Cincinnati’s Kenner took risk with 1977 ‘Star Wars’ toy IOU

December 25, 2017 GMT

CINCINNATI (AP) — He had one thing on his Christmas wish list.

Star Wars. Star Wars “anything.”

On the morning of Dec. 25, 1977, Matthew Fox unwrapped more than what he wanted. He got Star Wars everything.

Forty years ago, a Star Wars Christmas mostly meant jigsaw puzzles and a board game. But under Matthew’s tree that year was something the world had never quite seen before nor would see again.

It had to do with Star Wars, so it was there, for 6-year-old Matthew to open in his Dearborn, Michigan, home.

The envelope, the size of a typical board game, was emblazoned in technicolor: “Early Bird Certificate Package.”


It was an IOU from Kenner’s headquarters in Cincinnati — printed about half a million times — that once the company’s Star Wars toys were ready, a tiny plastic Chewbacca, Luke, Princess Leia and a robot called “Artoo-Detoo” would arrive in your mailbox, before anybody else on the block.


For Matthew, the early bird certificate was just a piece of paper he couldn’t play with. At least he could do something with the puzzles, he thought.

For the top brass at Kenner, however, it was the only thing they could conceive in time for Christmas ’77, which fell seven months to the day after some space opera called “Star Wars” debuted.

Christmas ’77 came about eight months after Kenner president Bernie Loomis had shaken hands with an up-and-coming director George Lucas and bought the rights to make what would soon be one of the most successful toy lines of all time.

Almost no one, not even Lucas, saw it coming — and a few months was not enough time to design and manufacturer new toys.

So Kenner did something unheard of. Now, it almost seems unthinkable.

It sold a promise.

The certificate, that gutsy gamble, paid off big time, elevating Kenner, the people who worked there and the city they called home.


The early bird certificate was actually a gamble within a gamble, one little risk within the great big risk that was Star Wars. The Kenner people saw something no one else in their industry did.

They were the last company director George Lucas and distributor 20th Century Fox approached before the sci-fi flick hit the silver screen.

Top toymakers like Mattel had politely passed. “It was greeted with a seated ovation,” joked Pete Kelly, Kenner’s then-head of sales.


It’s said the Mego representative literally pushed the Star Wars folks out the door at Toy Fair in New York that February. This Star Wars idea was crazy.

Still determined, or desperate for extra financing, the filmmakers tracked down Kenner’s Craig Stokely at the New York industry showcase.

No movie as of that date had proven to have real toy potential. Companies much bigger than Kenner had tried products without success inspired by the “Dr. Doolittle” and “Chitty Chitty Bang Bang” movies.

Most movies then came and went quickly, 10 weeks for only the biggest hits. Home entertainment systems were years away and Betamax hadn’t yet arrived in the U.S.

Kenner’s line based on the hit action television series “The Six Million Dollar Man” was pretty much paying the bills.

But in February 1977, it took Stokely just a couple minutes to believe Star Wars could reinvent the rules.

He only watched the trailer, but that was enough time to see the robots and the vehicles. He didn’t know the plot or the point. But he saw toys in every scene, in every second.

His boss, Bernie Loomis, coined a term for this: Toyetic.

Stokley’s first stop when he returned to Cincinnati would be Loomis’ office.


Loomis was a forceful man, confident and clear. Jim Kipling, Kenner’s longtime lead lawyer, calls him “lightning in a bottle.” Others call him a genius.

In the early 1970s, Loomis led the business, then a subsidiary of General Mills, to double its gross sales.

Before Kenner made the mold for C-3PO, the company had produced 150 different toys and employed as many as 4,000 Cincinnatians.

Successful ideas often hinged on hunches. Kenner operated on the goosebumps factor, and Star Wars gave them chills they couldn’t shake.

Loomis knew what he wanted: When Star Wars toys appeared on shelves, the box would say, “Made in Cincinnati.”


Loomis headed to California to secure a partnership with Lucas.

Pete Kelly heard that meeting went something like this: Lucas only shared the story. No script. It was basically Cowboys and Indians in space, Kelly said. Big block drawings hung in the California office. There was Darth Vader. There was R2D2.

Loomis and company talked it over. The design lines of the characters and vehicles were right. They easily could be manufactured as toys. The names were right. The whole thing was right.

The group negotiated terms. The advance against all royalties was $25,000. The royalty guarantee was $125,000 and the royalty rate was 5 percent. (When these terms were re-negotiated in the early 2000s, toymakers had to pay more than $300 million upfront. Today, Star Wars toys and merchandise are valued at $17 billion.)

Within a couple months, after Star Wars hit theaters, the agreement became the deal of the century for Kenner. Star Wars wasn’t a movie. It was a phenomenon.


Steve Sansweet, chairman and president of Rancho Obi-Wan, a museum of the world’s largest collection of Star Wars memorabilia, said the movie awakened something in the public.

“This was the era of Vietnam,” he said. “It was a dark era. The movies were dark. George Lucas wanted to do a movie for kids that had heroes in it. There hadn’t been many movies for kids or pitched to kids with heroes since the westerns of the ’50s.”

Cincinnati was among 32 cities to see the film on its release May 25, 1977. Only Kenner employees were invited to the special screening.

Mark Boudreaux was there. A Cincinnati kid, he was then an intern at Kenner. From the moment the star destroyer flew over his head on that big screen, his life changed. The University of Cincinnati student just didn’t know it yet.

The next year, he would be one of the lead designers on the Millennium Falcon, the “piece of junk” ship that still soars in “Star Wars: The Last Jedi.” Today, a decade and a half after Hasbro acquired Kenner, Boudreaux is the senior principal designer at Hasbro, still making Millennium Falcons.


Forty years ago, Boudreaux and his Kenner co-workers left that “Star Wars” preview buzzing with a mix of excitement and anxiety.

Why would their company license a movie just months away from Christmas, the biggest sales time of the year?

Kenner could pull off two-dimensional puzzles or games in that time, but kids wanted toys.

Designer Ed Schifman says he first mentioned the early bird certificate idea to Loomis in passing.

“Why not offer the right to purchase the product when it becomes available?” Schifman asked his boss. Loomis smiled, as Schifman tells it: “I’ll get back to you.”

Loomis announced the Kenner Early Bird Certificate Package that September.

It included a certificate good for four Star Wars action figures, a display stand, a Star Wars Club Membership Card signed by Luke Skywalker and some stickers.

The customer only had to mail in a postage-paid certificate — and wait. Toys would arrive sometime between Feb. 1 and June 1, before the pose-able toys were available in stores. And the certificate was only available to retailers to sell before Dec. 31.

That limited purchasing period was one of Loomis’ compromises with retailers as he struggled to sell the mere possibility of a product to stores. The big box retailers like Sears and J.C. Penney’s downright refused to stock it.


Kelly didn’t think much of the early bird certificate, either. But Loomis did.

“He thought it was a great idea so that meant that we at least had to present it like it was a great idea,” Kelly said. “Which we did.”

Regional retailers did bite. One Cincinnati-area Children’s Palace toy store sold 24 certificates in two weeks. Acme-Click had 20 dozen certificates on its shelves before Christmas.

Though only a few hundred thousand kits sold, Kelly still saw it as a success. It kept Kenner’s name in the same sentence with the massively popular film.

Matthew Fox received his Christmas gift, fulfilled, March 3, 1978. It’s easy for him to remember the day the four toys arrived because it was also his seventh birthday.

He raced to open then and took them to school the next day, ahead of his friends.

Kenner sold 22 million Star Wars toys annually during the run of the first three films. Supplies sold out in hours. The average kid owned 11 Star Wars toys, and Kenner enjoyed an unprecedented 80- to 85-percent market penetration.

“I think the toys were essential to making Star Wars the phenomenon that it is today ... There were toys there in the three-year period between movies that would keep the movies alive,” Sansweet said.


Some 4,000 miles away in England, a 9-year-old named Steve Evans was playing with Star Wars toys in backyards and bedrooms.

He asked for figures and ships every birthday and Christmas. He learned to recognize the Kenner company logo on the box.

“As the Star Wars story grew, I grew with it,” Evans said. “The journey of Luke Skywalker resonated with me as a kid trying to work out life, family, friends, school, and knowing right from wrong. It was - like all the best tales - incredible but relatable.”

Since 2014, Evans has been on Hasbro’s Star Wars team.

He said the early bird certificate feels like “it really represents the psyche of all of us Star Wars fans.”

“If it’s Star Wars, we want it,” he said. “No matter how crazy it sounds.”

Forty Christmases later, the early bird certificate is a coveted collector’s item.

“I would imagine the amount made was limited, which conjures this ‘holy grail’ type mystique to it,” Evans said. “Also, the fact that it was virtually all paper products adds to its lore. It’s very unlikely that someone will find one undamaged today.”

Bill Wills was 7 when “Star Wars” played in the theater on Main Street in Hamilton, not far from his hometown of Trenton. He doesn’t remember the early bird certificate package from those early years, but he has one now.

“Well, if you’re into the Kenner action figures, this is where it all started,” he said, holding an unopened early bird package he picked up for $300 about 20 years ago. “This is what started everything.”

He expects this early bird package is worth about $7,500. If he had bought it at Shillito’s in 1977, it would have cost him $11.99.


Information from: The Cincinnati Enquirer,