It's really not hard to believe that the MPAA doesn't like the idea of a film futures market, considering that they're coming out with statements like this, via executive vice president Greg Frazier:
"Anyone who has followed the meltdown of the financial markets, and the pain this caused people throughout America, knows how important it is to ensure that the establishment of new financial marketplaces does not open the door to rampant speculation and financial irresponsibility...the reputation and integrity of our industry could be tarnished by allowing trading in the movie futures contracts in a manner which allows them to be viewed as the economic equivalent of legalized gambling on movie receipts."
No, not hard at all. Of course, the MPAA's actual control over such a concept is limited, but still.
For those of you who haven't already heard, the film futures market is essentially a way to allow people to buy options on feature films. If receipts pass a certain level and you've bought accordingly, you make money on the futures contract, much like commodity prices like gold, oil and pig bellies. This in turn would allow studios to "insure" a film by buying futures on it--if they believe they've got the next Uwe Boll pile of crap, they can buy what amount to put options against it and make a pot of money once the film tanks at the box office, allowing them in turn to recoup some of their losses.
In an industry where the average product costs anywhere from twenty to a hundred million dollars to make, it's not surprising some might want a note of insurance--and despite the MPAA's objections, they may be able to play the market for movies soon enough.
Comments
moviegeek23
April 13, 2010
The fact that the MPAA would try to equate the futures markets (heavily regulated, financial safeguards) with the OTC junk that resulted in the recent financial meltdown just demonstrates that the MPAA has very little if any understanding of financial markets.
It's just like the politicians using 9/11 to justify invading Iraq. Two totally different animals (9/11, Iraq), but that didn't stop them from trying to paint with such a broad stroke.
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SteveAnderson
April 13, 2010
Of course they don't, moviegeek. Awesome handle, by the way--we share that interest. But suggesting that the MPAA has any idea how a futures market in their industry would affect them is like suggesting a lawyer could take over principal photography on the next installment of, well, anything. They're simply not in the same field. Why would anyone expect them to really get the idea? And that's why I say their protestations really may not count for much.
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