The story is about a group of travelling jousters and performers who are cracking under the pressure of personal problems and failure to live up to their ideals. They joust on motorcycles in pseudomedieval armor, allowing for some bizarre images and excellent stuntwork. The members of the troupe adopt names and costumes derived from a combination of the Arthurian cycle and medieval legends (for instance, there's both a Merlin and a Friar Tuck), and portray these roles in their lives together.
After a slick promoter offers to "handle" the group by arranging gigs at state fairs and other large events, the group divides into factions. Some follow the promoter, hoping for money, security and fame, while the quixotic King Billy refuses to compromise on the ideals with which he founded the group. Eventually the factions reunite in a grand melee to decide who will lead. The eventual downfall of the group is intended to mirror the inner conflicts that ultimately brought down Camelot.
In terms of resonance with traditional Arthurian stories, the character of Billy (King William) combines aspects of King Arthur and of the Fisher King. The latter is a medieval Christian allegory; this is reflected in the movie, when the character Morgan refers to Billy's crown as "a crown of thorns".
George Romero has claimed the medieval hobbyist organization, the Society for Creative Anachronism, to be one inspiration for the film. Thematically, the characters' philosophical conflicts between money and security on the one hand, and being true to their vision on the other, echoes the situations of independent filmmakers, who often must reconcile financial concerns with creative control.
The film was initially deemed too long, resulting in a 145 minute runtime being edited to 102 minutes in its German release.
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