The 1981 Writers Guild of America strike forced the project to languish in development for more than a year. Begelman left MGM as several of his projects had performed poorly at the box office; this put all of his future projects, Buckaroo Banzai included, in jeopardy. Begelman formed Sherwood Productions and exercised a buy-out option with MGM for the Banzai script. He took it to 20th Century Fox who agreed to make it with a $12 million budget. Mac Rauch ended up writing three more drafts before they had a shooting script.