Don’t make your bets on the Hollywood stock exchange debuting soon.
Hollywood’s most powerful studios, along with unions and two California senators, are expected to ask the Commodities Futures Trading Commission to turn down Veriana and Cantor Fitzgerald’s requests for a film futures exchange today.
The exchanges would list current and upcoming film releases and include their predicted domestic grosses. Investors would long or short bets on the movies.
Cantor and Veriana say the exchanges would allow Hollywood investors to mitigate their risks. “If a distributor has second thoughts about a movie, the company could short it on the exchange,” according to the New York Times.
The Motion Picture Association of America (M.P.A.A.), which represents 20th Century Fox, Paramount Pictures, Sony Pictures Entertainment, Universal Studios, Walt Disney Studios and Warner Brothers, is leading the charge against their plans.
The group plans to outline several controversial risks if the exchanges get approved. Industry insiders, say, “a technician who happened to see a rough cut of a movie,” as the FT puts it, could influence a movie’s listing. A movie be leaked on the Internet and then get poor projected box office numbers. Studios could bet against rival films. rumours about director-actor spats or struggling budgets might influence a movie’s listing. And more.
The commission is slated to make a final decision on the exchanges by Friday.
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