Thursday, July 1, 2010
Previously, we blogged about movie futures. Cantor Fitzgerald was expecting to open an online futures market that would allow film studios, institutions and moviegoers to place bets on the box-office revenue of Hollywood’s biggest releases. It even had the green light from regulators.
However, it looks like the current financial reform legislation has thrown rotten tomatoes at the plan. The LA Times reports:
With financial reform legislation that would outlaw trading in box-office futures headed toward final passage, the company is giving up on its plans, said Richard Jaycobs, the executive heading the effort for Cantor Fitzgerald.
"The broader opportunity of motion picture finance is still something we have to evaluate, but we know now we're not going to do futures contracts," he said. "The bill is quite clear."
Though the financial reform bill isn't yet law, its box-office futures provision was made retroactive to June 1 by the House-Senate conference committee that hammered out final language for the bill last week. That would put a stake into both Cantor Exchange and its main competitor, Media Derivatives, which received final approval from the commission June 14.
Jaycobs said his firm was simply overwhelmed by the lobbying power of the Motion Picture Assn. of America, which on behalf of the six major studios persuaded Sen. Blanche Lincoln (D-Ark.) to insert a box-office-futures ban in her original version of the bill. The association also got House-Senate negotiators last week to not only keep the provision but also make it retroactive.
"I've really come to respect the MPAA's ability to be effective on [Capitol] Hill," Jaycobs said.
The major studios and some others in Hollywood had argued that box-office futures markets could create negative publicity for movies before they're released and would be too easy to manipulate. Backers have said they would be a useful financial tool for film investors.
This is how a bill becomes 2000 pages.
[Meredith R. Miller -- h/t Allen Blair (Hamline)]
A more formal announcement is forthcoming, with details about registration, hotel accommodations and the call for papers. In the interim, if you have any questions, you can contact Jamie Fox (and that's Fox, not Foxx).
[Meredith R. Miller]