lot of respect and established Weta.
- [43:30]
Simon Jack
And that led to big US studio Universal funding his next film, the Frighteners, which was a ghost story starring Hollywood star Michael J. Fox, who you may know from Back to the Future or Teen Wolf or a bunch of films from that era.
- [43:42]
Zing Singh
That film just about broke even at the box office. But There were also 540 special effects used. So Weta Digital ended up taking a quite significant portion of the roughly 30 million US dollar budget. And that allowed them to massively escalate their oper.
- [43:58]
Simon Jack
That's very interesting. So despite the fact that the the film just broke even, quite a lot of the budget was spelled spent on the company that Jackson owns. So he would have been making money even if the film didn't make money. I think that's a really important point to make in the sort of financial story here.
- [44:13]
Zing Singh
So they'd gone from being one man with a computer to 35 computers and a team of 50 people. They wrote new CGI software. They purchased an entire warehouse to use at their soundstage. They even started roping in Kiwi Locos, which will become a bit of an ongoing theme.
- [44:29]
Simon Jack
Yeah, I think just about who was a citizen of New Zealand was somehow involved in the Lord of the Rings, which we'll get to in a bit. But this is really the moment when you can see that Peter Jackson is creating a business, something that on the one hand, that aids the creation of films, on the other, starts earning him a significant slice from the budgets. And, you know, presumably any profits the film makes is on top of that. This, I think, is where we see the seeds of his fortune.
- [44:52]
Zing Singh
And Weta wasn't just, you know, providing the special effects, they were building them from scratch. Jackson said, we had a New Zealand guy who'd built a motion control camera, a homemade thing he put together in his garage with all sorts of motors and wheels and cogs attached to it. It worked incredibly well. So, you know, it's not just a production studio, it's a kind of home of innovation, really.
- [45:12]
Simon Jack
Yeah. Even the seasoned veterans from Hollywood were very impressed with the skills of Jackson's New Zealand crews. A senior crew member they hired from George Lucas's effects house, Industrial Light and Magic, noted that New Zealand's were better than those from LA because they had worked for smaller budgets. So they had to do a more complicated range of tasks, had a greater range of skills than the people they brought in from Industrial Mag when they had to rush to a deadline.
- [45:36]
Zing Singh
And also, very importantly, they were also being paid a lot less than the Americans. So all that meant that they were able to produce CGI shots for significantly less, for around US$17,000 each, which was about a quarter of the prices that Jackson was being quoted by American houses.
- [45:53]
Simon Jack
So Weta looked like it was value for money. It began attracting other films looking to do CGI well on a budget. For example, I love this film. Contact the J.D. foster Film Sci Fi Film in 1997.
- [46:05]
Zing Singh
Oh, I remember that. Special effects still look amazing.
- [46:08]
Simon Jack
Yeah. So by the late 1990s, Jackson established himself as a reliable filmmaker who's created his own studio system effectively outside Hollywood.
- [46:17]
Zing Singh
Michael J. Fox, who remember, starred in the Frighteners, said, Peter has created everything you can get in Hollywood in New Zealand. Everything technical. Otherwise it's a different world, a much nicer world.
- [46:27]
Simon Jack
Yeah. He himself is an unusual figure. 5 foot 6 inches tall. It's not that small. Well, it's not Hobbit. It's definitely not Hobbit sized, but bearded, known for going barefoot. He's standing more Hobbit like as we go on. He dressed more like a fan than a filmmaker. Said in the 1990s, one US producer.
- [46:47]
Zing Singh
Actually said he personifies the New Zealand culture. Humble, friendly and full of can do ingenuity in many ways quite Hobbit like characteristics.
- [46:55]
Simon Jack
Yeah. And talking of the Lord of the rings, Sir Ian McKellen, who famously played Gandalf, he said about Peter Jackson, some directors are authoritarian, ordering. That's not Peter. He knows what he wants, but he does it in a gentle way. If he says it's perfect, you utterly know you can move on.
- [47:10]
Zing Singh
But still, we've yet to get to Lord of the Rings, so let's talk about the journey to Mordor, Weta, the successes with Heavenly Creatures and Frighteners. All of this helped Jackson get his dream job at the end of the 90s, which is directing a remake of King Kong.
- [47:25]
Simon Jack
And he even started production in New Zealand. But the backers, Universal, heard that there was another guerrilla film out there, the Mighty Joe Young. So they paused the production. There's not room in releases for two. For two big, big ape movies?
- [47:39]
Zing Singh
No, Only one allowed at a time. So Jackson and his partner, Fran Walsh, needed a new project, and they needed it quickly. So they'd been already trying to write a fantasy film, but they kept referring back to Tolkien's Lord of the Rings books for inspiration. And finally they felt, you know, we all. We keep referring to this book, so we might as well just acquire the rights and adapt it.
- [47:58]
Simon Jack
Yeah. Not straightforward, though. It's been around for many, many years. And there were attempts to make a kind of animated version many years before. Jackson had been a fan of the book since reading him as a teenager. His grandfather had actually fought alongside J.R.R. tolkien in World War I. So he decided if he couldn't make King Kong, Lord of the Rings would be a close second. So he asked producer Harvey Weinstein for help. Now there's a name.
- [48:20]
Zing Singh
So Weinstein is now obviously a disgraced producer. He's in prison, having been prosecuted as a sex offender following the revelations around MeToo. But in the late 90s, when Peter Jackson approached him, he was riding high. He was one of the kings of Hollywood.
- [48:34]
Simon Jack
Yes, One of the most powerful people in Hollywood. He also had a deal with Jackson that he would get first look at any new projects after his company, Miramax, had distributed Heavenly Creatures.
- [48:44]
Zing Singh
So Weinstein called in a favor from a legendary film producer called Soul Zaans, who held the rights to Lord of the Rings and offered Jackson a deal to turn the three books into two films.
- [48:55]
Simon Jack
Yeah. So Jackson and Walsh spent 18 months researching and preparing for filming. Jackson bought an old paint factory for an estimated $2 million to turn into a soundstage even before the film was created.
- [49:06]
Zing Singh
But this deal completely fell apart. Weinstein decided it should just be one film, effectively halving their screenplay, and Jackson simply turned around and said, no.
- [49:15]
Simon Jack
Yeah. Have you seen the size of the books? And I don't know if you read them when you were a kid. I did. They're big, big wedges of books. The idea of getting three of them as a trilogy into one film, you're going to lose quite a lot of the nuance and the detail.
- [49:28]
Zing Singh
So Weinstein had already spent $10 million on the project, but he agreed that Jackson and Walsh could have three weeks to find a new studio before he booted them off the project completely and found a new director. So very much the time was ticking.
- [49:41]
Simon Jack
This is one of those incredible junctures we come across in some of our, in our billionaires where there's a small window of time, a little opportunity and you either make it or you don't. But remember, you know, the budget for this going to be a fex laden fantasy thing. It would be huge budget, three or four times anything Jackson had made before. So it was a risky venture, it wasn't going to be a guaranteed success. So three weeks to raise the budget was going to be incredibly difficult.
- [50:07]
Zing Singh
In the first week they decided to use it to make a 36 minute documentary about how they would make the film. So quite meta. So they had CGI animatronics examples. And then in a second week they flew to LA for all these meetings to show off this documentary and to try and convince people to give them the money. And they rated their chances of succeeding as about 50.
- [50:29]
Simon Jack
In a way, it's like any other way of trying to raise money for a business. You come up with a kind of PowerPoint presentation or a pitch deck. They just made a short film about how they're going to go about it and it paid off.
- [50:38]
Zing Singh
Luckily, Jackson had an in with a company called New Line Cinema. So in 1990 they hired him to write a script for a possible sixth installment of Nightmare on Elm street, which is a hugely famous horror franchise.
- [50:51]
Simon Jack
Yeah, the New Line producer, Mark Gordetsky had asked Jackson to do this because he was a big fan of bad taste, which, which is helpful.
- [50:58]
Zing Singh
And while that script was never made, Ordesky and Jackson had become friends after Jackson slept on his couch while writing it in la. Now this was a very different proposition to Nightmare on Elm Street. So this would be a huge investment for New Line, but they saw that there was a very small window of opportunity to acquire the rights to these books. So they just went for it with Audeschi on board as a producer.
- [51:19]
Simon Jack
Yeah, in a way it's a bit like, you know, you've got three weeks to try and for example, to get the Rights to the Marvel comic universe. It's one of those things which is basically such a valuable, well known property. Oh yeah, we got the intellectual property. This could be our last ever chance to get it. So they took a gamble and went for it.
- [51:36]
Zing Singh
Bob Shea, who was the boss of New Line, said at the time, we still see a good risk to reward scenario. Having seen Peter's script and demonstration reel, we believe he has the ideas and very important, the technology to make this a quantum leap over the fantasy tales of 10 or 15 years ago.
- [51:52]
Simon Jack
Yeah. Much to Jackson's surprise and delight. Nature doubt. New Line suggested they make not two films, but three.
- [51:59]
Zing Singh
Jackson then suggested making all three films at the same time to save money. Really pushing his luck here. Yeah, but this was a huge risk for the studio. Jackson was, you know, critical success, special effects pioneer, but he had yet to actually have a box office hit. So if the first film was a flop, the other two films would kind of be languishing.
- [52:19]
Simon Jack
You can see the rationale economically of doing all three films at one time. You, you don't want to get everyone out and then bring them all back, back and forth to New Zealand. Plus, with something like a trilogy like this, who knows whether the person who played this dwarf or that elf or Gandalf or whatever might be busy the next time you want to do the thing. So whilst you've got them. But it meant that they had to raise, well, nearly $300 million. New Line put in 130 million. That was the studio's most expensive project ever.
- [52:49]
Zing Singh
So finally, in 1998, New Line announces a deal with Peter Jackson to make the three films. With his stake in Weta Digital, plus fees for writing and directing previous films and a percentage of the small profits those films had made, Jackson may already at this point have been a millionaire.
- [53:05]
Simon Jack
Weta remained a private company. So the ownership model and the shareholdings is a little bit opaque. And his exact deals for his earlier films are also uncertain. But the Lord of the Rings deal was definitely huge. He was reportedly given a $10 million upfront fee for each of the three films, along with 10% of the profit. So I think we can say for sure, sure that in 1998, the Lord of the Rings deal made Peter Jackson a millionaire.
- [53:27]
Zing Singh
So Peter Jackson is officially a millionaire, but going from a million to a billion is a lot of zeros. And you know, one does not simply walk into the billionaire ranks in same way one does not simply walk into Mordor. So how does he actually get to a billion? So at this Point Jackson may have been a millionaire, but there's no guarantee that the Lord of the Rings would be a success.
- [53:53]
Simon Jack
Even when the production started in 1999, all three films weren't certain to be completed because Jackson in the studio still had to raise the rest of the 280 million budget required to complete these really epic films.
- [54:07]
Zing Singh
So the reason why that happens is because movies, especially the big budget type that Jackson makes, are really expensive. So it takes money from a lot of different sources to pay for them. You can't just expect someone like New Line to pony up the cash because we're talking millions and millions.
- [54:21]
Simon Jack
It's a bit like having a portfolio of investments if you're a studio. There's a reason why when you see a big feature film, there seems to be the logos of countless different studios.
- [54:30]
Zing Singh
And the credit scenes go on and on.
- [54:32]
Simon Jack
New Line, for example, needed 25 distributors to give a total of $160 million in advance, and they had to commit to distributing all three films. And if the films weren't hit, this could have resulted in financial disaster for some of them. So New Line organized a TR for the distributors and US cinema reps to New Zealand's capital, Wellington, to meet the cast, watch 30 minutes of the footage and see Jackson at work in this in his mini Hollywood studio.
- [54:58]
Zing Singh
I would love to be on that plane.
- [55:00]
Simon Jack
Wouldn't that be great? Anyway, that trip worked and the money was promised. But production in New Zealand is still. It's still a nascent market, still offered some big challenges.
- [55:09]
Zing Singh
Of course, one of the things about Lord of the Rings are the settings. And New Zealand became this place where you could get any location you wanted. You want craggy mountain range done, you want a beach done. But the unpredictable weather meant that there were floods washing away sets, actors were stranded, Snow could shut down filming.
- [55:27]
Simon Jack
So Jackson spent 274 shooting days, that is a lot initially, and then another pickup shoot, taking the total to 435 shooting days with the crew working six days a week. So a real marathon effort, this.
- [55:42]
Zing Singh
And actually, for some of the 40 filming locations, they actually had to build the road themselves to take the sets and actors to somewhere and then they had to dig them back up again to preserve the land landscape.
- [55:52]
Simon Jack
That's amazing. Also, the size of this project, though, had given a bit of heft to Peter Jackson's elbow in securing some hefty tax breaks to take the entire production to New Zealand. Because although the country had felt it had been burnt by tax breaks and they'd been abused Jackson and Fran Walsh were instrumental in convincing the government then to offer new tax breaks up to 20% for film productions.
- [56:15]
Zing Singh
So this was a gamble for New Zealand, and it massively paid off because Lord of the Rings kickstarted the nation's film industry in a huge way. And by 2023, it was generating about US$2 billion in GDP annually.
- [56:29]
Simon Jack
And Lord of the Rings itself contributed massively. The three films were worked on for five years. They had a production team of over 2,400 and get this, 26,000 extras.
- [56:40]
Zing Singh
Everything Peter Jackson needed was actually made in New Zealand. And he actually called it the world's largest home movie in the sense that everyone in New Zealand worked on it.
- [56:49]
Simon Jack
And it was a atmosphere. Everyone felt they had some sort of stake in it. People were very proud of the franchise when I was there in the early 2000s. So once the films were made, the final challenge was marketing them. New Line's research showed that only 20% of audiences knew anything about the 50 year old books.
- [57:07]
Zing Singh
Neuline focused their advertising push online. So the Internet's still a relatively new endeavor. But Neoline's sister company, Warner Brothers, had a big deal with aol, who was a major player in those days, and they were able to create an online Buzz with their 24 million users on the network.
- [57:24]
Simon Jack
Yeah, and so the first film received rave reviews. It grossed $868 million at the box office in 2001. The trilogy as a whole went on to gross $3 billion and its final budget had been 281 million. So I figure that roughly, it made the box office 10 times what it.
- [57:44]
Zing Singh
Cost to make that big gamble really did pay off. And also critically, as. Because the films actually got a total of 30 Oscar nominations and it won 17 of them, including Weta's visual effects for each film.
- [57:57]
Simon Jack
Yeah. Can I be a heretic here and say, actually, I don't think the first two films are all that good.
- [58:02]
Zing Singh
So, I mean, it's hard for me to judge because in the same way you probably can't objectively judge a Star wars franchise. Being a fan, I grew up with Lord of the Rings. And I mean, if you go up to a millennial woman of any age and you ask her, are you an Aragon girl or Legolas girl? Okay, that's.
- [58:18]
Simon Jack
That's Orlando Bloom versus Viggo Mortensen.
- [58:20]
Zing Singh
That's Orlando Bloom versus Viggo Mortensen. You know, it penetrated pop. It penetrated pop culture in a way that I think very few fantasy films do.
- [58:29]
Simon Jack
Okay, so I gotta ask you that question.
- [58:31]
Zing Singh
Well, okay, my theory is that when you're a teenage girl, which is when I watch the films, you are 100, a legless girl. And as you get older and you start seeing the value of a, you know, a grown man who can run a kingdom in save the world. It's Aragon. It's gotta be Aragon.
- [58:46]
Simon Jack
This is fascinating. Okay, well, anyway, the critics liked it. In fact, Return of the King, which for my money was the best of the three films, won 11 Academy Awards, which is a record with Ben Hur and Titanic, amazingly including some big ones for Jackson himself. Best picture, Best Director, Best Adapted Screenplay.
- [59:06]
Zing Singh
So he's officially an Oscar winner several times over, which is a very big deal for a filmmaker. So the Lord of the Rings franchise made Jackson the hottest, most in demand director on the planet. And that meant the return of a dream project for him, King Kong.
- [59:23]
Simon Jack
Yeah, so he signed a deal with Universal to write, direct and produce King Kong with an upfront fee for him of $20 million. That remains, we think, a world record for the highest fee paid to a director in pre production before the film's even been made.
- [59:38]
Zing Singh
So the budget ended up at about an estimated $207 million. But unfortunately for Peter Jackson and Universal, it was a flop.
- [59:48]
Simon Jack
Yeah, 50 million in its opening weekend, which is considered pretty poor when you've spent that kind of money. But ultimately, these things have a long tail, particularly these days in streaming. And, well, of a, you know, you keep on earning money because people can go back to it. Ultimately, it made $562 million worldwide. So was long term a success, just not the kind of Lauderdale of the Rings kind of knockout.
- [60:09]
Zing Singh
But luckily for Peter Jackson, the Lord of the Rings continued success was making him a very rich man.
- [60:15]
Simon Jack
But he's not as rich as he thought he should have been. Peter Jackson reportedly made $200 million from the trilogy by 2005. But remember, this is a trilogy that grossed over 3 billion. And at this point, we need to have a quick look at how the economics, the profit sharing in Hollywood works.
- [60:33]
Zing Singh
So in Hollywood, Hollywood, something like 10% of the profits. These are what are known as points. And sometimes, as with George Lucas on Star wars, someone might get points on the gross or total made in ticket sales, but Jackson only had points on the profits.
- [60:47]
Simon Jack
So, yeah, that's the difference between the gross money you're making at the box office and the net. So when you take out all the other costs, what's left over? Although we note, as we say, it made $3 billion at the box Office and it had a budget under 300 million million. You've got to take out an awful lot of stuff. For example, there's the marketing spend which is normally huge because it to promote the film. There's the distribution, what you pay the distributors. There's the money the cinemas make from the films which is normally 50% of the box office. Loads of other costs. So some massive films which seem to make big money at the box office actually on paper, make a loss after you've taken away all those expenses.
- [61:25]
Zing Singh
Still, there are other ways a film can make profits which Jackson also would have been entitled to. So. Such as, you know, because this is the early 2000s, we're talking about DVD sales or, you know, nowadays what we call streaming rights. But you know, however he sliced the pie in 2005, Jackson thought he'd been underpaid to the sum of about $100 million by new line.
- [61:46]
Simon Jack
Yeah. So he filed a lawsuit. The case was eventually settled. New Line paid Jackson undisclosed settlement, but reports say it was estimated to be over $100 million. So after that settlement, Jackson was probably worth about $350 million. Still not there yet? Only a third of the way, still.
- [62:03]
Zing Singh
Mr. Kiwi, nice guy. Clearly has a bit of a backbone in him.
- [62:06]
Simon Jack
Well, isn't it funny? It's all lovey dovey until it comes to splitting up the money.
- [62:09]
Zing Singh
I will say, however, that Peter Jackson wasn't spending it on flashy cars or super yachts. He was actually spending it on, you know, what is now called Wellywood, which is Wellington, New Zealand's answer to Hollywood.
- [62:20]
Simon Jack
Yeah. In 2007 he bought new Zealand's formerly stated National Film Unit. That was a production house, making news, documentaries, processing films and he relaunched it as a state of the art post production house. It's where you sort of, you know, do all the bits to films after you've done the initial filming.
- [62:36]
Zing Singh
He actually said, it's been about 16 years since I put my first film into the film unit to be developed. So I've had a long association with it. It's like an old friend.
- [62:44]
Simon Jack
Yeah. So he bought a new soundstage, special effects workshops at the editing suite. He spent more than $50 million on it.
- [62:50]
Zing Singh
And whether people would use the facilities to make films or not, Jackson was quite chilled out about it. He said, I'd rather have the money parked in a facility that a lot of people can use than have it sit in the bank. I value being a New Zealander who is able to make films in his own country. So we've had to spend our own money to increase the infrastructure. So he really is kind of like a swingali of the New Zealand film industry.
- [63:12]
Simon Jack
Definitely. He's continued to have success after Lord of the Rings. He had some beef with New Line, as we just heard. And the New Line boss, Bob Shea, said he would never work with Peter Jackson again and wanted to make the Hobbit films with someone else, but was told by his bosses, fix your Peter Jackson problem.
- [63:28]
Zing Singh
Fix your 5 foot 6 barefoot filmmaker problem.
- [63:30]
Simon Jack
Yeah, it would have been quite weird for somebody else to try and take that on.
- [63:35]
Zing Singh
Yeah, I mean, that would have been a poison chalice for sure. In any case, Bob Shea was eventually ousted and Jackson ended up directing the Hobbit films. Obviously the Hobbit films, in my opinion, nowhere near as good as Lord of the Rings, but still made a lot of money.
- [63:48]
Simon Jack
But there was controversy over Warner Brothers persuading the New Zealand government to pass a law curbing the unions and giving the production another 25 million in incentives on top of a 15% tax break. They've got a feeling here that the movie industry is the tail wagging the government dog here. And I think a lot of people saying, hang on a second, enough's enough.
- [64:07]
Zing Singh
And actually, documents that were released later revealed revealed emails from Jackson saying that he was not, quote, anti union, but also describing a union organizer as a snake and referring to the unionization effort as toxic nonsense.
- [64:21]
Simon Jack
Yeah. Anyway, the Hobbit Trilogy costs $754 million. Amazing that it costs more than Lord of the Rings.
- [64:28]
Zing Singh
I know. Strange, because some of the special effects don't seem to hold up as well as the Lord of the Rings ones.
- [64:33]
Simon Jack
I agree. But anyway, it also grossed $3 billion. So what do I know? And what do we know? People still went to watch it. And it's thought that Jackson made $20 million per film plus 20% of the profits after the studios took their fees. So 20% of the net.
- [64:47]
Zing Singh
So even though it made billions at the box office, the films were not the same critical hits as the earlier trilogy. But his 2018 World War I documentary, they Shall Not Grow Old, was much loved by critics, as was his Beatles documentary for Disney.
- [65:00]
Simon Jack
Get Back loved that Get Back documentary. Gripped by it. But listen, this is called Good Bad Billionaire, this program. So we need to figure out how he got to a billion. So far we've only got him $350 million. And let's go back to what we were talking about before. The company he set up way back when, Weta Digital, it was that Made him a billionaire.
- [65:21]
Zing Singh
Now, before Lord of the Rings, Weta had really struggled to get visual effects staff to join them in New Zealand. Understandably, it's quite a big move for someone, especially if you're used to working in la.
- [65:31]
Simon Jack
So the co founder of the company, Richard Taylor, said, I flew to the States and handed out flyers asking if anyone was interested in joining us in New Zealand. We got one person. Then after the first Lord of the Rings movie had come out, we were getting up to 40 applications a week. So people were eager now to join Jackson's company.
- [65:47]
Zing Singh
And after Lord of the Rings picked up so many Oscars, Weta also ended up working on one to two films that were massive every year in the 2000s, including I, Robot X Men, First Class, Chronicles of Narnia. And then they got another Oscar, this time for the visual effects on Avatar in 2010. Another. Another huge film.
- [66:06]
Simon Jack
That was a massive thing that. In fact Avatar, I mean the special effects was the movie, right? It was all about that.
- [66:12]
Zing Singh
People went to see how they did the aliens.
- [66:15]
Simon Jack
Yeah, exactly. And what's interesting is that James Cameron, who is the director of Titanic and Avatar, he's not on our list of billionaires, but the person who did the visual effects is.
- [66:22]
Zing Singh
Yeah, I mean, it just goes to show that whatever way you slice it, tech will always end up edging entertainment as being the way to make your billions. Now, it's hard to say what fee he personally received for each film that Metadigital was works on, but when you look at it one way, Avatar's production costs were $230 million, a lot of which, as we said, were spent on effects.
- [66:43]
Simon Jack
Yeah, and Weta is quite an outfit. Now they've got 900 staff on Avatar alone, they required 40,000 computer servers. So this is a huge expense and shows how visual effects are becoming a big part of where filmmakers were spending their ever increasing budgets. And he was right in the right place for that.
- [67:02]
Zing Singh
And actually by 2023, Wetter had worked on over 150 films. It's got 7,000 people working on an average of six films a year. It is quite the factory.
- [67:11]
Simon Jack
And this is what really made him a billionaire. Through a pretty peculiar deal In November of 2021, Weta Digital sold a portion of its business to something called Unity Software, which was a US based video game. They paid $1.6 billion for the VFX tools development division of Weta Digital, obviously.
- [67:30]
Zing Singh
Because video games depend quite a lot on visual effects. So this means the company was now split. Unity had the tech assets like Weta Digital, with the visual effects company renamed as Weta fx, with Jackson having the majority ownership.
- [67:44]
Simon Jack
But Forbes, who compile a list and rank billionaires every year, estimated that Jackson made $600 million in cash and 375 million in shares from the deal. So that's 975 million total, given the fact he's already worth 350 in 2021. Peter Jackson is a billionaire.
- [68:16]
Zing Singh
So that is how Peter Jackson became a billionaire. I'll be back soon with brand new episodes.
- [68:21]
Simon Jack
I'll be back too. There's a little hint of someone we might be hearing from in the future.
- [68:25]
Zing Singh
Yeah, well, we'll both be back with yet more cinematic stories. Plus billionaires from industries like oil, shipping, online retail, technology, airlines, fashion, steel, pharmaceuticals, maybe even electric cars. If you want to get in touch to suggest a billionaire for us to cover or tell us what you think of them, you can email us at goodbadbillionairebc.com or drop us a WhatsApp to 001-917-686-1176 that's good.
- [68:50]
Simon Jack
Bad billionaire, all one wordbc.com or 001-917-6686-1176 We've loved getting your messages and some of the billionaires you've suggested will be popping up in our new season. Make sure you follow or subscribe wherever you're listening to this so you get those episodes as soon as they drop.
- [69:10]
Zing Singh
Good Bad Billionaire is a BBC Studios production for the BBC World Service. It was produced by Hannah Hufford and Mark Ward and the editors were James Cook and Paul Smith. For the BBC World Service, the Commissioning editor was John Manelle. This is the story of the One as head of maintenance at a concert hall, he knows the show must always go on. That's why he works behind the scenes, ensuring every light is working, the H Vac is humming, and his facility shines with Grainger's supplies and solutions for every challenge he faces. Plus 24. 7 customer support. His venue never misses a beat. Call quickgranger.com or just stop by Granger for the ones who get it done.