Media Derivatives CEO Robert S. Swagger is making good on his threat to try to take the trading of movie box-office futures abroad if the U.S. failed to allow the trading.
Swagger has confirmed to Bloomberg that he’s in talks with foreign partners about hosting trading for the futures.
Swagger did not immediately return a phone call seeking comment.
As Congress readied to enact a Wall Street Reform package that included a ban on the trading of movie box office futures, Swagger had offered several scenarios for what could happen if Congress acted.
He said initially that Media Derivatives – whose plans were approved by the Commodities Future Trading Commission in June — was “grandfathered in” and would move forward with trading. The other firm attempting to set up trading on box-office futures, Cantor Fitzgeral, abandoned its plans in the face of the legislation as soon as the commission voted.
Swagger, citing the millions of dollars he spent to get regulatory approval of the trading, said he might sue MPAA or seek to go forward with the trading — but outside the U.S.
Since the legislation was enacted, Swagger had declined comment on further plans.
A coalition led by Hollywood’s big studios and including union groups and theater owners, warning that the trading could harm the motion picture industry, fought strongly against the trading and won the ban’s inclusion in legislation.
They argued that the trading amounted to gambling and couldn’t really be used for its stated purpose of hedging box office futures.
The groups were not pleased at the possibility that trading could still take place, but outside the country.
“I can say that we would be opposed to gambling on box office results,” said Howard Gantman, vice president of communications for the Motion Picture Association of America.
Supporters of the trading, including Swagger, have argued that the ability to hedge Hollywood investments would bring in billions of dollars of additional money for film making.