You Won’t Believe Who Makes the Most from Universal Studios
Whenever Universal Studios negotiates with a talent, it offers terms for a long-term agreement.
For example, Universal famously gave author J.K. Rowling anything she wanted in exchange for the Harry Potter license.
Photo:cnbc.com
That agreement led to the creation of The Wizarding World of Harry Potter, the themed land that fundamentally changed the fortunes of Universal Studios.
Notably, Rowling was NOT the person happiest about the success of Harry Potter.
No, that honor belongs to someone entirely different…but it’s someone you know.
You won’t believe who makes the most money from Universal Studios!
The Facts about Universal Studios
In 2019, the final year before the pandemic, more than 21 million park visitors entered the gates of Universal Orlando Resort’s two parks.
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Meanwhile, in fiscal 2022, Universal Studios reported $7.5 billion in theme park revenue.
As a reminder, those numbers are somewhat deflated by lingering pandemic concerns early last year.
Universal Studios could feasibly surpass $8 billion in theme park revenue in calendar 2023. Even better, the theme park empire will grow soon.
Photo: Universal
Universal’s Epic Universe opens in 2025, and Universal just signed two deals for new theme parks and experiences in Frisco, Texas, and Las Vegas, Nevada.
Yes, Universal’s theme park revenue is poised to explode in future years.
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This knowledge will make one of the most famous people in Hollywood smile.
I say this because an already wealthy individual benefits the most from Universal’s theme park revenue.
To understand who that is and why Universal made the deal, we must go back to the beginning.
Photo: Security Pacific National Bank Collection at Los Angeles Public Library]
Universal Studios and the World’s Most Famous Director
In 1964, Universal Studios hired a teenager to work as an assistant editor.
Photo: HBO
Little did anyone know at the time that a long-term relationship had formed, least of all the teen.
Two years later, this now-adult gained a temporary assignment at Universal Studios, a gig that should have lasted three days.
However, he befriended the security guard enough that he stopped needing to show his credentials.
Photo: Wikipedia
The fledgling filmmaker couldn’t get into film school, but he could sneak onto the Universal Pictures lot daily. He would later describe himself as “an unofficial apprentice.”
By 1968, Universal trusted the young man enough to create a short film, which he named Amblin’. That name’s a hint about the person’s identity.
Photo: Amblin
Yes, Steven Spielberg of Amblin Entertainment developed a lifelong business relationship with Universal by pretending like he worked there one summer.
In 1974, Universal released Spielberg’s first feature-length project, The Sugarland Express.
While the movie failed at the box office, Spielberg earned a screenwriting award at the Cannes Film Festival.
Photo: EVERETT COLLECTION
Soon afterward, Spielberg directed a little film called Jaws, and the rest was history.
While Spielberg has worked with several movie distributors over the years, Universal has remained his one true love.
In fact, 2022’s The Fabelmans earned seven Academy Awards nominations. It’s a Spielberg project distributed by Universal.
Photo: Wikipedia
The mutually beneficial relationship remains in place to this day.
The Theme Park Deal
When Spielberg started as an assistant editor, Universal Studios Hollywood didn’t exist as an official theme park.
Photo:Security Pacific National Bank Collection at Los Angeles Public Library]
Yes, the World-Famous Studio Tour had operated for decades by then, but Spielberg and the theme park arrived at nearly the same time in 1964.
After the release of Jaws, that tour and the shark became synonymous in the eyes of park guests.
Universal executives knew that they had Spielberg to thank for the ascending popularity of the aged studio tour.
Photo: Universal studios hollywood
By the late 1980s, Universal planned a new theme park in Florida. Spielberg was already an icon by then. So, Universal wanted him involved with the project.
The terms of the Universal Studios Florida deal will boggle your mind.
Some reports suggest that the legendary director earns two percent of all revenue at Universal Orlando Resort.
Photo: Universal
Here’s a quote from The Orlando Sentinel in 2003: “The director collects 2 percent of the gross — from tickets to concession sales — from Universal’s two parks in Orlando.”
That’s not even the stunner. Variety has reported that the deal is substantially more lucrative now!
A More Rewarding Contract Extension
(Photo by Pascal Le Segretain/Getty Images)
According to a 2009 article, Spielberg renegotiated terms in 2009. He had Universal over a barrel, as the studio faced a potential nine-figure buyout of his deal.
Universal could have paid Spielberg a lump sum that year to end a contract that otherwise extends in perpetuity…even after Spielberg’s death!
(Photo by Michael Short/Getty Images)
The estimates suggested Universal would have paid Spielberg at least $200 million to end the agreement.
However, Universal lacked the funding at the time.
You may recall that Universal Orlando Resort was building a little thing called The Wizarding World of Harry Potter.
Photo: Facebook/Universal Orlando
Universal spent $265 million on that project alone. Tossing Spielberg another $200 million was a non-starter.
Even worse, the terms of Spielberg’s agreement meant that he would get paid before any other Universal creditor, even J.K. Rowling!
With Universal unable to pay, the director kindly agreed to push the next contract buyout until 2017…at a price.
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Specifically, “Spielberg receives 5% of all gross revenue generated by (Universal’s) two parks in Orlando, Fla., and one in Japan, valued at up to $50 million a year. Universal Studios Hollywood is not included because it predates the initial agreement.”
Yes, Universal started with a two-percent payment to Spielberg, which was already a ridiculous amount of money.
(Photo by Jason LaVeris/FilmMagic)
Then, once the director possessed full negotiating leverage, he bumped it up to five percent!
Given what happened with Universal attendance in the wake of The Wizarding World, Spielberg may have been J.K. Rowling’s number-one fan!
Photo: Orlando Sentinel
In 2009, before Harry Potter Land opened, Variety estimated the value of Spielberg’s Universal Studios deal at $250 million or more!
The Deal Got Extended Again!
Here’s perhaps the most stunning part.
Photo: Getty
According to reports, Spielberg nets $50+ million annually from Universal Studios.
In 2017, Universal Studios once again had the right to terminate the agreement in exchange for a lump sum payment.
Remember how the company kicked the can down the road in 2009? Well, they did it again in 2017!
(Jeff Fusco/Comcast via AP Images)
Comcast, the corporate owner of NBCUniversal, filed documents in 2016 that suggested Universal had chosen not to end the agreement.
The pertinent language is, “(We) no longer expect the settlement of the arrangement in 2017, or shortly thereafter.”
Comcast had chosen to spend that money on Universal Studios Japan and the construction of Universal Studios Beijing.
Photo:Universal Studios Beijing
For his part, Spielberg happily allowed the agreement to continue.
After all, each time Universal expands with a park of similar scale to Universal Orlando Resort, his stake increases accordingly.
While I’ve read no recent conjecture about his Universal Studios earnings today, those previous estimates appear rather dated.
Photo: JESSE GRANT/GETTY IMAGES
Given Universal’s expansions, if Spielberg’s not already earning $100+ million annually from this agreement, he should be by 2026!
Whenever Universal Studios grows larger and more popular, Steven Spielberg wins even bigger. It’s a stunning bit of theme park trivia.
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