President Obama signed Wall Street Reform legislation Wednesday, appearing to finally end any chance for futures trading of box office receipts.
The Motion Picture Association of America and Hollywood unions had worked to include a ban on the trading in the legislation, arguing the trading amounted to gambling more than speculating and risked hurting the whole motion picture industry.
Their concern was that it would lead to traders talking down movie prospects, hurting box office revenues.
Proponents of the trading, including the two companies that requested to trade — Cantor Fitzgerald and Media Derivatives — argued unsuccessfully that the biggest impact would instead be to bring billions of dollars of new investment to Hollywood.
They said that investors who have been unwilling to invest in films would be more likely to if the investments could be hedged through trading.
Although both Cantor and Media Derivatives won approval from the Commodities Futures Trading Commission, Cantor abandoned plans to trade as the enactment of the financial reform legislation drew near.
Media Derivatives hasn’t yet confirmed it will abandon trading. Its CEO had earlier said he felt his company’s approval for trading by the commission meant the company was “grandfathered in” and could trade, but that was before a last-minute change in the financial reform legislation appeared to make the trading impossible.
As a result of the financial reform legislation, which was added into the legislation by Agriculture Committee chairman Blanche Lincoln, D-Ark, movies and onions are the only instruments that can’t be traded on futures exchanges.