Box office futures market decision delayed one week
Hollywood won't find out if box office futures have a future for another week.
The Commodity Futures Trading Commission has extended today's deadline to approve or deny the trading of box office futures contracts by a week, a spokesman said.
The extension was made at the request of Media Derivatives, the company whose contracts were up for approval. In April, the CFTC approved the creation of Media Derivatives' market, called Trend Exchange, but didn't approve the trading of any specific contracts.
The CFTC spokesman said it's normal for such extensions to be granted. A spokeswoman for Media Derivatives declined to explain why the company requested a delay.
The major Hollywood studios, represented by the Motion Picture Assn. of America, have opposed Trend Exchange and a similar market proposed by Cantor Fitzgerald on the grounds that they would create negative publicity for movies before release and could be easily manipulated. Backers say they would be a useful new financial tool for managing risk in the entertainment industry.
In public statements and in questions at a hearing last month, some CFTC commissioners expressed sympathy for the MPAA's concerns, indicating that their approval of the market does not necessarily mean that they will approve the trading of contracts as well. Even if the contracts are approved, however, the markets could be banned by law. With strong support from Hollywood, Sen. Blanche Lincoln (D-Ark.) has included a provision in financial reform legislation outlawing box office futures trading.
-- Ben Fritz and Nathaniel Popper