With the Senate’s passage of financial reform, including a ban on the trading of film futures, the whole idea of a market in the studio’s weekend box office totals is dead.
Bob Pisano, interim CEO of the MPAA, issued this statement:
“Speaking on behalf of a coalition that includes the Directors Guild of America (DGA), the Independent Film and Television Alliance (IFTA), the International Alliance of Theatrical Stage Employees (IATSE), the Motion Picture Association of America (MPAA) and its member companies, and the National Association of Theatre Owners (NATO), I want to thank the Congress for approving this measure.
“After proposals for these speculative gaming platforms came to light, our industry came together to oppose these plans with an unprecedented coalition that included entertainment industry workers, creators, independent producers and distributors, studios and theater owners. We are pleased with final passage of this important legislation. Congress has acted decisively to ban proposed trading in box office futures and to make important reforms in the country’s financial regulatory system. We applaud the work the bill’s authors have done, and of course, the many Senators and Members who supported the provisions to prevent movie futures trading.”
Richard Jaycobs, president of the Cantor Exchange, said in an interview that the passage certainly was “not unexpected.” On June 28, the day that they received approval from federal regulators to trade in box office contracts, they announced that they would not actually list the contracts, knowing that the legislation was coming.
“Cantor Exchange will be announcing shortly new products,” he said. “Certainly it is disappointing that movies futures will not be one of them.”
He added, “We still believe that a great opportunity here has been missed to improve financing in the industry. Obviously others had a different opinion.”
In March, it looked as if Cantor and another exchange, the Trend Exchange from Media Derivatives Inc., were on their way to approval from the Commodity Futures Trading Commission. But then the studio lobby cried foul, raising objections and launching an eleventh hour campaign to halt the trading before it started. Although the commission ended up approving the creation of both exchanges and the trading in box office contracts, the MPAA lobbied lawmakers and successfully got a passage in the financial reform bill that specifically bans such contracts.
Jaycobs said, “How it became a legislative ban is a story that may be worthy of a book if not a movie.”