George Lucas and Peter Jackson: Film stories

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Hello, I'm Zing Sing.

And I'm Simon Jack.

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 listeners, to get in touch and tell us if you think each of them is good, bad, or just another billionaire.

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?

But before that, as the world of cinema has brought us some of the best stories in the Good Bad Billionaire back catalogue, we're going to share two classics with you again.

The stories of two directors who conquered the silver screen and made billions of dollars by creating some of the biggest film franchises in history.

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.

Our story begins in a kind of bucolic childhood in the 40s in little small town Modesto, California.

And George Lucas is born to a small-town business guy who runs a stationery shop.

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.

Right, that kind of suburban Americana, 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.

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.

Oh man, 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.

Interesting.

And actually, you know, what I did find out in the process of researching this is that all of those kind of childhood influences came up again and again in George Lucas's 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.

Well, with a big boulder, rolling.

With a big boulder rolling after Scrooge's henchman.

God, isn't it funny how these things, these notes come back?

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.

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.

Right.

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.

Yeah, and this is an important moment because that's when he stopped driving the cars and started filming them instead.

Which in those days, 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.

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.

It's quite an odd film.

I mean, I watched a little bit of it.

It's called Electronic Labyrinth THX11384EB.

Bit of a mouthful,

to say the least.

Sounds like something Elon Musk would call his dog or something.

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 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 THX1138 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 know just thx 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.

Oh wow.

Okay.

Well, I had no idea that was what THXX actually came from.

I just assumed it was a coincidence.

No, not at all.

No, that's his company.

So, one of many, as we'll see.

So, as weird as the title was,

it actually launched him.

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.

Francis Ford Copler, 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 Zoatrope.

He's only 25, so he's clearly got a commercial head on his shoulders as well as a creative one.

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.

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.

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 to sort of dust yourself down from your first misstep to do it again, having learnt 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.

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.

Oh my God, what a happy accident that is.

A happy accident, a little fun twist of fate, but it doesn't go so well for George, right?

So after THX flops, he marries his film editor girlfriend, Marsha Lou Griffin, and ends up having to live off her salary for a bit.

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 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.

At 2 a.m.

over a glass of champagne.

Yeah.

Or something else.

Or something else by all accounts.

But he gets $10,000 from David Picker, who's the president of United Artists, to develop this film called American Graffiti.

Yeah.

Which ends up being the film that turns his career around.

By the way, he sets up his own company on that $10,000.

$10,000, you'd think I'm going to pay my rent, whatever.

He sets up Lucasfilm Limited.

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.

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 this is relatively small.

bucks for a movie.

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 mana 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.

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.

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 profit 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 five or ten 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.

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.

Exactly right.

You're reducing your fixed costs and you are

giving this person an option on the success.

Now, studios always regret giving the money money away once it proves to be a success.

That's the way it works.

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.

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 share of this gets him to his first million.

In fact, $4 million.

So at this point, American Graffiti, he's a millionaire.

And don't forget, this is all done at the tender age of 28.

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.

Who cares about the Oscar when you've got four million in the bank at the age of 28?

It's funny, I think when they look back, they really care about the Oscars, but only when they're really rich.

Then they go, oh, gosh, the Oscars count more than anything.

It's all about the art when you've got the money.

When you haven't got the money, it's all about the money.

We've now established he's four times a millionaire, but how does he get to a billion?

Because that is quite a significant amount more money.

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.

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.

Yeah, because you've been forgiven thinking it might be with that description.

Exactly.

But what's interesting also is that he wanted to do a film version of Flash Gordon, but it turns out that Dino de Laurentis, the Italian-American director, owned the rights and wouldn't let him do it.

So actually, it was only because he couldn't do Flash Gordon that he basically said, okay, well, if I can't do Flash Gordon, which I'd love from a child, I'll invent something else, something better.

And that's what he did.

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 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 the smartest moves ever and important for something that will eventually become a franchise he gets the sequel rights and he also gets a 40% profit share.

Some people have talked about that as maybe the best deal in Hollywood history.

It probably didn't look like that at the time because this thing doesn't exist yet, right?

So the studios are signing away the rights of 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 what 40% of nothing is nothing.

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 Star Killer as taken from the Journal of the Wills.

Saga won the Star Wars.

Whoever edited that needs a medal.

And I guess if you, 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 Star Killers, taken from the Journal of the Will.

Saga won the Star Wars.

You are going to think to yourself, yeah, right, pull the other one.

Yeah, thanks, kid.

Not today.

But I think this is the 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.

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 It was all that really artistic directors doing highbrow cinema about stuff.

And 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.

The death of cinema and the birth of the blockbuster.

Exactly right.

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.

One of the reasons they came to London to do it in fact is because the pound was weak.

But with post-production special effects, you know, that budget goes up to 2 million, which is mostly covered by Lucasfund themselves.

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 plows it 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.

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

and rolled the camera over it to make it seem like the text was moving.

And that's the first thing that I'm doing.

I did not know that.

But, you know, when Star Wars was being made, even during that point, George Lucas's 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.

He said it would make $100 million.

He was wrong because he was low.

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.

Who's laughing now?

Those two.

So it was released.

So Star Wars was released on the 25th of 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.

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, they attract 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 Concrite 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.

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.

It's hard to imagine now that kind 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 guess the closest one you could say is Barbie.

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 terms of creating a new world.

And also multi-generational, right?

So a seven-year-old, you could watch it, a 28-year-old could watch it, a 50-year-old could watch it.

Yeah, my mum fell asleep whilst I was watching it.

She took me to the watch.

Not your mum.

I said, how did you fall asleep in that?

There were like explosions going on all over the place.

It was 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 hand 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.

And lots of people 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.

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 dollars out of that.

But suffice it to say, his business partner, the toy manufacturer Kenna, made a lot of money.

But, you know, this money still goes a long way for George Lucas.

So this is a 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 the beard and the glasses.

So he's kind of enjoying his wealth, but he hasn't completely lost touch with reality.

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 the plan.

But it wasn't an easy ride to get to 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 going to fund it, even though Star Wars is a big hit, because no sequel ever earns more than what the original movie does.

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.

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.

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.

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.

And Empire Strikes Back goes on to gross nearly $210 million,

which means that quite a lot of that money is going straight back into Lucasfilm.

He's got enough money to make a 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.

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 Raid of the Lost Ark.

I was with my friend Roger and we went in and we came out and 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.

But this is the point at which his personal life kind of falls apart.

So in 1983, the same year's 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.

Okay, so that gives us a pretty good guide to what his personal wealth must be around the $100 million mark.

But he's still somewhere off a billion.

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, Radioland Murders?

I'm afraid to say I do, but I'm probably in a population of about one.

I mean, the most famous film that I remember from this period, Labyrinth, is initially a bomb as well.

No, but that becomes a cult classic, but many years later, it wasn't a commercial success.

It had David Bowie in it, didn't it?

Yeah, it did.

And

a very young Jennifer Connolly.

Wow.

But, you know, it's still not good tidings for George Lucas because when films become a cult classic, it doesn't put any money in your pocket right there and then.

Yeah.

So at this point, he's actually, you know, Lucas film itself is actually running out of money, but a young tech entrepreneur comes to his rescue.

Steve Jobs.

I just love this.

This is like a cinematic universe of billionaires kind of coming together.

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.

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 getting money back into his pocket.

But eventually, it is Star Wars that brings in the billions because they package up the original ones.

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...

He's in trouble for that, Coman.

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 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 right there's some extremely strange stuff that comes out of the steel 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.

Wow.

Not every director would be that happy with that kind of mission.

And collage,

people would say that is selling out as well as selling up.

But it's really interesting because when you look at films like Barbie, for 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 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.

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 as he will ever need.

He can 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.

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 up saying what was that all about Jarjar Binks not the greatest moment in cinema history he's definitely not in the top 500 characters ever committed to celluloid definitely not but what was interesting is that you had to see them right yeah you felt you had to see them that was a the power of the franchise was so overwhelming that even if you read a view saying this film stinks 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.

And even the little things about the Star Wars universe, the sound of the lightsabers

going on,

chewbakers roar.

These are not special effects or things that we have dubbed in from the movies.

This is just Simon, by the way.

Sorry, Disney.

No trademark suit here.

Really, when you 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 Plus series, nothing to do with George Lucas.

They had spin-offs 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.

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 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.

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.

But as we will discover, it wasn't those films that made him the majority of his vast wealth.

Let's go back to the start and take Peter Jackson from zero to a million.

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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.

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 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.

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 Camp, 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.

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 Real 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 a bit 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 Braind 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, Wet-Wet, 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 page 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 Wetter 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 soundstage.

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

Yeah, I think just about everyone who was a citizen of New Zealand wasn't somehow involved in the Lord of the Rings, which we'll 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'd 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 US dollars 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 had 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 not definitely not hobbit size.

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 a 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.

Wetter, 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 the the production.

There's not room in the releases for two big ape movies.

No, only one allowed at a time.

So Jackson and his partner, Bran 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 thought, you know,

we 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 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.

There there's a 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 favor 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.

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.

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 fax-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 inn 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.

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 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, 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.

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 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?

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 Newline 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 New Line 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 his mini Hollywood studio.

I would love to be on that play.

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 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.

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.

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 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 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 early 2000s.

So once the films were made, the final challenge was marketing them.

Newline's research showed that only 20% of audiences knew anything about the 50-year-old books.

Neoline 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 actually I 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 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 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 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 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 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 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 a hundred million dollars 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 dollars 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 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 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 hit, 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 five foot six 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 organizer 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, 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 program, so we need to figure out how he got to a billionaire.

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, Wetter Digital.

It was that that made him a billionaire.

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.

So the co-founder of the company, Richard Taylor, said, I flew to the 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 the 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 Weta Digital 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.

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 compiles 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 million.

In 2021, Peter Jackson is a billionaire.

So that is how Peter Jackson became a billionaire.

I'll be back soon with brand new episodes.

I'll be back too.

There's a little hint of someone we might be hearing from in the future.

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 goodbadbillionaire at bbc.com or drop us a WhatsApp to 001-917-686-1176.

That's goodbadbillionaire or one word at bbc.com or 001-917-686-1176.

We've lost 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.

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 Minot.

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