David Lynch’s indie empire

• Originally published in the October 2025 issue of Sight and Sound

“Money’s a funny thing,” David Lynch wrote in his 2018 memoir Room to Dream. “The whole point of having money is to feel free, and relatively speaking, I guess I have some money now, but I’ve never felt free.” If Lynch lived in protracted pursuit of what he called “the art life” – broadly speaking, drinking coffee, smoking cigarettes and realising his far-out visions – it depended on what you would have to call his business life.

In cinema, his ability to freely create was dependent on the financial terms that lay behind each project. Making his 1984 version of Dune, his third feature film, taught him an indelible lesson on that score. Having ceded final cut to producer Dino De Laurentiis, he was horrified when his three-hour cut was butchered to fit standard blockbuster proportions. “Dune cut me off at the knees,” he observed in the 1997 book Lynch on Lynch. “Maybe a little higher.”

It was a one-time-only mistake for Lynch. Thereafter, he always retained final cut on his cinematic features in return for disciplined and frugal adherence to the financial conditions that, generally, he let his producers secure.

“David is someone who really respects the budget once it’s decided,” says Mary Sweeney, who worked increasingly closely with Lynch as an editor, writer and producer from Blue Velvet (1986) to Inland Empire (2006) and was his third wife. Nearly five months after his death, she still speaks about him in the present tense. “He doesn’t want to be in a place where he needs to ask for more money. He works within the parameters of what he starts with.”

This was a moral imperative for the director, suggests Neal Edelstein, one of his producers on The Straight Story (1999) and Mulholland Dr. (2001): “David was more of a handshake guy than a contract guy. Meaning the old days of: you honour your word.”

His fight to claw back artistic freedom began with Blue Velvet, again funded by De Laurentiis. But this time he had final cut, by agreeing to slash both the budget ($6 million) and his salary in half. Left to work unmolested, he produced the most complete example yet of what would come to be defined as ‘Lynchian’: a dark, surrealist reimagining of classic Americana filtered through the aesthetics of his fetish decade, the 1950s.

Blue Velvet was a moderate commercial success. But Lynch still struggled to finance his projects, particularly after his benefactor De Laurentiis quit his debt-ridden studio in 1988. It was around this time that Tony Krantz, an agent with Creative Artists Agency, was – in his own words – “all over David like a cheap suit” to develop something for television. An ambitious operator in his late twenties who had been fast-tracked by CAA co-founder Michael Ovitz, he saw the future of the medium in Lynch: “I had this vision of David, and myself through David, transforming television and making it better.”

Lynch was virtually alone in terms of cinematic directors who saw artistic potential in TV, the lesser medium, at the time (although he did have a few aesthetic qualms about it). In general, he was subject to the same scrabble for funding as all indie operators in the years before Sundance and Miramax became major forces in the 1990s. But, having begun his career in the 1970s, perhaps his network was a touch wider than most, extending to established operators like De Laurentiis and Mel Brooks (for whom he’d directed The Elephant Man, 1980). He no longer had to lean, like Spike Lee, on public grants; or crowdsource a film from private investment groups full of orthodontists, like the Coen brothers did for Blood Simple (1984).

He and his co-writer Mark Frost had already attempted to sell NBC a sci-fi-tinged series called ‘The Lemurians’. But Krantz worked on him to think closer to home. “Because he came from Missoula, Montana, he was a man of the people. And I would say to him: “The show that you should do is about regular people.”

The result – co-written with Frost and sold to the network ABC – was Twin Peaks. Matching the leftfield material on the screen was an atypical financing structure: ABC, through the licence fee, paid 70 per cent of the budget with the remaining 30 per cent “deficit-financed” through foreign pre-sales. TV magnate Aaron Spelling’s newly acquired company Worldvision was handling the latter part; because it needed hits and was keen to get into bed with a much-vaunted director, Krantz managed to retain full ownership rights in perpetuity for Lynch and Frost for any future syndication. This was rare for first-time showrunners.

With the show fully paid for upstream, the deal further incentivised Lynch to run a tight ship, says Krantz: “He saw money that he could make by holding the line of production. Every dollar he didn’t spend would essentially go into their pockets.”

But if the financing structure focused Lynch’s creativity, television also provided a broader canvas for his imagination as Krantz had foreseen. “I said to him: ‘What’s interesting about television is that it’s a story that continues like a novel. So you can tell stories, David, that are more in depth and more detailed than a movie.’” The new medium liberated Lynch and he in turn enriched its vocabulary though the looser nature of the TV series became a problem for Twin Peaks once the director was no longer closely supervising it in its second season.

***

Money helped consolidate Lynch’s art life: he had bought the pink-hued Beverly Johnson House, designed by Lloyd Wright, at 7017 Senalda Road, Los Angeles, as his principal residence in 1986; he later acquired two adjacent properties that became his recording studio and production company headquarters. While not ostentatious, he appreciated the beauty and pleasure wealth gave him access to: he and Krantz would toast their successes with bottles of the Bordeaux grand cru Château Lynch-Bages.

But if he was securing his own creative outpost, he still had to battle for freedom outside of it. It was the French who gave Lynch the closest thing to carte blanche he ever received. In 1990, the billionaire industrialist Francis Bouygues founded the production company Ciby 2000, in a late coup de coeur for cinema at the end of his life. Producing films for the likes of Jane Campion, Pedro Almodóvar and Emir Kusturica, as well as Lynch, the idealistic aim was to nurture and give world-class auteurs total artistic freedom except that in French legal terms, it wasn’t just idealism: the law guaranteed directors final cut because they had to sign off on their films as works of art.

You didn’t need to sell that idea hard to Lynch. He had been headhunted for Ciby 2000 by its talent scout Pierre Edelman, a mercurial chancer who hobnobbed with Jack Nicholson and the New Hollywood set in the 1970s, possibly spent some time in prison, and sometimes lived out of his Bentley convertible. He had befriended Lynch as a journalist on the set of Dune; his boss Bouygues had been blown away by the director’s 1990 Palme d’Or winner Wild at Heart. The company quickly agreed to finance Twin Peak: Fire Walk with Me (1992) for around $10 million; its policy of not imposing creative stipulations meant no interference with Lynch’s decision – which later alienated part of his fanbase – to pare back the series’ story into a harrowing focus on incest.

Lynch soon agreed a $60 million, three-picture deal with Bouygues. This was despite a rocky initial meeting in Paris; the director stormed out when two company executives – in his words “the smarmiest lowlives” – sniggered as he pitched his cherished surrealist project ‘Ronnie Rocket’. Edelman persuaded Lynch to return to the room. But the industrialist and the filmmaker had a natural affinity. Both were sharp judges of character: “One of Francis Bouygues’s great qualities was working out if someone had an inner strength whether they had something to say or if they were a fraud,” says Marina Girard, Ciby 2000’s deputy managing director, who oversaw film production. 

Lynch passed the test; and just as he did when he met actors informally to divine their personal qualities, he made evaluations of his own. “He said to me he trusted his representatives for the financial negotiations with distributors or other companies,” says Girard. “But he wanted to meet these people briefly, just to talk about something else. He could feel people: he knew if they were honest.” The fact that Bouygues was a builder, a man of physical materials like Lynch, must have worked in his favour. When they closed the deal, he offered the director a tour of any of his Paris constructions, including the recently completed Arche de la Défense; Lynch asked instead to see the Paris morgue.

The contract also listed Lynch as a co-producer on his own projects, increasing his financial participation and giving him a long-term say in how they were distributed; Girard still manages the worldwide rights to his French-funded work today. The neo-noir Lost Highway (1997) was the first project under the three-picture deal, approved despite the challenging narrative rift in which the film transmogrified halfway through from the perspective of uxoricidal jazz saxophonist Fred to that of young buck auto-mechanic Pete.

Deepak Nayar was rising within Lynch’s regular crew around this time. Having arrived from India a decade earlier and with a couple of small producer credits to his name, he started out as the director’s driver on Twin Peaks and was promoted to assistant director on Wild at Heart and Fire Walk with Me. Climbing to producer on Lost Highway, Lynch nicknamed him ‘Hotshot’ because of his aspirations. Nayar was one example of how the filmmaker’s aptitude for cultivating people who intuitively grasped his vision and needs; Sweeney, Edelstein and Sabrina Sutherland (his producer on Twin Peaks: The Return) all came up in a similar way. Lynch used to canvas Nayar’s opinion even as a chauffeur. 

“A brilliant last-minute thinker”, Lynch was constantly alert to creative opportunities, says Nayar. The producer cites one afternoon leaving lunch on the set of Lost Highway in the director’s pick-up truck. Another driver began to tailgate them, and Lynch said: “You know what I wanna do? I want to let him pass and then chase him down.” Which, of course, became an unforgettable skit in the film.

Accommodating these swerves became Nayar’s speciality after a decade under Lynch’s wing: “I began to understand where he might want to add things. And it was important that you tried to support him by saying, ‘Could we reschedule this for a bit later?’ Or, ‘Can we delete something else so we can add that?’ They made a running joke of the multiple moving targets on Lynch sets by placing $1 bets on when they would wrap on a given day.

Lost Highway was not a financial success, though its narrative innovations were significant in Lynch’s evolution and ahead of their time generally. And though he was an increasing cultural presence, the fragility of his financial backing was highlighted when Ciby 2000 folded in 1998 after the Bouygues Group switched its focus to telecoms. Lynch, on a pay or play deal for the three promised films, settled out of court.

Once again, he relied on the pollinator Edelman, who wore an apian pinbadge on his lapel to tout his company Bee Entertainment, to find a new flowerbed for his next film, The Straight Story. The director read the script – written by Sweeney in collaboration with John Roach – in June 1998. Edelman found a buyer, StudioCanal, in July – an improbable feat given the inviolable summer holidays in France; Lynch was shooting by August. StudioCanal gave him the same cosy terms as Ciby 2000.

While Lynch collected producers who understood his needs, Sweeney was the closest: the mother of his third child, Riley, and a highly attuned editor in touch with his sensibility. This had led her to develop The Straight Story, which was rooted in their shared Midwest upbringings. Nayar fell by the wayside during this period, after a budgetary dispute over the film but remains grateful to his mentor to this day.

Given Lynch’s reputation as a creative powerhouse, drawing everything to him, he was also sometimes influenced by his collaborators. For several months in the late 90s, Krantz and Edelstein had been working on the director to return to television; he began toying with a story about a young actress coming to Hollywood, originally intended to be a Twin Peaks spinoff for the Audrey Horne character. Krantz again negotiated favourable conditions from the network: a handsome $7 million budget for a 90-minute pilot.

But, crucially, Lynch lacked final cut. After he turned in a two-hour version, ABC complained that the pilot was too slow and requested a list of 30-odd changes. The bad news was relayed at a packed meeting in which dozens of people were present, including Edelstein. “It was a conflict between someone of David’s level of creativity, who needed control,” he says, “and studio executives, who are looking at things in a more mainstream, structured way.” Krantz, who also felt this version of Mulholland Dr. was “flabby”, sided with ABC and managed to get Lynch to accede to the changes.

When ABC rejected the pilot even after the overhaul, Krantz, Sweeney and Edelman salvaged it by negotiating with StudioCanal to buy it from ABC’s parent company, Disney. According to Krantz, Lynch nearly scuppered the deal by at one point refusing to work any further on Mulholland Dr., saying the sets had been destroyed. “I felt that David was behaving in bad faith, and the excuse about the sets was specious,” he says. He relayed Disney’s threat of a lawsuit; but his loyalty to Disney rather than Lynch, and to the deal over art, was unforgivable to the director, who broke professional ties with Krantz.

Krantz claims Lynch only resumed work on Mulholland Dr. with legal action hanging over him. But Sweeney has another view of this chaotic interlude and how Lynch ultimately emerged to triumphantly reshape the material as the modern classic it became. “Many times I’ve seen him face obstacles with his work. And he takes it very seriously. It wasn’t cold feet with Mulholland Dr., just a deep depression at this obstacle to overcome,” she says. “But it was like Frank Lloyd Wright when his house burnt down. He asked for a drawing pad and started sketching his new house.”

***

When Twin Peaks: The Return was in its inception in 2014, Lynch hadn’t made any long-form work for nearly a decade. But he and Showtime, the TV network developing it, were at loggerheads. They wanted a mere nine, tightly budgeted episodes; Lynch, conceiving of it as an extended film, wanted an open-ended agreement that he could make more. But he couldn’t say how many.

When Showtime’s budget fell short of what Lynch regarded as an acceptable minimum, it looked like Dale Cooper might have to wait another 25 years. Sutherland, the producer, remembers their talk: “David said: ‘I think I’m out.’ And I said: ‘I’m out too. I can’t make this the way you want it made.’” But they resolved to make Showtime a final ultimatum about their wishlist. “David said: ‘If they say no to anything, are you good with walking away?’”

Sutherland was far from a yes-woman for Lynch. Again rising up through his production structure and taking over senior duties following the breakdown of Sweeney’s relationship with the director in the mid-00s, she regarded herself as the “bad cop” among his producers. “He would make this cringe face when he saw me coming,” she says. “Because he knew I was all business, giving him bad news or telling him what he couldn’t do.” In the much-circulated clip of Lynch losing his rag on the set of Twin Peaks: The Return because of the lack of time in which to “get dreamy”, it is Sutherland – off camera – he is berating.

But several potential Lynch feature projects went begging during this period, whether from lack of funding, or his unwillingness to get involved in anything with the slightest whiff of compromise. Among them were a biopic of satanically endorsed blues guitarist Robert Johnson, and the LA fantasia Antelope Don’t Run No More.

But Lynch appreciated that he needed corralling, especially as he made a late-career return to experimentalism. Cobbled together in bursts of improvisations, working with the spontaneity and freedom digital equipment offered, Inland Empire had been a “creative rejuvenation” in Sutherland’s eyes. But she was the one who ensured it was an exhibitable feature film by doing the administration needed to give this impromptu art project the proper legal form.

Edelstein and Krantz both feel that Lynch drifted too much during this period and would have benefited from tighter chaperoning. “I know I could have been incredibly useful to him,” says Krantz. “He could have done so many more works of art. But he didn’t have anybody like me who could be his face of business to the entertainment world.” Perhaps the drawback of so many of Lynch’s producers emerging from within his own ranks was that they were less able to forcefully represent him within the Hollywood infrastructure.

Even the French were scared off by Lynch’s late bolt for total creative freedom. Inland Empire was the last of his projects financed by StudioCanal, and its extreme fragmentation and low financial returns seemed to kill any further interest on that side of the Atlantic. Not that this worried him: his output in other media, from painting to furniture to music, was prodigious. Between 2001 and his death, he made over 50 short films – the majority no-budget, presumably self-funded punts that allowed him to freely spelunk into his imagination. Not only did the digital era open up this guerrilla-style modus operandi, it allowed him to release films on his own website and, later, on YouTube. This freed him from old obligations, says Edelstein: “The distribution component was something he couldn’t control. And that drove him nuts to some degree.”

But it’s doubtful whether Lynch would have accepted Krantz’s or anybody else’s terms. In 1997, Edelstein and Sweeney had already attempted to set up a production company, Picture Factory, that was intended to provide a conduit for work for Lynch to produce or direct. One project Sweeney tried to set up was an adaptation of Cormac McCarthy’s 1992 novel All the Pretty Horses – but she couldn’t get traction from his agency CAA to back him on a big commercial venture. “People are afraid of David,” she says, “And if there’s big money or big stars behind a project, he doesn’t really like it.” The rift between art and commerce remained too great; Picture Factory never produced a film.

In the end, though, Sutherland threaded the needle for Twin Peaks: The Return. Faced with the possibility of Lynch walking out, Showtime caved in to his demands for a flexible number of episodes – only stipulating a fixed $40 million budget (his largest ever). And so the door opened for what would be a last, 18-hour hurrah of untrammelled creativity. 

Lynch liked the new wiggle room of this film/series hybrid: he later set up another such project at Netflix, titled ‘Unrecorded Night’. But the pandemic stopped production in its tracks, and the director – diagnosed with emphysema in 2020 – halted any further movement on it because he was afraid of catching Covid. Right before the director’s death, Lynch and Sutherland were ready to roll again. “I had already contacted everybody to say: ‘Hey, we’re getting the band back together and we know how we’re gonna work,” says the producer.

It wasn’t to be. As fire tore through the mountains overlooking Los Angeles’ pit of commerce in January, Lynch passed away. But his great transcendental ideas stream remains, with all the creators who follow in his wake inspired by his example to chase his mythical big fish still swimming there: the uncompromised art of their dreams.

David Lynch: The Dreamer plays at BFI Southbank in January.