Power Lawyers: How 'Star Wars' Nerds Sold Lucasfilm to Disney
With $4 billion in the balance, Skadden Arps' Brian McCarthy sorted through decades of complex rights deals.
This story first appeared in the May 31 issue of The Hollywood Reporter magazine.
Before The Walt Disney Co. could complete its $4.05 billion acquisition of Lucasfilm in October, its lead attorney, Brian McCarthy, and a team from Skadden Arps faced a daunting task: figuring out whether George Lucas actually owned the rights to Han Solo, Lando Calrissian and about 10,000 characters and elements from the six Star Wars movies and their various offshoots.
McCarthy, the head of his white-shoe firm’s Los Angeles office, narrowed the task down to 290 primary, copyrighted characters. To sort through them all, he assembled a legal team of bona fide Star Wars fans. “I tried to find people in the office who ... didn’t have to spend time figuring out who Princess Leia was,” recalls McCarthy. “I was shocked by how many people knew the intricacies of whose father-in-law was married to whose sister.” The top-secret process — code names were employed to keep office chatter to a minimum — started in June 2012, and crunch time came during a six-week period beginning in August, when as many as 20 Skadden employees (from $500-an-hour partners to less expensive paralegals) pored over complex chain-of-title documents related to Star Wars and Lucasfilm.
“George had a history of associations with different people who had different rights, so sorting that all out was our biggest challenge,” says McCarthy. “Like anything else in the entertainment industry, if something becomes successful, everybody puts their hand up. So, over the years, there were people who put up their hands.”
Working with Lucas’ lawyers at Latham & Watkins, McCarthy's team researched all copyright assignments and distribution agreements. The team eventually determined that all the important copyrights were intact and available to sell to Disney, save for distribution rights for the original Star Wars film, which 20th Century Fox maintains even after Disney’s acquisition of Lucasfilm closed Oct. 30.
Despite the complexity of the deal and the worldwide headlines the announcement generated, McCarthy -- who also worked on Disney’s 2006 purchase of Pixar Animation Studios -- says the transaction surprisingly was smooth. He never even had to fly to Lucasfilm’s San Francisco and Marin County headquarters, leaning on Skadden associates from the firm’s Palo Alto offices to handle the face-to-face work. “I’ve seen deals where there are enormous sticking points,” says McCarthy. “But this one had a sense of rhythm and momentum.”
Could it have been guided by the Force?