In a 3-2 vote, the CTFC commisioners said that the futures contracts “do not violate the Commodity Exchange Act or the commission’s regulations” because box-office receipts count as a commodity.
The heavily-debated proposal will allow companies in Hollywood to hedge the financial risk of producing movies. Of course, individual futures brokers and traders will also be able to place their own bets on the success or failure of new movies.
The first movie to get a futures contract will John Luessenhop’s crime thriller Takers, starring Zoe Saldana, Paul Walker and Hayden Christensen and due out in August 2010.
Media Derivatives’ proposal generated controversy and opposition from the Motion Picture Association of America, which slammed the the CTFC for allowing what amounted to “no more than over-under bets on a movie’s performance.”
The whole debate may be rendered moot if the House of Representative’s approves a ban on the trading of movie futures that the Senate has placed in its draft of the financial reform bill.
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