Media Derivatives Inc., blocked by Congress from selling futures contracts based on movie-ticket sales, is in talks that may lead to a market for the securities outside the U.S.
The company has been contacted by interested parties in several countries about selling film futures contracts, Chief Executive Officer Rob Swagger said in an interview. He declined to identify potential partners or the countries where his company, a unit of Scottsdale, Arizona-based Veriana Ventures LLC, might do business.
Media Derivatives is considering new markets after U.S. trading was prohibited last month as part of broader financial reform legislation. The Motion Picture Association of America argued movie futures would harm a film’s prospects and be vulnerable to insider trading. The National Association of Theatre Owners also opposed the contracts.
“We’ve been approached by a number of groups from abroad,” Swagger said. “They’ve asked to have dealings with us, whether it’s movie futures or other products.”
Howard Gantman, a spokesman for the MPAA, said the association would oppose overseas trading. Patrick Corcoran, a spokesman for the theater owners, said the group had no comment.
Prior to the Congressional ban, Media Derivatives and Cantor Fitzgerald LP had gained approval from the Commodity Futures Trading Commission to establish film futures markets on films such as Sylvester Stallone’s “The Expendables.”
Media Derivatives “understands the concerns expressed by the MPAA and while we disagree with those concerns, we will focus our energy on markets that are receptive,” Swagger said in an e-mail.
Cantor has abandoned its plans, the Los Angeles Times reported on June 29, citing Richard Jaycobs, the executive heading the effort.
Media Derivatives had planned futures based on the U.S. box-office sales of a film’s opening weekend, according to documents filed with the commission in April. Contracts wouldn’t be listed more than 30 days before a release and trading would end the day before the opening.
“Every other segment of our economy has had a means to offset risk,” Swagger said in an April interview on Bloomberg Television.
Media Derivatives also is considering non-entertainment products for U.S. markets using the Minneapolis Grain Exchange to clear trades, he said.