Box-office futures chief vows market will launch even if outlawed, threatens to sue MPAA
Acknowledging that legislation backed by the six major movie studios outlawing his business is likely to pass, the head of the box-office futures market recently approved by government regulators said Tuesday that he won't go down without a fight.
Robert Swagger, the chief executive of Veriana, said that his firm will attempt to launch its Trend Exchange, which would let investors buy and sell contracts predicting the opening weekend box office of upcoming films, even if financial reform legislation is signed into law with a provision banning such contracts.
"We believe we have been approved and will have met all legal requirements before the law takes effect," Swagger said on a conference call with media Tuesday.
The executive said that because his company's exchange, which cost more than $10 million to develop over the last three years, and its first contract have been approved by the Commodity Futures Trading Commission, he believes it should be "grandfathered" into law.Financial reform legislation passed by the Senate included a ban on box-office futures at the behest of the Motion Picture Assn. of America, whose six member studios have strongly opposed the financial instruments. Similar legislation passed by the House of Representatives didn't include the ban.
Negotiators from the House and Senate are currently hammering out a compromise version of financial reform in a conference committee that will go back to the two bodies for a vote. If it passes, President Obama is expected to sign the bill into law.
Swagger has been meeting with the staff of representatives and senators on the conference committee in an attempt to persuade them to keep a box-office futures ban out of the final legislation, but said he has made little progress.
"It's an uphill battle," he said. "Many people are not willing to meet with us."
If the law passes and Trend Exchange launches as planned this summer with contracts for the Sony Pictures thriller "Takers," there will undoubtedly be a dispute over whether it's allowed to exist.
Swagger, meanwhile, said that his company is considering suing the MPAA because of the arguments made against Trend Exchange by the association's interim chief executive Bob Pisano.
"We would look at all means to recover the losses done by Mr. Pisano's false statements," he said.
An MPAA spokesman declined to comment. The organization has for the last three months waged a vigorous battle against box-office futures, arguing that the market could be ripe for manipulation and engender negative publicity. Backers say the futures contracts would be a useful financial tool for investors in movies who are seeking to mitigate potential shortfalls at the box office.
-- Ben Fritz