Hollywood’s studio lobby was unable to stop federal regulators from approving trading of commodities based on box office receipts, despite an all-out effort to stop the proposal before it gets a chance to start.
This still doesn’t mean that the trading will go forward, as the Senate version of financial reform legislation included a provision banning the practice. So the team behind the Trend Exchange can be expected to put pressure on lawmakers to keep the ban out of the final version of the bill, currently in conference committee.
The victory was narrow: The Commodity Futures Trading Commission voted 3-2 to approve.
In a statement, the commission said that it concluded that the box office contracts “are based on commodities, are not readily susceptible to manipulation and serve an economic hedging purpose.”
The Motion Picture Assn. of America argued just the opposite.
And Commissioner Bart Chilton, who voted against it, said that the majority gave too much leeway to the interpretation of the Commodity Exchange Act.
“You could have death pools or terrorism contracts,” he said. “While the act gives us wide latitude…I don’t think Congress ever intended thhat we would do this type of thing.”