One man holds the key to saving movie box office futures.
Schuyler Moore was a forceful voice in favor of movie futures at the May 19, 2010 Public Meeting On Movie Box Office Futures held by the Commodity Futures Trading Commission. Moore, a Los Angeles attorney, represents financiers who invest in movies. His clients appear to be a combination of deep-pocketed organizations that may include private equity funds, bridge and gap financiers, banks, mutual funds, hedge funds, pension fund managers, investment banks, and other private capital. At the Public Meeting, Moore was passionate and persuasive. He hasn’t let up. His recent article, Withdraw Your Shortsighted Objections To Movie Futures Trading was addressed to the six major movie studios, represented by the MPAA, and set out his beliefs.
But all his advocacy in favor of box office futures will likely be for naught unless he takes things up a notch. If he’s really serious about saving movie box office futures from the Senate-House Conference Committee (currently writing a Financial Regulatory Reform Bill likely to include the ban on movie futures passed by the Senate), Moore needs to do more (no pun intended) than speak up and write an article.
According to his testimony at the Public Meeting, Hollywood has relied on $14 billion of outside financing to make movies over the past decade, money invested in blind slate deals, split-rights deals, etc. What would happen if Moore organized his clients and their cohorts, the very people and organizations who provided that $14 billion to the movies studios, and with a single voice these financiers forcefully and privately communicated to the studios that they want movie box office futures and the hedging value they provide? Further, that members of the group may reevaluate their continued participation as outside financiers of movies if such a vehicle is not available to them. Money, after all, speaks louder than words.
Could this behind-the-scenes advocacy from the money men turn the tide? Might the studios reconsider and instruct their allies in Congress to remove the Senate provision banning box office futures from the bill now being written? Would Hollywood change course so as not to jeopardize the availability of outside funds from those currently permitting them to hedge their film investments?
It’s hard to know for sure. The movie studios may decide they can always find others to invest in the glamour of movies (Russian billionaires, perhaps?), even though testimony at the Public Meeting revealed that attracting outside financing has become harder, not easier in recent years.
In any case, if Schuyler Moore really wants to save box office futures, writing articles is one thing, but organizing private capital clients into an effective lobbying force may be the real ticket. So ask yourself, Mr. Moore: Do you and your clients want a future where Trend Exchange (MDEX/TrendEX) and Cantor Exchange are reality? Or can you live with the current system?
Either way, time is short.
{ 9 comments… read them below or add one }
Time is not just short. Time’s up. The conferees take up Sec. 721(a)(4) of The Restoring American Financial Stability Act of 2010 tomorrow. The game is over. Moore is a hopeless academic who is completely unable to marshall, “private equity funds, bridge and gap financiers, banks, mutual funds, hedge funds, pension fund managers, investment banks, and other private capital” because he really doesn’t have any clout or influence with those people. Note that he was unable to get anyone in those categories above to even testify before the CFTC or House Ag Subcommittee. Swagger’s getting no traction on the Hill, getting face time with only low level staffers and staking out the mens room in the hope buttonholing an unwary conferee. Swagger is so desperate he’s offered the MPAA a seat on his board. Publicly the MPAA has refused comment, privately they’re doubled over in laughter.
Game, set, match. Time to move on.
It’s hard to conceive of what legal theory Swagger thinks MDEX will be “grandfathered” and hence awarded a monopoly, but the level of desperation is evident.
Skeptic – seriously, I am all for arguing back and forth about this but why are you so bitter about this issue? You seem pretty obsessed with ensuring the proposed exchanges fail…something tells me you don’t even have a stake in either side of the process either?
Can’t you at least stand back and admire this guy for putting his money on the line to try and create something new? Otherwise, lobbying for his failure is pretty weird.
Ummmm, I think we know who the bitter one is here. It’s the same dope who supposedly bet the family farm (literally!!) in his attempt to create a casino under the color of a futures market. I’m quite satisfied with both the process and the outcome. The motion picture industry has some how managed to grow and prosper for nearly a century without this sort of “help”. Forgive me for not shedding a tear for a couple of bookies whose plan to line their own pockets fell apart. It sounds like you may be part of the extended family who stood to gain by this. I just hope you weren’t foolish enough to dump money into this scheme, you seem like a decent enough guy.
Of course he’s bitter!! He has every right to be – who wouldn’t be in his situation!? Even you might be if you pursued a business endevaour according to the rules and been derailed by backdoor politics…but something tells me thats not the type of person you are.
But of course you are satisfied with the process and the outcome, envy has no regard for due process and fairness.
And whilst I appreciate the patronising endorsement, I do not actually have anything invested in either exchange – I am just more open minded than the ‘we don’t need this, ban it’ and ‘it’s new, I don’t understand it, ban it’ crowds.
Congratulations on your elevated state of enlightenment. I also applaud your idealistic view of due process and fairness. How’s all that working for you?
But there’s an old saying: “You can’t get f*cked unless you assume the position.” Swagger would be well served to consider this before embarking on his threatened course of action. Litigation is a very expensive and risky proposition. Perhaps he can create a futures exchange for litigation outcomes and hedge his own case. Now that would be a smart bet.
‘elevated state of enlightenment’ – ha ha, yet another example of ‘I have no proper argument against this so I’ll offer up another petty insult’.
There was a time I looked forward to your responses, although we disagreed I at least sensed you thought around the issue and had a perspective worth hearing, but apparently I was wrong – you are insane! You are actually comfortable arguing against ‘fairness’ …is your second name Mugabe?
Sadly that litigation idea pretty much already exists – no doubt realising that someone else thought of it first and is making money when you are not, you’ll run off and try and get Congress to ban it.
CH, I didn’t mean for this to disintegrate into an exchange of slights and name-calling. I’m not arguing against fairness, I am just realistic about how things work. Guess what, life’s not fair. And no place on earth is that more true than in Washington DC. It’s about money and influence. Cantor is sophisticated enough to realize this. They didn’t put all of their eggs in one basket. Swagger, quite frankly, is a rube. He failed to understand how things really work and is now reaping the consequences.
Now, I’m off to ZANU-PF headquarters to waterboard some dissidents. I look forward to renewing our discussion after the conferees take action on box office futures later today.
I certainly agree that both Cantor and Swagger made a few critical mistakes with this – they seem to have been completely blindsided by the opposition from the MPAA and have failed to reveal convincingly why they ever thought the studios would suport this, surely this is something they researched before dropping millions into the proposal?
I have also known all along that you are right about what will happen when the language is debated, but it doesn’t mean I like it.
Swagger will probably be fine – Trend Exchange has been approved as a designated contract market – they are free to self certify any number of other (non-box office) types of media orientated futures contracts, as all the other markets do. That’s where the finance bill wording is exposed for exactly what it is: reactive, piece meal, special interest bought wording – it doesn’t stop speculation on dvd sales futures contracts, music contracts or anything else Swagger dreams up. If congress want to deal with this properly and tie up the holes in the existing commodities defintion, that’s exactly what they should have done.
As for the article, these are the same arguments I have read dozens of times. The arguments raised are either not unique to films futures (insider trading, is neither illegal on futures markets or unique to film futures – you could equally argue encouraging theft of insider secrets justified a ban on the stock exchange) or just plain daft crazy. I have never been convinced by the ‘self fulfillinf prophecy’ angle – the public will never make decisions about which films to go an see based on the value of the film on an exchange.
The article also ignores the fundamental reality that film making (particularly that of the MPAA represented studios) is a business – banging on about art is fanciful. These are publically listed companies, driven by the same profit motive that all others are – if Swagger and Cantor had spent some proper time actually showing them how to use these exchanges before the fight started, the studios would be all over the Exchanges. They would have to be, corporate execs would never miss an opportunity to hedge their risk.