Box-office futures trading ban is included in financial reform bill
A proposed ban on box-office futures markets has survived a marathon House-Senate negotiation over the financial reform package that Congress is likely to pass next week.
The provision, which was inserted after lobbying by the Motion Picture Assn. of America and others on behalf of the six major movie studios, would make box-office results only the second commodity on which futures trading is banned by law. The other is onions.
Language banning box-office futures trading was included in the version of the financial reform package passed by the Senate, but not the House, leading to questions over whether it would appear in the final bill.
The MPAA and its allies, including the National Assn. of Theater Owners and the Directors Guild of America, have said that box-office futures trading would skew public perception of movies before they open and that it could be manipulated.
Supporters of the proposed trading said futures contracts would be a useful financial tool for the entertainment industry.
In a statement, MPAA Interim Chief Executive Bob Pisano said, “We are heartened by the conference committee’s actions and look forward to the full House and Senate approving the legislation.”
Representatives for Media Derivatives Inc. and Cantor Exchange, the two box-office futures markets that have been seeking to launch this year, declined to comment.
Earlier this week, Media Derivatives chief Robert Swagger said his company — which also goes by the name Veriana — would try to launch even if the ban is passed. It has already received regulatory approvals from the Commodity Futures Trading Commission and could be “grandfathered” in, he said.
An MPAA spokesman said the wording of the ban had been tweaked to make it retroactively effective June 1. The commission’s approval of the trading of a contract on the Media Derivatives market occurred after that date.
The trading commission is slated to issue the second of two necessary rulings related to Cantor on Monday.
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