But the teams behind the exchanges got a boost from an endorsement by Lionsgate's vice chairman Michael Burns, who argued in a letter to a House Agriculture subcommittee that the market in domestic box office receipts “would substantially widen the number and breadth of financing sources available to the motion picture industry by lowering the risk inherent in such financing."
The letter, sent April 16, was disclosed during the hearing of the Subcommittee on General Farm Commodities and Risk Management, which also brought testimony from Richard Jaycobs, president of the Cantor Exchange, and Robert Swagger, CEO of Media Derivatives, which has proposed another venture called the Trend Exchange.
Jaycobs and Swagger vowed that their planned marketplaces for movie futures would bring enormous value to the very film industry interests that have mounted such a vigorous and unexpected campaign against them.
“The notion that a regulated futures contract tarnishes an industry and is tantamount to 'legalized gambling' is not only outdated, but parochial and baseless," Swagger told the subcommittee.
The panel's hearing came a day after the Senate Agriculture Committee approved a financial reform bill containing a provision that would bar any trading related to a film's B.O. performance. That provision and Thursday's hearing reflect vigorous lobbying against the concept by the Motion Picture Assn. of America.
MPAA president and interim CEO Bob Pisano, making his first appearance before a congressional committee, repeated his assertions that the proposals “ought to be under the jurisdiction of the federal gambling and gaming laws, not the federal commodity trading laws."
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