The Empire Bounces Back

You want a free tie? Here, take one. Take three! Just be forewarned: They've got Yoda on them. And Jar Jar Binks. And Anakin Skywalker, the cheeky little punk from "The Phantom Menace"--the one you probably wanted to muffle, ideally with the tie. Ralph Marlin & Co. has hundreds of them left, the worthless booty of a deal with Lucasfilm that went sour the moment "Menace" hit theaters in 1999. Joe Oleinik, a Kentucky Fried Chicken franchiser in Wyoming, has cup tops--you know, plastic figures that fit on the tops of soda cups. The idea was to collect all 12, and you still can, because Oleinik has a whole warehouse filled with them. At least it wasn't just the little guys. Hasbro, which paid out a stunning $650 million for the toy rights to George Lucas's three new "Star Wars" installments, watched 25 percent of its stock die on the shelves. And Tricon Global Restaurants, which owns KFC, Pizza Hut and Taco Bell, actually lost customers during its "Star Wars" promotion. But no one was hurt more by the "Menace" than Lucas's tireless legion of fans. Forget about money. They lost their faith.

Yes, "The Phantom Menace" is the fourth highest-grossing film ever. Yes, it made almost $1 billion worldwide. And yes, anybody who thinks part two of the new trilogy, "Attack of the Clones," which opens May 16, will be anything but a smash doesn't know R2-D2 from a Cuisinart. Never mind all that. "Menace" was a gold-leafed dud for Lucas, its writer and director. It was a lame kiddie flick. The dialogue hurt. And Jar Jar--yep, see, already you're cringing, and all we did was mention his name. "Thirty seconds in, I remember thinking to myself, 'Oh no...'," says John Benson, creator of the fan site Some fans tore down their Web sites in a huff. Those who stayed wondered aloud whether Lucas, a famously stubborn CEO, would listen to all the people begging him to change course before he tainted a franchise adored above and beyond all others.

According to sources close to the Big Kahuna, the answer is yes, George was listening. Of course, the proof will be in the pudding in May, when Anakin (Hayden Christensen) Skywalker's slow descent into the Dark Side resumes--and his rapid ascent into manhood begins, thanks to the gorgeous senator Padme Amidala (Natalie Portman). But before we know the final score, let's pause and give the man credit for trying.

After "Menace" finished its run in theaters, Lucas knew he had work to do. In his opinion, sources say, his chief blunder was allowing the merchandising bonanza to get out of control. But he also realized that his filmmaking skills were rusty on "Menace"--his first directorial effort in 22 years--and that its cheesy tone alienated many devoted fans. (Lucas declined to comment for this story.) "George is now much smarter about what he should do and should not do," says one associate with no stake in "Attack of the Clones." "He's not a stupid man. He doesn't want to hurt the franchise." There's evidence to back that up. A Lucasfilm marketing pitch to Hasbro dealers, obtained by NEWSWEEK, plainly states, in bold type, "The last movie did not live up to expectations." Lucas had two jobs on part deux: make a better film, one that recaptured the magic of the original trilogy, and woo back a jittery fan base.

His first--and most humble--concession was bringing in a co-writer, Jonathan Hales, to soften his wrecking-ball style of dialogue. Did Hales actually have any influence? Well, let's put it this way: an early draft of the script read by NEWSWEEK showed... improvement. Lucas was clearly more committed about changing the overall tone of the new film. The marketing pitch promised an action-packed movie with a "darker feel, closer to the original saga" and "no silly characters or kids." The script bears that out, as do folks who've seen the new movie. "Last time, the Jedi spent most of the movie sitting around some boardroom in a meeting," says Harry Knowles, of Ain' "This time they're investigators, protectors, fighters. It's what the fans always wanted." Jar Jar does appear in the upcoming film, but his role is blissfully small. Lucas even experimented with giving Jar Jar an excuse to drop his annoying (and, to some ears, offensive) "meesa eesa" patois. In the early draft of the screenplay, Jar Jar claims to have learned a prim and proper accent for use in the presence of senators. Word is, Lucas ultimately dumped the idea--too contrived, perhaps--but, hey, at least he considered it.

His mind was made up, however, about "Attack of the Clones" merchandise: it had to be better than last time, and there had to be less. Much less. For "Menace," PepsiCo manufactured 8 billion--8billion!--"Star Wars"-themed cans of soda. As for Hasbro, Lucasfilm's marketing pitch conceded that the toy line was "over-licensed," "over-shipped" and "over-saturated." Collectors, who typically make up three quarters of the "Star Wars" memorabilia market, simply couldn't keep track of all the toys. "It was so much you couldn't see the forest for the trees," says Philip Wise, founder of the collecting site RebelScum .com. "Many fans just put their hands up and said, 'OK, I give up'." It didn't help that the movie itself had so few cool, new vehicles. Or, as JediNet's Benson puts it, "Who wants to play with a goofy Trade Federation ship?"

More damaging than the poor marketing acumen, though, was the bad taste all that merch left in everyone's mouth. It was crass. Paired with an inferior movie, the overkill made fans suspect Lucas was taking his money and laughing all the way back to Skywalker Ranch. He got that message loud and clear. "The first prequel hurt the franchise, and it hurt tremendously," says Jim Silver, publisher of trade magazine The Toy Book. "The collector was not in love with Jar Jar. Hasbro has scaled back dramatically. Everybody is being much, much more conservative." (Hasbro did not return calls for this story.) Some retailers are getting out of the "Star Wars" business for good. Tiemaker Ralph Marlin & Co. won't be back, nor will KFC's Oleinik. Odds are that Lucas won't miss them. To avoid a repeat of "Menace," he sliced the number of licensees for "Attack of the Clones" by two thirds. For one thing, there will be 8 billion fewer cans of soda: Lucasfilm didn't want a soft-drink sponsor this time around, Pepsi says.

Restraint, or at least some degree of it, has also been the operative word in wooing back lost fans. With "Menace," Lucasfilm took its biggest hit in the critical college market--kids who grew up on the original trilogy but didn't feel it in their bones like their Gen-X older siblings. To them, "Menace" was especially lame because it didn't push their nostalgia buttons as hard. Worse, it arrived on the heels of "The Matrix," which instantly became their generation's benchmark of sci-fi cool. To turn things around, Lucasfilm wisely chose a low-key, grass-roots campaign built around quirky fliers hung in campus student centers. The fliers--one touts a "spacious summer sublet" on water-covered Kamino, a planet from the new film; another is a personal ad for Yoda that describes him as "little & green, seeking Zen"--direct the curious to Web sites stocked with free "Attack of the Clones" computer wallpaper and posters. The free gear is a little bit Warhol, a little bit "Ocean's 11" and, yeah, a little bit desperate. But if the idea is to update "Star Wars' " image, mission accomplished.

Lucasfilm saved its best goodies, though, for the Web geeks, a stratum of "Star Wars" fandom that, in the past, it had communicated with only via cease-and-desist orders. Last September, about a dozen Webmasters received an invitation from Lucasfilm to spend two days at Skywalker Ranch. The occasion was ostensibly the "Menace" DVD release, but everyone knew the real agenda was damage control. In exchange for a tour of the grounds, a dress-up session in genuine "Star Wars" regalia and a 20-minute Q&A with The Man himself, the attendees were to go home and play Moses to their straying Israelites. "I guess they're starting to come around to the idea that the Web is pretty powerful," says Lou Tambone of Star Sadly for Tambone, he heard all about the trip but was not invited--ironic, he grumbles, considering that he's a "Menace" apologist, while most of the invitees were not.

If all goes according to plan, of course, Lucas won't need any apologists this time. The world will find out in less than a month, and insiders believe Lucas will earn back whatever faith he lost. "When you see the new movie," says the Lucas associate, "you will see that he got it." Consider our fingers crossed.