WASHINGTON — It looks as if box office futures trading will be stopped before it gets a chance to start.
A House-Senate conference committee”s final approval Friday morning of a ban on such trading created a classic picture of agony and ecstasy among the two industry camps battling over the issue in D.C.
“We are heartened by the conference committee”s actions and look forward to the full House and Senate approving the legislation,” Bob Pisano, the MPAA”s interim CEO, said in a statement following the committee”s vote.
As expected, conferees reconciling financial reform legislation kept in a provision approved earlier by the Senate that would bar film box office trading entirely. They did so shortly after midnight Thursday following marathon negotiations on a controversial derivatives section of the package to which the B.O. provision was attached.
The process will be finalized next week when Congress votes on the final reform package hammered out by the committee. President Obama said he is eager to sign the bill before July 4.
In the end, no member of Congress stood up to oppose the trading ban provision buried deeply within the massive bill. The conference committee, in its passage of financial reform legislation, declined to remove the provision that had been inserted following heavy lobbying from the MPAA and its coalition of industry groups.
In fact, the committee did change the language in the ban, but to make it even stronger. It makes the provision effective as of June 1, 2010. That is two weeks before the Trend Exchange received approval from the Commodity Futures Trading Commission to trade in box office futures. Trend Exchange CEO Robert Swagger had suggested that regardless of congressional action, they believed they had grandfathered status. However, the new wording in the ban presumably precludes that.
Swagger also has hinted at taking legal action, after he and investors spent three years and a small fortune to get their proposal off the ground. It”s unclear exactly what form that would take, but in a feisty conference call earlier in the week, he said they would “look at all means to recover the losses as a result of the misrepresentations” made by Pisano.
Cantor Exchange president Richard Jaycobs said he was exhausted by the furious lobbying campaign but would withhold substantive comments until Monday afternoon. They will follow the futures commission”s expected approval of Cantor”s application for a license to trade contracts based on box office returns.
Jaycobs contends that the committee”s vote had nothing to do with the merit of the MPAA”s position on futures trading. “This was about politics, about mood and about MPAA”s strengths on the Hill,” he said.
Jaycobs said the legislation will prompt his company to re-evaluate its business plan. “Cantor has been committed to entertainment financing broadly and film financing particularly. We will now have to look as a firm beyond the futures market issue, and decide whether this remains an area in which we can we help out.”