Peter Jackson: Lord of the Films

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Welcome to Good, Bad Billionaire from the BBC World Service.

Every episode, we pick a billionaire and find out how they made their money.

And then we judge them.

Are they good, bad, or just another billionaire?

I'm Simon Jack, and and I'm the BBC's business editor.

And I'm Zing Sing.

I'm a journalist, author, and podcaster.

And this week we have a billionaire who I have to say was a bit of a shock.

Wasn't expecting him to be a billionaire.

It is none other than Kiwi filmmaker Peter Jackson.

So Sir Peter Jackson, to give him his proper honorific, is worth $1.5 billion, which I did not expect, like you say.

Really surprising.

But he's best known, of course, as the director of The Lord of the Rings and the Hobbit films, which have helped him become the fourth highest-grossing film director of all time.

Collectively, his films have made over $6 billion at the box office.

And you know how Star Wars was your film franchise when you were growing up?

I feel like Lord of the Rings was that for me.

Was it?

It really was.

And you know what?

As I was walking into broadcasting house to record this episode, none other than Aragon, as in the actor Vigil Mortensen, who plays him, was outside the book.

No way, get out of here.

I know.

And I was like...

Should have brought it in.

It's the King.

It's the Return of the King.

Return of the King.

He commanded the highest fee ever to direct a film when he reportedly got $20 million to direct King Kong, which was sort of a lifetime goal of his.

But still, it's unusual for directors to get this rich.

Exactly.

I mean, the other person we've had on the show is obviously George Lucas, but, you know, Peter Jackson is relatively new to the billionaire stakes.

He became one in 2021 with the sale of his special effects company, Wetter Digital, when he sold that for $1.6 billion.

Ah, that's the answer to our question.

It was basically the company that he founded.

Wetter Digital was a big special effects

factory, if you like, for five out of the top 10 highest-grossing films of all time.

But those five aren't Peter Jackson films.

Weta have done effects for both the Avatar films, the Avengers franchise, among many others.

Now we talk about how billionaires spend their money.

Jackson's spending habits are not exactly your typical billionaire.

It's more comic book nerds.

So he spent lots of money on war memorabilia.

He's got 70 World War I planes, which is one of the largest collections in the world.

He also collects film props.

He's got, I love this, he's got Howl's Eye from 2001, A Space Odyssey, and he's got the car from Chitty Chitty Bang Bang.

So he's got Chiti Chitty Bang Bang, basically.

I would love to sit in that car and just reenact the whole film.

He's got a New Zealand property portfolio, which is estimated to be worth $200 million.

It includes film studios and 20 private homes.

He also bought a former airbase.

in order to stop a housing development and has plans to rewild the site.

And clearly the Lord of the Rings is is still a very dear film to him because in his 1930s New Zealand mansion he had the Hobbit House, which is called Bag End for those in the know,

rebuilt in his basement.

You can visit it by pulling a wine bottle in the cellar to open a corridor to Bilbo's home.

My mum would love that.

I remember when she was watching Lord of the Rings, she said, it looks so nice in the Shire.

Why would they ever leave?

I mean, this is the question that propels quite a lot of the Lord of the Rings films.

Let's hear from the man himself.

Here's Peter Jackson talking to BBC Radio 4 in 2012 about innovations in film technology.

I don't hold necessarily to the romantic notions that film has to have a certain look because if that's the case today and you know we say okay we need to stick with the technology of 1927 can't change it is that going to apply in 50 years time is that going to apply in 100 years time I mean at what point does the horse and cart have to get replaced by the engine so clearly they're defending the creeping use of technology in films and whether it takes away some of the artistry and we'll probably get to that but before we do let's go right back to the beginning zero to a million

so peter jackson was born on halloween which is quite apt actually given his early career in 1961 in wellington new zealand 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 he's grown up in a coastal village which is some 30 kilometers 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.

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 idolised 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 the time, looks very dated now.

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.

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.

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, which shot an eight-millimeter film.

And it was kind of cheap for home use, too.

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.

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 of blowing him up and he screened the film for his classmates.

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.

That school teacher, on the other hand, only found out he had 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 films.

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.

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.

So clearly an obsessive from a very, very early age.

He actually lived with his parents and used all his wages to make films.

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 Taste, 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.

I mean, he is creative.

You have to give him that.

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.

And crucially, he was even building his own equipment, including a version of Steady Cam, which is a piece of camera kit that holds the 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 tax savvy in his own way.

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.

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, Mancott 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.

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 80s.

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 Next Wheel Films.

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.

It became became a bit of a cult classic, though.

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.

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 international marketplace of films.

So he managed to sell it.

Jackson was finally able to quit his day job and make films full-time.

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.

They married in 1987, and unusually for some of our billionaires, they are still together.

They're quite the dynamic duo.

Yeah.

So the first two 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.

Yeah, but then along comes his fourth film, one called Heavenly Creatures, which stars a very young Kate Winslet.

Massive change of gear here, because this is a very different film.

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.

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 had 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.

Something big, something

prehistoric.

It was a film called Jurassic Park.

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.

So, he formed this special effects company, Wetter Digital, with his film editor on Braindead and Meet the Feebles, a guy called Jamie Selkirk and Richard Taylor, who already ran Wetter Workshop, the company that made the props and puppets for both of those films.

Now, if you're actually wondering what Wetter is, spelt W-E-T-A, so not Wetter, isn't more Wet.

Yeah, Wetter.

It's Weta is actually named for a New Zealand insect, which is one of the world's largest and used to feature on their logo.

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 8,000 US dollars and enlisted amateur George Port to master it and gave him two pages of instructions and said, figure out how it works.

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 are 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.

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.

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 5 million US dollars 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 Wetter.

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.

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 operation.

That's very interesting.

So despite the fact that the film just broke even, quite a lot of the budget was spent on the company that Jackson owned.

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.

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 as their sound stage.

They even started roping in Kiwi locos, which will become a bit of an ongoing theme.

Yeah, I think just about everyone who is a citizen of New Zealand wasn't 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.

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.

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 Zealanders 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 Light and Magic when they had to rush to a deadline.

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 $17,000

each, which was about a quarter of the prices that Jackson was being quoted by American houses.

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.

Oh, I remember that film.

The special effects still look amazing.

Yeah.

So by the late 1990s, Jackson established himself as a reliable filmmaker who's created his own studio system effectively outside Hollywood.

Michael J.

Fox, who remembers 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.

He himself is an unusual figure, five foot six 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, it said in the 1990s.

One US producer actually said he personifies the New Zealand culture, humble, friendly, and full of can-do ingenuity.

In many ways, quite hobbit-like characteristics.

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 you what to do.

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.

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.

Yeah, 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 paused the production there's not room in the not room in the releases for two for two big big ape movies no only one allowed at a time so jackson and his partner ran 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 tolkin's lord of the rings books for inspiration and finally they thought you know we always keep referring to this book so we might as well just acquire the rights and adapt it yeah not straightforward though i mean 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 it 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 there's the name so Weinstein is now obviously a disgrace producer he's in prison having been prosecuted as a sex offender following the revelations around me too but in the late 90s when Peter Jackson approached him he was riding high he was one of the kings of Hollywood.

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.

So Weinstein called in a favour from a legendary film producer called Solzants, who held the rights to Lord of the Rings and offered Jackson a deal to turn the three books into two films.

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 green lit.

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.

Yeah, if you've seen the size of the books, and I know if you read them when you were a kid, I did.

They're big, big wedges of books.

And the idea of getting three of them, there's a trilogy, into one film, you're going to lose quite a lot of the nuance and the detail.

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.

This is one of those incredible junctures we come across in some of 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 is going to be a fix-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.

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.

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.

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 six installment of Nightmare on Elm Street, which is a hugely famous horror franchise.

Yeah, the New Line producer Mark Ordetsky had asked Jackson to do this because he was a big fan of Bad Taste, which is helpful.

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 Odesky on board as a producer.

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've got the intellectual property.

This could be our last ever chance to get it.

So they took a gambling and went for it.

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.

Yeah, much to Jackson's surprise and delight, no doubt, New Line suggested they make not two films, but three.

Jackson then suggested making all three films at the same time to save money, really pushing his luck here.

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.

You can see the rationale economically of doing all three films at one time.

You don't want to get everyone out and then bring them all 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.

Newline put in $130 million.

That was the studio's most expensive project ever.

So finally, in 1998, Newline 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.

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 profits.

So I think we can say for sure that in 1998, the Lord of the Rings deal made Peter Jackson a millionaire.

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 the same way one does not simply walk into Mordor.

So how does he actually get to a billion?

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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.

Even when the production started in 1999, all three films weren't certain to be completed because Jackson and the studio still had to raise the rest of the 280 million budget required to complete these really epic films.

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.

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.

And the credit scenes go on and on.

Newline, 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 hits, this could have resulted in financial disaster for some of them.

So Newline organised a trip 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 mini Hollywood studio.

I would love to be on that plane.

Wouldn't that be great?

Anyway, that trip worked and the money was promised.

But production in New Zealand is still a nascent market, still offered some big challenges.

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 ridge 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.

So Jackson spent 274 shooting days.

That is a lot initially.

And then another pick-up shoot taking the total to 435 shooting days with the crew working six days a week.

So a real marathon effort this.

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 landscape.

That's amazing.

Also the size of this project though had given a bit of 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.

So this was a gamble for New Zealand and it massively paid off because Lord of the Rings kick-started the nation's film industry in a huge way and by 2023 it was generating about about 2 billion US dollars in GDP annually.

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.

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.

And it was a nice atmosphere.

Everyone felt they had some sort of stake in it.

People were very proud of the franchise when I was there in the 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.

New Line 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.

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 cost to make.

That big gamble really did pay off.

And also critically as well, because the films actually got a total of 30 Oscar nominations and it won 17 of them, including Wetter's visual effects for each film.

Yeah, can I be a heretic here and say I actually don't think the first two films are all that good?

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.

Okay.

And I mean if you go up to a millennial woman of any age and you ask her, are you an Aragon girl or a Legolas girl?

Okay.

That's Orlando Bloom versus Viggo Mortensen.

That's Orlando Bloom versus Viggo Mortensen.

You know,

it penetrated pop culture in a way that I think very few fantasy films do.

Okay, so I've got to ask you that question.

Well, okay, my theory is that when you're a teenage girl, which is when I watch the films, you are 100% a legalist girl.

And as you get older and you start seeing the value of a, you know, a grown man who can run a kingdom and save the world, it's Aragon.

It's got to be Aragon.

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.

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.

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.

So the budget ended up at about an estimated $207 million.

But unfortunately for Peter Jackson and Universal, it was a flop.

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 whatever.

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 Lord of the Rings kind of knockout.

But luckily for Peter Jackson, the Lord of the Rings continued success was making him a very rich man.

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.

So in 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.

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 know, as we say, it made $3 billion at the box office and it had a budget under 300 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.

Still, there there are other ways a film can make profits, which Jackson also would have been entitled to, 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 Newline.

Yeah, so he filed a lawsuit.

The case was eventually settled.

Newline paid Jackson an 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, Mr.

Kiwi Nice Guy clearly has a bit of a backbone in him.

Well, isn't it funny?

It's all lovey-dovey until it comes to splitting up the money.

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.

Yeah, in 2007, he bought New Zealand's formerly state-owned national film unit that was a 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.

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.

Yeah, so he bought a new soundstage, special effects workshops, at the editing suite, and he spent more than $50 million on it.

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.

Definitely.

He's continued to have success after Lord of the Rings.

He had some beef with New Line, as we just hid, 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.

Fix your 5'6 barefoot filmmaker problem.

Yeah, it would have been quite weird for somebody else to try and take that on.

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.

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 are saying, hang on a second, enough's enough.

And actually, documents that were released later revealed emails from Jackson saying that he was not, quote, anti-union, but also describing a union organiser as a snake and referring to the unionisation effort as toxic nonsense.

Yeah.

Anyway, the Hobbit trilogy costs $754 million.

Amazing that it costs more than Lord of the Rings.

I know.

Strange.

Because some of the special effects don't seem to hold up as well as the Lord of the Rings one.

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 freezer, 20% of the net.

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, Get Back.

Loved that Get Back documentary.

Gripped by it.

But listen, this is called Good Bad Billionaire, this programme, so we need to figure out how he got to a billion.

So far, we've only got him to $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 that made him a billionaire.

Now, before Lord of the Rings, Wetter 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.

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.

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 iRobot, X-Men First Class, Chronicles of Narnia, and then they got another Oscar, this time for the visual effects on Avatar in 2010.

Another huge film.

That was a massive thing, that.

In fact, Avatar, I mean, the special effects was the movie, right?

It was all about that.

People went to see how they did the aliens.

Yeah, exactly.

And what's interesting is that James Cameron, who is director of Titanic and Avatar, he's not on our list of billionaires, but the person who did the visual effects is.

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 Wetter Digital works on.

But when you look at it one way, Avatar's production costs were $230 million, a lot of which, as you said, were spent on effects.

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 were becoming a big part of where filmmakers were spending their ever-increasing budgets.

And he was right in the right place for that.

And actually, by 2023, Weta had worked on over 100 films.

It's got 7,000 people working on an average of six films a year.

It is quite the factory.

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, 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 WetaFX, with Jackson having the majority ownership.

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 So that's $975 million total, given the fact he's already worth $350 million.

In 2021, Peter Jackson is a billionaire.

We can't let his billionaire status go past without mentioning the controversy at the company.

So Unity owns Weta Digital.

But Unity said it was going to pull out of its agreements with WetaFX, and that left 265 engineers redundant.

So that was in 2023, so relatively recently.

And Jackson's wetter effects have said they would try to re-employ as many of the workers as they could.

But analysts have described the deal as terrible for Unity because it was just hard to take out the tech element from the company as a whole because they were so intertwined.

So billionaire Jackson keeps the money and he has more films on the horizon.

The animated film, The Lord of the Rings, The War of Rohirim, is due to be released in 2024.

Looking forward to that one.

And he's also due to direct the sequel to Tintin.

So there he is.

He's still working.

He's a billionaire.

Now we just have to judge him.

We'll judge him out of a series of categories, including wealth, villainy, rags to riches, and we'll rank him out of 10 as to how highly he scores in those.

And then we'll decide, is Peter Jackson good, bad, or just another billionaire?

So let's talk about wealth.

Is he richer than Smog the Dragon sitting on his mountains of gold?

Good one.

I like that.

Well, one and a half billion.

He's He's only just over a billion.

So for the purposes of our list, there are two and a half thousand billionaires and the richest are over 200 billion.

So he's entry-level rich.

So scores low on that.

But he is one of only four filmmakers to make that list.

The other ones are Steven Spielberg, George Lucas, and newcomer Tyler Perry.

He's a third of three New Zealand billionaires, certainly the most famous rich man in New Zealand.

But in terms of wealth, I'm going to give him a one.

Yeah, he's pretty entry-level for me.

I feel like I will give him slightly higher because you know being New Zealand's most famous rich man

I mean it kind of sounds like a backhanded compliment but it is a big deal so maybe two out of ten for me.

Okay two out of ten on the wealth.

Rags to riches.

Now this is how far have they come from their beginnings to where they are today.

I think this is pretty amazing because his parents were quite working class people.

He started making super low budget films, living with his parents.

He's living in New Zealand, which is a long way from Hollywood.

So to actually get to the top of the filmmaking from there, from that location and that background is pretty impressive.

And also to stay relatively grounded, I would say.

You know, he doesn't really spend his billions on flashy things.

He just seems to spend it on filmmaking stuff.

I would give him a seven out of ten for this.

Yeah, I'm going to give him an eight for this.

Okay, Ragster Riches, seven from me, eight from you.

Now, what about villainy?

Doesn't sound like much of a villain.

No, he sounds like quite a cuddly guy, to be honest.

He's gentle.

He sounds quite hobbit-like, you know, kind of quite mild-mannered.

But maybe, you know, when he slips the ring on, he gets all bit weird.

Yeah, he starts saying things like, unions, there shall be no unions in Mordor.

Yes.

But, you know, there were some cultural issues at Weta.

Former staff alleged that Weta Digital's workplace culture included bullying, sexism, sharing of pornography, and an inquiry was launched into all these claims.

Yeah, a former employee described it as the world's most beautiful toxic waste dump, saying there were allegations of pornographic mailing lists hosted on their internet, staff openly viewing pornography in the studio.

The review, which was completed in 2022, received 80 complaints of bullying, 120 of inappropriate behaviour, and 17 recommendations were made to improve the culture at Wetter.

One wonders, you know, when you've got quite a big organisation, how much a mild-mannered man who's off, you know, in his own thoughts has control over an organization like that.

There's no implication he was a participant in any of those cultural issues either.

Exactly.

So I'm going to score him low on villainy.

I'm going to give him, you know, one for villainy, or maybe zero.

Let's give him one, just in case he did some bad stuff, which you find out about later.

Yeah, I'm going to give him a one.

He's still got time to slip the ring on.

Yeah.

Philanthropy.

He's been known to give to UNICEF.

He's been a donor to stem cell research.

The latter, after a young filmmaker called Cameron Duncan, whom he befriended and helped make some short films, died of cancer in 2003.

He also spent $10 million New Zealand dollars to save a historic chapel in Wellington from developers.

Again, just

loves New Zealand, doesn't he?

Yeah, you know, he clearly loves where he comes from.

He's really doubled down.

He's invested money back into it.

He's created almost single-handedly an incredible industry.

And that, in a way, is philanthropy of sorts.

I'm going to give him seven.

I'm going to give him seven, I think, because I think, you know, it's not technically philanthropy to reinvest in your industry, but maybe it kind of is to build one from start in a way that contributes to your country's economic growth in the same way he has for New Zealand.

So seven each on power.

This is a tricky one because obviously.

Clearly important culturally.

Is he powerful?

I'm sure he could make any film he wants to.

He's got enough money to finance it himself.

If he wanted to make an amazing, you know, if you wanted to make another Marvel MCU film, you'd probably, he'd be the first place you'd go to do

the effects, if there or Industrial Light and Magic.

So clearly a powerful person in New Zealand, for sure.

A powerful person in Hollywood.

But beyond that, I think pretty low.

I'd give him a three.

I mean, he was also able to influence the New Zealand government to change its tax policies to favour his projects.

That's true.

That's true.

So I've got some power.

I would score him slightly higher.

Maybe I'll give him a four out of ten.

Okay.

All right.

Three from me, four from you.

Our last category is is legacy.

In New Zealand, I mean, an amazing legacy.

He's created an industry, a sustainable one.

There will clearly be statues of him if there aren't already.

And I think he's got a big legacy in Hollywood.

I mean, I think back to the kind of films, fantasy films coming out around that time, Lord of the Rings really upped its game because there wouldn't be a Game of Thrones or House of Dragon without Lord of the Rings.

There wouldn't be, you know, this huge boom or interest in fantasy or historical epics.

It basically resurrected the Lord of the Rings franchise from just a book that nerds love, apologies to anybody who loves the books,

into something that was an economic powerhouse.

So I think in that sense, his legacy is really huge.

Yeah, you don't have to wonder, is there any appetite for fantasy anymore?

You know it's there.

And he proved it and he unearthed it and monetized it.

Exactly.

You had people like David Lynch trying to do fantasy with his adaptation of Dune, flopped.

You know, the Lord of the Rings can't even flopped.

But Peter Jackson turned it all around and it was a huge gamble because if you read the books and you're a movie exec, you're looking at it going, sorry, which elf goes where with what?

Like, how is this going to be made on screen?

How many characters do I have?

What language are they speaking?

So

the bad guy, there seem to be tons.

What's this giant floating eye?

So Peter Jackson made that all a reality.

So I think, you know, Legacy for me scores quite highly.

So I think eight out of ten.

Okay, you've convinced me.

You make such powerful arguments.

I always get not bullied.

Easily.

Persuaded.

i'm easily i'm easily led on these things so there we go i'll give him eight for legacy as well so is he good bad or just another billionaire i think this is an easy one isn't it this is easy for me he's a good billionaire i just love the films okay the lord of the rings was to your era what thaw was was to mine and george lucas definitely was a good billionaire so Congratulations, Peter Jackson.

You are a good billionaire.

And please, I would love to visit Bilbo's house.

So if you're listening to this, let me pull the lever and enter the secret dungeon that contains Bilbo's

So who do we have on the show next episode?

The richest comedian on the planet who got rich making a show about nothing.

It's Jerry Seinfeld.

Good, Bad Billionaire is a podcast from the BBC World Service.

And if you've enjoyed this episode, we've also got tons of other entertainment billionaires on the show.

We've had Taylor Swift, we've had George Lucas, George Lucas, we've had Oprah Winfrey.

Rihanna.

Rihanna Soap.

Jay-Z.

Jay-Z.

I mean, it's Showbiz Centre over here.

Yeah, and tons of others.

So you can get that from wherever you get your podcast.

That's Good Bad Billionaire.

This podcast was produced by Mark Ward with additional production support from Tams and Curry.

James Cook is the editor.

For the BBC World Service, the senior podcast producer is Cat Collins, and the podcast commissioning editor is John Minnell.

And it's a BBC Studios production for BBC World Service.

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