In 1971, he and his wife moved to Malibu, California and produced their first film, Steelyard Blues, starring Jane Fonda and Donald Sutherland.

The couple then produced Taxi Driver (which would go on to win the Palme D'Or at the 1976 Cannes Film Festival) and Steven Spielberg's Close Encounters of the Third Kind.

[5] Mercury planned to produce three to five films a year in the $10-million range[5] with operating and development costs to be paid by ABC Motion Pictures while production financing was provided by the major studios.

[5] In 1986, he teamed up with Michael Douglas to launch a new company to produce independently financed features, and has option to buy Douglas' company Big Stick Inc.[6] In 2006, Mercury Entertainment was merged with Debmar Studios to form Debmar-Mercury (now a wholly owned subsidiary of Lions Gate Entertainment).

[8] In December 2007, Close Encounters was deemed "culturally, historically, or aesthetically significant" by the Library of Congress and selected for preservation in the National Film Registry.