We reported back in April that the Commodity Futures Trading Commission had granted preliminary approval to a new futures company that will allow trading on box office performances of feature films and now the company has gained approval to start trading. According to The Hollywood Reporter, the CFTC granted the first contract for box office futures trading to Media Derivatives. It was said that trading on box office performances will start later this year.
The move comes after the past two months of Hollywood organizations lobbying against the Media Derivatives exchange, which will operate under the name The Trend Exchange. It was said that contracts on feature films' box office performances will open trading four weeks before a film opens and will end on the film's opening weekend. The CFTC will also be deciding on the Cantor Fitzgerald model entitled the Cantor Exchange, which will continue trading for four weeks after the movie has been released. The CFTC has a June 28 deadline on whether or not to approve a futures contract for the Cantor Exchange.
Despite the approval, a new Congressional bill could ban both of these companies from trading. Arkansas Senator Blanche Lincoln is sponsoring a bill entitled the Wall Street Transparency Act, which, if passed, would ban trading on box office futures commodities. It was said that the bill also deals with much larger issues and it still isn't clear if the bill will pass or not.
The Motion Picture Association of America, the Director's Guild of America, the Writer's Guild of American, the Screen Actors Guild, theater owners and many other Hollywood organizations have spoke out against a box office futures market.