EXHIBIT 99.1

NEWS RELEASE
Galoob Toys, Inc.
                                   CONTACT:   ROGER KOWALSKY  
                                              EXECUTIVE VICE PRESIDENT
                                              AND CHIEF FINANCIAL OFFICER
                                              500 FORBES BOULEVARD
                                              SO. SAN FRANCISCO, CA  94080
                                              PHONE:   (415) 952-1678, EXT. 2282
                                              FAX: (415) 589-5092
                                 
                                              JEANNE COLE, LUCASFILM LTD.
                                              PHONE:  (415) 662-1962

                                              FOR IMMEDIATE RELEASE
                                              OCTOBER 14, 1997


                               GALOOB TOYS SECURES
                         SMALL-SCALE-TOY RIGHTS FOR THE
                           NEXT THREE STAR WARS MOVIES

                LUCAS COMPANIES TAKE MAJOR EQUITY STAKE IN GALOOB

SO. SAN FRANCISCO, Calif. (October 14, 1997) -- Galoob Toys, Inc. (NYSE: GAL)
today announced that it has entered into an exclusive, worldwide license with
Lucas Licensing Ltd. to make small-scale figures, vehicles, playsets and
accessories for the next three Star Wars movies. Building on a relationship that
began in 1992 with the highly successful introduction of Star Wars Micro
Machines(R), this Star Wars license will last well into the next decade. In
addition, Galoob's current rights to market toys based on the original Star Wars
trilogy have been included in the new license.

In a separate agreement Galoob has also acquired long-term preferential
negotiating rights from Lucasfilm Ltd. for the same categories of toys based on
new Lucasfilm movies.

"Star Wars is the great long-term growth opportunity in boys' action toys for
years to come," said Mark Goldman, president and CEO of Galoob Toys, Inc., "and
it is extraordinary for a company of Galoob's size to be given an opportunity so
large. These arrangements fundamentally change Galoob, creating a stability and
an assured access to growth previously unavailable to us."

"Galoob has shown outstanding creativity and an extraordinary ability in this
toy category," said Gordon Radley, president of Lucasfilm Ltd. "Our long-term
commitment to Galoob in this toy category represents a very large investment in
Galoob's exciting future, and we look forward to the opportunity of working with
Galoob not only on Star Wars but on other Lucasfilm movies."

In consideration of these agreements Galoob has granted the Lucas companies
warrants for slightly less than 20% of Galoob's issued and outstanding common
stock, equal to approximately 3.6 million shares as of the closing date, at an
exercise price of $15.00 per share. The new Star Wars agreement also calls for
advance payments against future royalties of $140 million payable as the three
new films are released.

"Galoob's leadership in small-scale toys is undisputed," said Howard Roffman,
vice president of Lucas Licensing Ltd. "We are looking forward to working with
Galoob on the new Star Wars films to bring the magic of Star Wars to a new
generation of children around the world."

"Star Wars is the most successful film-based merchandising program in history,"
said Gary Niles, Galoob's executive vice president, marketing. "With the highly
anticipated new Star Wars films, we expect growth of a magnitude greater than
ever experienced in our company's history."

The cornerstones of the Star Wars licensing program have been the categories of
basic toys and games, small-scale toys, which are the subject of the new
agreement with Galoob, video and computer games, and a broad-based book and
comic publishing program.

Galoob Toys, Inc. designs, develops, markets and sells high quality toys
worldwide. For more information about the Company and its products, visit
Galoob's World Wide Web site at http://www.galoob.com.

Lucasfilm Ltd. is one of the leading film and entertainment companies in the
world. Lucasfilm Ltd.'s businesses include George Lucas' film and television
production and distribution activities as well as the business activities of the
THX Group. Lucasfilm's feature films have won 17 Oscars and received 56 Academy
Award nominations, and its television projects have won 12 Emmy Awards.

The Lucas group of companies also include LucasArts Entertainment Company, Lucas
Digital Ltd., and Lucas Licensing Ltd. LucasArts Entertainment Company is a
leading international developer and publisher of entertainment software, whose
games have won critical acclaim with more than 100 industry awards for
excellence. Lucas Digital Ltd., which consists of Industrial Light & Magic (ILM)
and Skywalker Sound, services the digital needs of the entertainment industry
for visual effects and audio post-production. ILM has won 14 Academy Awards for
Best Visual Effects and 12 Technical Achievement Awards. Skywalker Sound has
been honored with 10 Academy Awards. Lucas Licensing Ltd. is responsible for the
licensing of all of Lucasfilm's film and television properties.




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