E.T. the Extra-Terrestrial / 1980s
Spielberg immediately carried the rejected project to Sid Sheinberg, president of MCA, Universal Pictures’ parent company, and urged him to acquire the screenplay. Universal purchased E.T. from Columbia for $1 million. The arrangement contained an extraordinary consolation prize for Columbia: it retained 5 percent of the film’s net profits despite having decided the project was too soft and too juvenile to succeed. The gamble became one of the great studio miscalculations of the era when E.T., released in June 1982, became a global phenomenon and surpassed Star Wars as the highest-grossing film ever made, holding that record for eleven years. John Veitch later acknowledged the irony, recalling that Columbia ultimately made more money from its retained participation in E.T. than from any of its own films. The episode became a classic example of Hollywood executives misreading an unconventional property—and of a studio’s turnaround system allowing a rival to harvest the rewards.
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