Lucasfilm Ltd.

FOUNDED: 1971

Contact Information:

HEADQUARTERS: 5858 Lucas Valley Rd.
Nicasio, CA 94946
PHONE: (415)662-1800
FAX: (415)662-2437
URL: http://www.lucasfilm.com

OVERVIEW

George Lucas is the visionary behind the phenomenally successful Star Wars saga and the epic adventure Indiana Jones films. Lucas is one of the most influential filmmakers of the twentieth century, transforming the way movies are made, marketed and experienced by audiences. With five of the top 20 grossing films of all time, Lucasfilm is one of the most powerful and influential independent movie empires in all of filmdom. One of the six companies owned by filmmaker George Lucas, Lucasfilm's productions have struck Academy Awards gold 17 times.

The installment in the Star Wars saga, Star Wars: Episode I—The Phantom Menace, released in May 1999, topped the box office at $920 million, finishing number two behind Titanic.

Through Lucasfilm, created in 1971, commander Lucas handles all of the business affairs in his empire. Lucasfilm is a self-contained multimedia production enterprise that along with its subsidiaries runs completely independent of Hollywood influence.

In addition, Lucas has developed computer software for use in classrooms, and has put his name and fame behind many less successful filmmakers over the past two decades.

COMPANY FINANCES

Lucasfilm Ltd., a private company, estimated 2001 sales of __BODY__.5 billion, including sales from international business, up 36.4 percent from the previous year. Thanks to Lucas' strong self-belief, his deal with Twentieth Century Fox to finance Star Wars made him extremely wealthy. The studio originally offered Lucas a flat fee for writing and directing the film, anticipating he would ask for a higher salary. Instead, he asked only for sequel rights and full ancillary rights, giving him a large portion of the profits from sale of toys, games, soundtrack albums, posters, costumes, and any product bearing the Star Wars name.

Profits from Star Wars memorabilia, books and comics, estimated at $2.6 billion worldwide by 1991, allowed Lucas to fully finance subsequent films and retain a higher portion of film profits. Additionally, Lucas expanded the company's reach into postproduction facilities and multimedia research. With a third Star Wars prequel slated and Spielberg's agreement to direct the fourth Indiana Jones film, Lucasfilm seems poised for continued intergalactic good fortunes.

HISTORY

Lucasfilm Ltd. is a motion picture, television and distribution company created by celebrated filmmaker George Lucas. Company founder Lucas was born in 1945 in Modesto, California and attended the University of Southern California's film school. Lucas won a scholarship to observe Francis Ford Coppola direct the film Finian's Rainbow, which had a profound effect on the young filmmaker. In 1970 Coppola produced Lucas' sophomore film effort, the futuristic THX 1138. The following year, Lucas created his own film company, Lucasfilm Ltd., in Hollywood across from Universal Studios. In 1973, Lucas got his first taste of commercial success with the movie American Graffiti, a comedic look at a night in the lives of high school graduates in the 1960s, which he co-wrote and directed. The film netted five Academy Award nods, a Golden Globe award, and awards from the New York Film Critics and National Society of Film Critics.

Lucas became well known in Hollywood and began company expansion. For example, he founded Skywalker Sound, a full service audio and post production facility. He also set up Industrial Light and Magic (ILM), now the world's foremost visual effects production facility, to develop spectacular effects for his upcoming science fiction Star Wars epics.

Lucas wrote and directed the first Star Wars movie in 1977 for Twentieth Century Fox, at a cost of $6.5 million. Star Wars became a number one box-office smash, and an important part of American culture and film history. Over the next six years, Lucas wrote and produced the Star Wars sequels The Empire Strikes Back (1980) and Return of the Jedi (1983).

As Lucasfilm continued to profit, Lucas began to distance himself from Hollywood, and moved his offices to Skywalker Ranch, a secluded 3,000-acre facility in San Rafael, California. Despite his detachment from Hollywood, Lucasfilm continued creating successful films, producing the popular Indiana Jones movies, directed by Lucas colleague Steven Spielberg. Raiders of the Lost Ark (1981), Indiana Jones and the Temple of Doom (1984), and Indiana Jones and the Last Crusade (1989) all achieved wide financial success.

STRATEGY

Lucasfilm is an independent, multimedia company that seeks to develop technology and create film and television projects. Lucasfilm Ltd. oversees the business affairs of each company in the ever-expanding motion picture, television, and distribution empire. The company includes all of George Lucas' feature film and television projects as well as the business activities of the THX Group and Lucas Licensing. Lucasfilm pioneered film-oriented computerized nonlinear electronic editing for picture and sound with the creation of the EditDroid and SoundDroid, which premiered at the National Association of Broadcasters in 1984. Lucas-film recently sold the technology to AVID and has teamed up with them on the next generation of editing equipment. THX is at the forefront of quality film presentation in the exhibition and consumer electronics industry. The Professional THX Sound System is currently in more than 2,500 theaters and mixing stages worldwide.

For quality assurance, Lucasfilm initiated the Theatre Alignment Program (TAP) as a service to film-makers and movie studios. TAP's service has covered over 500 film releases, including many of the top box office films of the past decade. The THX Digital Mastering Program was first created to certify laser discs, but has gone on to include VHS and, most recently, DVD. Lucas Digital Ltd. includes the divisions of Industrial Light & Magic (ILM) and Skywalker Sound, which is committed to servicing the digital needs of the entertainment industry for visual effects and audio postproduction. ILM has created special effects for eight of the top 15 box office hits of all time, winning 14 Academy Awards for Best Visual Effects and 16 Technical Achievement Awards. ILM is at the forefront of the digital revolution, and is the world's largest digital production facility. Skywalker sound has pioneered innovative picture and sound editing technologies and has received ten Academy Awards.

INFLUENCES

Around the year 2000, there were high hopes at Lucasfilm that up to 2,000 screens could be converted to digital projection in time for Star Wars: Episode II— Attack of the Clones. The reality is that there are only 20 digital screens nationwide and little prospect of adding more by the picture's scheduled May 16, 2002 release. In recent years, industry insiders have gone from talking about digital cinema as a possibility to something more of an inevitability. Its not a question of whether some portion of exhibitors will convert to digital, just a question of when.

The actual debut of the technology has been hampered by two main problems. First, there is still no uniform set of engineering standards for digital camera systems; and exhibitors have had other problems, such as a dozen bankruptcy filings amid industry over-expansion. Lucas had hoped that several hundred digital screens would be in place by the time Attack of the Clones premiered. The second Star Wars prequel was shot entirely on digital video. Now the feeling is perhaps several dozen theaters could convert to digital projection by the time Clones premieres, but it is doubtful that anyone will step up to provide the multi-million dollar funding necessary.

Digital productions come along rarely and usually involve computer generated-cartoons such as Dream-Works' Shrek or Disney/Pixar's Monsters, Inc.. Lucas plans a third Star Wars prequel for release in three years. Industry insiders predict Episode III could be distributed entirely in the digital format.

CURRENT TRENDS

George Lucas' long term plans to move his ILM digital f/x house and other digital operations to San Francisco's Presidio are moving ahead. Planning and design of the Letterman Digital Arts Center (LCD) has progressed to the schematic drawing stage and has been submitted to the Presidio Trust for public review. The Presidio Trust released a draft implementation plan and environmental impact statement for the 1,450-acre San Francisco park in July 2001. The draft concentrates new development in the former Army base's northeast corner, near the Palace of Fine Arts and newly restored Crissy Field. The plan limits total structural space to 5.6 million square feet.

In August 2001, the Presidio Trust and Lucasfilm inked an agreement to allow the company to develop a 23-acre office and movie production campus at the site of the abandoned Letterman Military Hospital. The 900,000 square-foot Lucasfilm campus would house about 2,500 workers, which Presidio Trust officials see as the park's financial backbone. The buildings themselves are designed to blend in with the original Spanish-style military structures, in accordance with the Presidio's design rules. The structures would be made of red brick and stucco with pitched red roofs and range from two to four stories high. Lucas' $5 million annual lease payments would assist in the park's plan to achieve economic self-sufficiency by 2013.

"Hopefully," said Lucasfilm President Gordon Radley, "together we'll build a presence so the Presidio not only signifies a geographic location, but can also signify the creative vision of all the people here who are engaged in figuring out the issues of the 21st century."

PRODUCTS

Lucas Learning is an extension of the company's successful multimedia activities. It draws on George Lucas' dedication to technological excellence with the focus on children's educational products for the home and school. LucasLearning's six titles have received worldwide acclaim.

LucasArts is a leading international developer and publisher of interactive entertainment software for computer and home video consoles. The company's games have been honored with over 150 industry awards for excellence and are among the best-selling. Fans long requested a bounty hunter game from LucasArts, and they complied with the "Father of Legendary Bounty Hunter Boba Fett Highlights Action Game" for PlayStation 2. Nintendo GameCube was planned for release in the fall of 2002. And fans will "feel the force" as the Star Wars' Jedi Starfighter for the Xbox video game system is released in May 2002 to coincide with the premiere of Star Wars: Episode II —Attack of the Clones.

Lucas Licensing represents one of the most solid core brands in the entertainment industry. It consists of licensing and merchandising activities of the Star Wars and Indiana Jones films, properties and trademarks. Like intergalactic marauders, Star Wars fans scour the globe for toys and memorabilia, from the newest action figures to vintage, classic toys. For example, while Star Wars fans awaited the latest film, the American International Toy Fair in New York City gave a glimpse of the 2002 product lines of related toys and games from Hasbro, including the release of limited edition collectible "fossil" watches to help fans know just how long it will be until Episode II comes out. And handset maker Nokia and Lucas Licensing have signed a multiple-year deal that will let Nokia distribute Star Wars-themed wireless messages, cell phone logos, and screensavers.

CORPORATE CITIZENSHIP

When Star Wars: Episode I—The Phantom Menace was released in May 1999, it didn't have the usual celebrity premiere in Hollywood. Instead, the film opened in 11 cities as a benefit for local children's charities raising a total of $5.3 million. Then, to celebrate the holiday season, The Phantom Menace was re-released for one week beginning December 3, 1999. One hundred percent of the box office proceeds from the encore charity release were contributed to local charities selected by theater owners. This marked the first time in history that total revenues generated from the exhibition of a film in movie theaters were contributed to charitable causes. Lucasfilm, Twentieth Century Fox, and local theater owners came together in about 358 cities in the U.S. and Canada to benefit 184 different charities. George Lucas commented, "Throughout the years, Star Wars films have entertained generations of children. We are delighted that these premieres will provide an opportunity to benefit the children who need it the most."

In addition to these activities, a Star Wars charity run took place on November 22, 1999, benefiting 360 charities of all types. And in July 1999, starwars.com's official chat provider, Talk City, auctioned off exclusive Star Wars: Episode I—The Phantom Menace theatrical one-sheet posters signed by George Lucas. Those proceeds benefited the Southern California Chapter of the National Multiple Sclerosis Society.

In a repeat performance, Lucasfilm and Twentieth Century Fox announced that Star Wars: Episode II—Attack of the Clones would premiere May 12, 2002 in 11 cities in the U.S. and Canada to benefit children's charities. At each premiere, portions of theater seating will be available to disadvantaged kids.

Lucas is involved in arts and education, serving as chairperson of the George Lucas Educational Foundation as well as on the board of directors of the National Geographic Society Education Foundation, the Artist Rights Foundation, The Joseph Campbell Foundation and The Film Foundation. He is also a member of the USC School of Cinema-Television Board of Councilors.

EMPLOYMENT

Lucasfilm provides eligible employees with an extraordinary workplace as well as an excellent variety of benefits. The company offers two internship sessions annually for students in an undergraduate or graduate degree program. Lucasfilm generally offers positions related to its business affairs, not in film productions. Positions are offered in various business activities including the THX professional and consumer audio systems and the management of its corporate headquarters, Sky-walker Ranch.

In 1994, for the fourth year running, Working Mother magazine named Lucasfilm, Lucas Digital, and LucasArts Entertainment among the top one hundred workplaces for working mothers. The magazine commended the companies' child-care centers, flexible working hours, and profit sharing plans as well as equal treatment in matters of salary. Additionally, the companies subsidized 100 percent of health care costs for employees and 75 percent rates for their families. For these reasons, Lucas companies boast a low turnover rate.

SOURCES OF INFORMATION

Bibliography

Diorio, Carl. "Digital Gurus Can't 'Send In The Clones.'" Brandweek. 25 March 2002.

Hein, Kenneth. "Frito-Lay Supplies Pieces to the Star Wars Puzzle."Brandweek 25 March 2002.

"Lucas, George Walton, Jr."Jones Telecommunications and Multimedia Encyclopedia, 1999. Available at http://www.digitalcentury.com.

"Lucasfilm Ltd." Hoover's Online. Available from http://www.hoovers.com.

Lucasfilm Ltd. Home Page, 2002. Available at http://www.lucas-film.com.

"Lucasfilm Ltd's Star Wars: Episode II - Attack of the Clones Premieres To Benefit Children's Charities in 11 Cities on May 12, 2002." Canadian Corporate News, 27 February 2002.

Pollock, Dale. Skywalking: The Life and Films of George Lucas. New York: Samuel French, 1990.

"The Presidio Trust Released a Draft." California Planning and Development Report, September 2001.

Stein, Todd. "Will the Trust Be with Him?" San Francisco Business Times, 4 August 2000.

For additional industry research:

Investigate companies by their Standard Industrial Classification Codes, also known as SICs. Lucasfilm's primary SICs are:

6794 Patent Owners and Lessors

7372 Prepackaged Software

7812 Motion Picture, Video Tape Production

7819 Services Allied To Motion Pictures

7822 Motion Picture and Video Distribution

7829 Services Allied to Motion Picture Distribution

Also investigate companies by their North American Industry Classification System Codes, also known as NAICS codes. Lucas-film's primary NAICS codes are:

512110 Motion Picture and Video Production

512190 Postproduction and Other Motion Picture and Video Industries

512199 Other Motion Picture and Video Industries