Box office futures trading

Swagger, who said Media Derivatives worked three years and spent millions of dollars, might well seek redress in the courts, and singled out Pisano as a potential target. What a big Hollywood win. Right now leaders for the U. Barney Frank D-Mass said during a short discussion that while there had been controversy about movie futures, the House conferees were not going to exercise their option to alter the amendment banning movie futures trading.

He said they were agreeing to the amendment as written by Sen. Subscribe to Deadline Breaking News Alerts and keep your inbox happy. I hope it sticks. Good luck with that. For once— maybe for the first time ever— the MPAA does something good.

Focusing on the very specific objections raised about these products implies that if these issues could be resolved, the MPAA would support an alternative concept.

The reality however is that the MPAA will never support anything that poses the slightest risk to their monopoly. More capital into the industry means more jobs, more investment and less reliance on the old big studios — were the MPAA ever going to support that? I guarantee you, over th next few years another guy will come along and will try to create something to help outsiders access the industry, the MPAA will be threatened and they will find a way to crush the new guy.

Max Keiser who invented the HSX,has been railing about Hollywood futures running down the same path as Enron et al. It will destroy Hollywood with bogus derivatives! And this is a good thing why? In which case eveyone would know how stupid the deals are that they make. Futures would have made the town honest. But no one in Hollywood wants that.

Boxoffice futures market gets green light | Hollywood Reporter

The only town where people can lose money for a studio year after year and end up getting rich. Bill, with all due respect, are you crazy? Futures trading would be the worst thing for the film industry. If it were allowed to take hold, no one in Hollywood would ever take a creative risk again.

Thank God this has a chance of stopping before it started. You are both crazy. In addition, neither futures exchange would have authority to compel studios to open up their books for scrutiny.

The settlement terms would be specified in the contract. True, TrendX and Cantor would probably never attain the liquidity necessary to hedge the risk of even 1 film. If movie greenlights became dependent on the whims of a publicly traded market then it would be a disaster since a market is by nature risk-averse. Trading would start once a film is completed, but before its released.

Plenty of junk bonds and stocks get traded all the time, particularly when investors feel safe. A futures market that is really robust and the proposed market could well have grown into that would eliminate the studios as co-financers. Risk that is illiquid. If they thought that Shrek 7 was likely to fail. No one is going to turn out to see The Reader, or Greenzone, or the Woodsman, or a Woody Allen film.

No one expects money to be made from them. Got to agree with D. Sequel, Reboot, Sequel, Sequel, Computer Game adaptation, Remake, Comic Strip adaptation, Sequel…futures trading wont have impacted the output at the major studios one bit — they are already focused on eliminating risk as much as possible — and the above list is the outcome.

Futures trading may have reversed that actually. If I am an external financier, knowing I can hedge the box office performance of a title, I might be more inclined to risk my funds. Love the all the Kool-Aid drinkers here at Deadline Hollywood. How would having insurance on failing make someone risk adverse?

You know, like the MPAA. Of course they would. Of course none of the studios do that at the present time — lol. I love the film industry. Futures trading is just a bad idea…. That sort of spending will get weeded out through economic conditions as there will be less revenue to go around. This argument makes no sense.

I bet you will be pissed when you bet the farm on the over of Karate Kid 2. First off, I never said it is illegal for people to be overpaid.

But when things are public and have transparency a lot of stockholders might be pissed. The public is involved in Hollywood because all of the companies are publicly traded.

They actually AGREE with the studios on this one.

Box-office futures market gets green light | Reuters

No one affected by this stupid idea is for it, and yeah, those affected by it have every right to try and oppose it.

If that means some paid lobbyist going to Washington giving voice to our perspective, so be it. I believe that the futures is based on box office results only. No one has to open there books. Box office results are published in Variety, etc. Um, since this has already been widely reported regarding what is involved in futures trading I hate to disappoint you. If it went through the studios would have to open their books. Do you really think they would give a crap about futures trading if it was based on BO.

You can already get bets on that kind of crap offshore and in England. You are absolutely correct. A bona fide liquid futures market would force tighter accounting standards and more financial openness for price discovery from studios, distributors, and producers, since any derivative financial product needs an ascertainable benchmark value to settle against.

It would also result in higher corporate and partnership taxes plus a tidal waves of litigation. The MPAA intends to prevent any r evolution in that direction fiscal honesty and integrity.

Its stance against futures is entirely self-serving. Futures would be based on DBO, not ultimate profit. The industry has really shot itself in the foot on this way; the MPAAs position being shortsighted in the extremis. Without better ways of hedging risk, the movie industry has no future.

Financing has all but dried out. Its just a stable Paretian world out there. Like it or not there is, however, a gambling aspect to futures contracts. Traders are not sufficient to achieve or maintain liquidity in the futures market. The market needs speculators for that.

Remember, there are places in the world, India and the Far East most immediatey come to mind, where the populace engages in gambling to a far greater extent than we and where there is a great interest in all things American, Hollywood, the movies, and celebrities not being the least of which.

Agreed, and with the spiraling cost of production for effects heavy and CGI heavy why is it costing so much, technology should make it CHEAPER not more expensive films, and indulgent directors IMHO the real cost factor , Hollywood will NEED co-financing and those guys will NEED to be able to hedge if the film goes belly up. Shorts in the market have value — they identify turkeys. R rated movies do poorer than G rated ones.

Family movies do better than Horror. Stars have little effect on box office. Certain script writers have never had a hit. Others reliably have hit after hit. This means a correction to junk movies being flooded into the marketplace, just for cronyism, because the futures contracts will be upside down. Ultimately, it means more good movies that make money for everyone and less bad ones. Major studios have already hedged their bets, hedging is inherent in their model: If futures trading were possible, people who want to keep crappy movies from coming to fruition would bet against them.

That would further lessen the gatekeeper role that the major studios currently play in deciding which movies get wide release and marketing money. I doubt there was any substantial debate as to the pros and cons of movie futures trading…. Can anyone actually argue that elected officials, or anyone else, believe that protecting major movie studios from derivitives speculation is at least equally as important as protecting homeowners from the same?..

Film financing has not all but dried out. That is where your argument always runs off the rails. You just whistle past this assumption that there will be no sources of financing other than opening a casino to finance films. No matter how much Latin you drop in each post, you will never get past this faulty assumption. The death of the Movie industry has been announced over and over; yet there are still people out there that will spend millions and millions of dollars to get into the business.

In fact, there are smart people who will make sophistic arguments to try to get into this game. So, while on a revenue basis they can make Harry Potters, there will be no physical space in which to actually film it. But does his argument really depend on that? Futures is a good way to go in my opinion. Anyone can invest in stock, not everyone can invest in movies.

Not a very equitable arrangement if you ask me. Limiting oppurtunity by banning futures in any singular market ultimately leads to a limitation of resources, talent, and revenue. In order for the contract to settle, the studios would have to disclose the actual, real revenue of a film. What The Industry actually dodged here was nothing less than a Mt. In its pure form — which is not the way that Veriana and Cantor proposed doing it its very simple, would hedge risk and facilitate financing.

It receives that amount from a bank, hedge fund, etc. With a proper hedge in place that cash advance becomes as risk free as is possible in the world as we know it.

While the inventory investment of studios and investors in production and development pipelines for films represent bilions of dollars, the value of the inventory is not known until films are released to the theatrical market.

As a result, the relationship between the cost of a film and its revenue potential is uncertain at best.

Futures offer a way for studios and film inestors to lock-in a fixed sum against the uncertain value of the box office revenues to be realized from a particular film, and alow studios and investors to more effectively finance films through the use of hedges before a film is released. The selling of futures contracts by producers and inventory holders is a classic futures market objective and provides suppliers in many markets with greater production and inventory certainty. The truth is, both the MPAA and the two firms pushing for the futures are both grossly exaggerating the impact these futures would have on the industry, for and against.

These are pure derivatives, with no physical deliverables as in the case of commodity futures. Box office futures are one thing and one thing only, a speculative tool for non industry people who want to participate in the financial dynamics of the movie business. Nothing wrong with that as long as you come to the table with your own money. Deutsche Bank, Societe Generale, all the hedge funds pumped c.

Ditto every other entertainment lawyer in town. Because the Cantor Exchange and TrendX serve no commercial purpose, the discussion surrounding film futures has centered on their gambling aspects. What the legislative ban does is preclude all these entities from hedging their risk, which is bad for them, bad for the economy, and, ultimately, bad for the US which also means you and I.

If one was buying a piece of the film, that would be one thing, and maybe a good thing for independent cinema. But placing 3rd party bets on a BO tally is gambling, nothing more. Is there something wrong with horses or football?

Congress bans boxoffice futures trading | Hollywood Reporter

Heaven forbid that business entails risk! How about our spouses be allowed to hedge their risk in the marriage partnership by engaging in adultery? Have a kid or two on the side just in case? How are you defining film financing? We are releasing two more films this year over last. The industry as a whole released a little over films last year, and will likely release the same this year. Cantor Exchange and TrendX is just fun for gamblers and speculators.

The CFTC has a more direct understanding of the implications of such a market. The CFTC also has more astute analysis.

They are swayed by whomever is donating to their re-election campaigns. Just as off shore on-line gambling is humming along, so could a movie futures market where international production and financing firms could play outside the rules of the US. Why do they want to ban future negotiations of movies? I still do not see a horn of this law. The Hollywood Sign is a trademark and intellectual property of Hollywood Chamber of Commerce.

Continue to Deadline SKIP AD. Home Film TV Awardsline Box Office Business INTL Video Jobs Got A Tip? TV Controversial Bob Pisano MPAA Politics Robert Swagger Wall Street. So by that logic you advocate banning the stock market too?

A future is something else. Its locking in locking in a fixed amount money vs. Sorry to disappoint you. Futures need to settle on the actual numbers. Those published in Variety and elsewhere are not the real s. Insider trading does not exist in the future markets. To an extext they depend on asymetrical information. Futures trade with matched counterparties.

The Chicago Mercantile Exchange has been trying to develop a motion picture future for years. Several banks has also invested years trying to develop one. I can fax you the statement he made regarding futures in our PPM. This is an idea whose time is has come. I doubt there was any substantial debate as to the pros and cons of movie futures trading… Can anyone actually argue that elected officials, or anyone else, believe that protecting major movie studios from derivitives speculation is at least equally as important as protecting homeowners from the same?..

Autistickid, Film financing has not all but dried out. Its survivability is an illusion. They are not, however, turning a profit. Their inability to do that is eating into their operating expenses. Operating expenses is how they turn the lights on every day.

Now the bill can be rewritten without the ban on movie futures. Correction, Looks like the bill was put back on the table. Curious to know if the ban survived? Studios know exactly how much comes in at the BO.

In its pure form BO is netted. Film financing has disapeared. Foreign pre-sales are no longer being done. The number of banks making loans vs. Kim Raver To Make A Return In Season 14 4 Ron Howard Top Choice To Take Over Han Solo Film? Here's Why 6 'Criminal Minds': Colton Haynes Joins Season 7 Cast 10 Fox Nabs Police Drama Starring T.

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