The Observer has learned that invitations have been sent to representatives of powerful Hollywood lobby groups and two companies trying to launch new movie futures exchanges to appear before a Congressional hearing on April 22. No word on whether popcorn will be served or 3-D specs will be worn, but it promises to be quite a mingling of cultures: The hearing is being convened by the House Committee on Agriculture, the group that oversees the Commodities Futures Trading Commission. The agriculture committee is chaired by Democrat Rep. Collin Peterson, who represents the nation’s top sugar-beet farming district in Minnesota.
As I wrote earlier this week, Hollywood is freaking out in opposition to these new exchanges, which have been nearing approval from the CFTC. A coalition including the Motion Pictures Association of America, the National Association of Theater Owners and the Directors Guild have argued that the new markets—in which investors would essentially bet on the box office performance of new releases—could be manipulated. The two exchanges, being developed by Wall Street’s Cantor Fitzgerald and a small Arizona firm, have presented their new markets as ways for Hollywood to hedge its big investments in studio releases as well as create potential new ways to raise money for both big-budget and smaller films.
Earlier this week, several legislators called for a delay to the approvals so that the various industry groups could formulate their response to them. Friday the CFTC said it would make a decision on whether to approve the exchanges by April 16–it was originally to be March 24–which may seem odd considering the hearing from lawmakers is not until the following week. But while the exchanges themselves could be approved, the movie futures and other products that would trade on those exchanges would require separate and subsequent approval. The agriculture committee’s other hearings this month include one on “dairy policy” and another on access to healthy foods under federal nutrition programs. Still, the hastily called hearings on box office futures will undoubtedly be something that Beltway insiders and West Coasters enjoy equally: a spectacle.