May 19, 2010
Ten witnesses and three-and-a-half hours later, here’s what we know:
1. Bob Pisano Is A Washington Name-Dropper
Bob Pisano, Interim CEO of the MPAA (Motion Picture Association of America), left his panel early, announcing to the room that he had been invited by the Vice President of the United States to a State Luncheon at the White House for the President of Mexico. Sorry Bob, we’re not impressed. Your testimony wasn’t going very well and it seemed like a convenient excuse. You were outflanked by three other witnesses on your panel, all of whom favored the box office revenue contracts you decry. We think your grand departure was simply a rude reminder to everyone in attendance that their efforts may not matter because you and your studio buddies have friends in EVEN higher places, including Senators who may be on track to ban box office futures in the Financial Reform Bill now winding through Congress, regardless of what the CFTC does.
2. Bart Chilton Deserves A Hollywood Career
Commissioner Chilton was the most vocal member of the CFTC in expressing skepticism about the legality and appropriateness of box office revenue contracts for futures trading. He seemed, at times, to be Hollywood’s lapdog, doing the studios bidding the same way members of Congress do the bidding of interest groups whose support and interests they share. With his tanned skin and bleached blond hair (or is it naturally white?), Commish Chilton looks like a Hollywood actor. Or a grown up version of Jeff Spicoli, Sean Penn’s character in Fast Times At Ridgemont High (1982). Chilton would look right at home starring in one of those “Come To California” ads with Arnold and Maria.
3. Gambling Is A Dirty Word (Even Though It’s Legal In Many States)
Scott Harbinson of IATSE (International Alliance of Theatrical and Stage Employees) went for the jugular, opposing box office futures with colorful language. First, he dropped the “B” bomb, referring to Cantor Exchange and MDEX (the companies seeking approval to offer box office revenue contracts) as “bookies”, a direct reference to gambling, a charge those opposed to movie futures love to make about their opponents. The charge seems misplaced, as if risk-taking equates to a Las Vegas casino. After all, don’t other investments, be they stocks, bonds, options, or motion pictures for that matter, involve betting on one outcome or another?
4. Class Warfare Is Alive And Well
Scott Harbinson of IATSE wasn’t finished. He also pulled out the political rhetoric handbook and offered up a hackneyed theme, casting the debate over movie futures as one between Wall Street and the “working man”. Would someone please call the political left so they can ask for their mantra back.
5. The CFTC Is Likely To Approve Movie Box Office Revenue Contracts
Based on the tone of questions asked and comments made by each of the CFTC Commissioners, one can read between the lines and make an educated guess as to which way each regulatory voter is leaning. Here’s our best reading of the tea leaves:
Chairman Gary Gensler – LIKELY YES for approval
Commissioner Michael Dunn – VERY LIKELY YES for approval
Commissioner Scott O’Malia – PROBABLE YES for approval (hardest to predict)
Commissioner Jill E. Sommers – PROBABLE NO for disapproval
Commissioner Bart Chilton – VERY LIKELY NO for disapproval
That makes 3-2 in favor of approval, but tea leaves can be unreliable, and the Congress may make today’s spirited hearing moot, so I wouldn’t rush out and bet, I mean, buy a futures contract on the end result.
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