Trend, Cantor engaged in intense lobbying
As lawmakers on Capitol Hill worked to reconcile the House and Senate versions of financial reform legislation on Thursday, it appeared likely the bill would emerge still containing a ban on the trading of film futures.
Companies behind two proposals, the Trend Exchange and the Cantor Exchange, have been engaged in intense lobbying, but they have so far failed to draw support from any lawmaker willing to pull the provision from the final bill.
One of their last remaining hopes is to have the House and Senate conference committee scuttle an entire section of the Senate bill that would force banks to spin off the lucrative practice of derivatives trading. A tiny provision that bans box office trading was included in that section at the request of the Motion Picture Assn. of America and a coalition of other industry groups opposed to the film futures concept.
But even as conferees were at an impasse on Thursday over the derivatives section, it was not considered likely that the provision would be dropped from the final bill. Lawmakers were hoping to wrap up the reform bill before the July 4 break next week.
The MPAA and the two exchanges declined to comment.
Media Derivatives Inc.’s Trend Exchange received approval earlier this month from the Commodity Futures Trading Commission to trade in contracts tied to box office performance. A like proposal from Cantor Fitzgerald, the Cantor Exchange, is expected to gain approval by the commission’s June 28 deadline.
Robert Swag-ger, CEO of the Trend Exchange, has hoped that the approval of federal regulators will give the futures proposals momentum on Capitol Hill. But Swagger has railed against “special interest politics” and is being outgunned by the major studios’ stronger lobbying resources. Earlier this week, Swagger said that while the plan has gained a sympathetic hearing among some lawmakers, he has been told that it is “not worth the political capital” to champion futures.
Some on the CFTC said they had limitations on the legal footing they could use to reject the contracts and that the Trend Exchange met all of the necessary standards. The B.O. contracts got the greenlight in a 3-2 vote.