There is no future for film futures.
The financial reform package, which includes a short provision banning the trading of contracts based on box office receipts, is headed to President Obama’s desk, after the Senate on Thursday passed the Wall Street overhaul.
It leaves the two exchanges that had planned to trade in box office futures, the Trend Exchange and the Cantor Exchange, without what was to be their signature product.
Richard Jaycobs, president of the Cantor Exchange, said his company would be announcing new products shortly, but declined to identify them. “Certainly it is disappointing that movies futures will not be one of them,” he said shortly after the Senate vote.
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.”
A spokeswoman for the Trend Exchange said it would have no comment. Its CEO, Robert Swagger, had also suggested that other products were a possibility — markets in DVD returns, for example. But there are doubts about how far such proposals would go given the industry opposition that arose just as the two exchanges were about to launch. Swagger earlier had broached the possibility of legal action against the chief opponents of box office trading, the Motion Picture Assn. of America and its interim CEO, Bob Pisano.
In a statement, Pisano said they were “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,” he said. “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.”
In March, it looked as if the two exchanges were on their way to approval from the Commodity Futures Trading Commission. But then the studio lobby cried foul, raising objections and launching a campaign to halt the trading before it started. The MPAA was joined in opposition by the Directors Guild of America, the Independent Film & Television Alliance, IATSE and the National Assn. of Theater Owners.
Backers of the box office trading proposals have charged that they fell victim to the influence of the MPAA and the studios on Capitol Hill. According to campaign finance statements, political action committees of Time Warner, Sony Pictures Entertainment and Walt Disney Productions Employees PAC in May contributed a total of $8,000 to the reelection campaign of Sen. Blanche Lincoln (D-Arkansas). She was responsible for inserting the box office trading ban into her version of financial reform that passed the Senate Agriculture Committee on April 21. The PACs had contributed to her campaign last year as well.
Jaycobs said on Thursday, “How it became a legislative ban is a story that may be worthy of a book if not a movie.”