Lobbyists for Hollywood studios, unions and movie theaters are desperate to put a stop to plans to create a market for film futures trading, an exchange tied to a film’s weekend box office performance. Today they issued a lengthy letter urging federal regulators not to approve a plan for two proposed exchanges, which would do for movies what the Chicago Merc does for grain futures.
Strangely enough, the plans for the exchanges have had industry officials contacting lawmakers on the Senate and House agriculture committees, which have oversight over the Commodity Futures Trading Commission. It would have been a perfect opportunity for Dan Glickman to step in and use his past expertise and connections from serving as Secretary of Agriculture in the Clinton administration, but Glickman left his post as chairman of the Motion Picture Assn. of America as of April 1, and he had a conflict. He sits on the board of the Chicago Merc, which would, technically, be a competitor to the proposed Trend Exchange and Cantor Exchange.
The industry’s lobby was caught off guard by the exchanges, for the simple reason that they don’t really watch the actions of the CFTC. But they are pulling out all the stops to put a halt to this, with one of the chief worries being that such trading exchanges could essentially put a price on a movie’s buzz, in the weeks before its release, and by extension damage its box office prospects if it is not trading well.
Here’s my story on the response of the trading companies who are putting forth the proposal — and why they are dismissing the industry’s fears as alarmist.
A decision is expected something on Friday on whether regulators give the greenlight to the first of the exchanges.