Box-office futures market gets key approval from government
The major movie studios lost a critical battle in Washington on Friday as the Commodities Futures Trading Commission unanimously approved the creation of one of two pending box-office futures markets that were opposed by much of the Hollywood establishment.
The CFTC decision allows Chicago-based Media Derivatives create its new exchange through which investors buy and sell contracts that predict the box-office performance of upcoming films. However, the governmental body must give Media Derivatives, which is funded by the Indiana-based company Veriana, separate approval to offer the contracts that will be traded on the market. The CFTC has until June 7 to make that decision.
The Motion Picture Assn. of America, joined by a number of other industry groups, has opposed the exchange as well as a similar market proposed by Wall Street firm Cantor Fitzgerald that is awaiting CFTC approval. The trade group has argued that these markets are ripe for manipulation and will create negative publicity for movies before they are released.
[Update, 4:50 p.m.: MPAA responds by supporting proposed legislation that would ban box office futures]
-- Ben Fritz