Special effects artist Richard Edlund, who won an Oscar for his work on Star Wars in 1978, was arguing. Cannon Films co-owner Menahem Golan was arguing back. Edlund was insisting the 64 planned effects shots for Cannon's Masters of the Universe, a live-action film based on Mattel's He-Man toy line, had been grossly miscalculated during pre-production and that the film would likely need nearly double that number. Golan screamed that he was being bled dry.

Edlund would later recall that Golan had "fun" when haggling, although he probably was having less of a good time trying to keep Cannon afloat. The company would soon fold, with Masters of the Universe being one of the last casualties of their budget-cinching slate. Released on August 7, 1987, it made an underwhelming $5 million its first weekend. Some 30 years after its debut, fans of the franchise continue to debate whether it was an earnest attempt at a fantasy spectacular or a misguided cash-in for a toy line that was already waning in popularity.

According to executive producer Edward Pressman, who was doing publicity for the film in 1987, the He-Man phenomenon began when Mattel was shown a rough cut of the 1982 Arnold Schwarzenegger film Conan the Barbarian. Having considered licensing the film for toys, Mattel executives were put off by the amount of violence in the footage and backed away from the deal. It would be easier to simply create their own sword and sorcery epic, with characters and confrontations molded into age-appropriate settings.

He-Man debuted in 1982, a larger, steroided alternative to the comparatively puny G.I. Joe. With his bowling-ball deltoids and modest loincloth, He-Man resisted the ambition of rival Skeletor to take over their shared home world of Eternia. To populate toy aisles, each had a supporting cast of allies and a host of vehicles. More than 120 million figures were sold; a syndicated cartoon kept adolescent eyes glued to screens.

A tie-in movie was a no-brainer for Mattel; the company petitioned studios via their relationship with Pressman (who had produced Conan) to take a risk on a big-budget feature. Estimating the movie would cost about $40 million, most studios declined. Realizing the risk was too great, Mattel approved a more affordable premise. Instead of staging the action on Eternia, He-Man would have to travel to modern-day Earth in order to retrieve a Cosmic Key that could release the Sorceress, a guiding light of the planet who had been captured by Skeletor.

Pressman eventually piqued the interest of Warner Bros. with the reworked idea. The studio offered a $15 million budget; Cannon, which was trying to establish itself with more expensive schlock like the Sylvester Stallone arm-wrestling drama Over the Top, offered $17.5 million. Mattel and Pressman agreed to the bigger deal and went with Cannon.

Dolph Lundgren, a Swedish actor and athlete who had studied chemical engineering at MIT, was a towering presence who had impressed Hollywood as stoic Russian Ivan Drago in 1985's Rocky IV. Though producers thought he'd be perfect for the part of He-Man, Lundgren wasn't convinced.

"I thought about it for months and months," the actor told Starlog in 1987. "Masters is one of those films where if you didn't do it right, it would be a disaster and everyone would laugh at you for another 20 years." After he eventually signed on, Lundgren packed on additional muscle until he looked remarkably like the action figure.

Warner Home Video

Director Gary Goddard, who had overseen a Conan stage show for Universal and was hired by Pressman, saw in Lundgren a perfect physical specimen—although his Swedish accent had remained thick. Goddard hoped to perhaps dub the actor with another performer during looping sessions, although such extravagant expenditures would soon prove impossible.

One compromise Goddard was unwilling to make was setting the film entirely on Earth. The script originally opened with a beaten, weathered He-Man imploring a suburban family to help him. Goddard insisted the film be book-ended with scenes on Eternia, an economical way of honoring its fantasy elements. Sets were constructed so that Skeletor (Frank Langella) could luxuriate in an ornate throne room, barking orders at subordinates and plotting against He-Man. More expensive effects—a stop-motion Battlecat, or a wire-strung Orko, the hovering wizard sidekick—were left in the toy box.

Goddard and Pressman planned on shooting 13 weeks and wound up shooting for 20. Lundgren, described by most everyone who encountered him as a friendly man, struggled with his dialogue and spent his time off-camera pumping dumbbells. Langella's make-up required frequent attention, his prosthetic teeth never quite fitting right. Bounced checks from Cannon, which was suffering from a string of flops, became a weekly ordeal.

When Goddard needed to shoot the climactic fight between He-Man and Skeletor, he was reduced to a stripped-down set shot in the dark, a casualty of depleted funds. (Mattel tossed in the remaining half of their $1.5 million guarantee in order to keep shooting going.) Goddard had originally intended to make his film a grand tribute to comic book artist Jack Kirby and his distinctive space opera style. He would eventually have to be satisfied with getting the film completed at all.

Warner Home Video

The delay in getting a studio interested in Masters of the Universe had unfortunate consequences. By the time the film was released on August 7, 1987, interest in the toy line had waned considerably. Had it been released in 1985, there's no telling how frenzied kids might have reacted. Years later, it was bested in its opening weekend by the Emilio Estevez comedy Stakeout.

Reviews were middling. Johanna Steinmetz of the Chicago Tribune was one of the rare critics to acknowledge the filmmakers' efforts. "It breaks no new ground," she wrote, "but neither will you demand your money back, unless you feel acutely deprived of hero Dolph Lundgren's less intelligible lines.

"European-born Lundgren, who played a Soviet boxer opposite Sylvester Stallone in Rocky IV, here has the role of He-Man. He can ripple his muscles with the best of them but has trouble getting his Teutonic tongue around such complex sentences as 'I don't want innocent people to die'—to which his nemesis Skeletor responds, 'Well said, He-Man,' inspiring some scattered laughter in the audience."

None of this deterred Cannon, which was in its death throes but continued to put its best foot forward. At that year's Cannes Film Festival, Golan announced that Masters of the Universe 2 would go into production shortly. With Lundgren unwilling to reprise the role, they hired surfer Laird Hamilton for the lead and began constructing sets. When Mattel refused to participate, director Albert Pyun repurposed them for a low-budget Jean-Claude Van Damme vehicle titled Cyborg.

Decades later, movies based on toy lines are no longer uncommon. Hasbro has made vast fortunes with films inspired by Transformers and G.I. Joe. A revamped He-Man film has been in the works for years, though no definitive release date has been set. In 2010, Lundgren expressed his desire to join the project, although he would like to have more input on his wardrobe.

"I think it's a good idea," he told IGN. "I think He-Man is a cool character, and I had fun doing [the movie]. I wouldn't want to take my shirt off again for three months, wearing that … diaper or whatever it was I was wearing, loincloth. I'd rather play the king. But yeah, good idea."