On the verge of the release of Wall Street: Money Never Sleeps, it's appropriate there is a real life showdown pitting a Wall Street tycoon against Hollywood. Although the Wall Street "tycoon" officially is the Cantor Futures Exchange, it is a subsidiary of Cantor Fitzgerald, whose chairman and CEO is Howard Lutnick, who many would say comes out of central casting.
Our story begins when the Media Derivatives Inc. (MDEX) announced its plans to launch "film futures," basically futures contracts on motion picture opening weekend box-office receipts (a similar contract Cantor also has pending and Hollywood plans to fight). There was much buzz about the contract potential at the Futures Industry Association (FIA) in Boca, but yesterday the Motion Picture Association of America (MPAA) as well as guilds representing directors, stage employees, independent film makers, theatre owners and just about everyone in Hollywood threw up a road block. In a letter to the Commodity Futures Trading Commission (CFTC), the coalition urged the regulator to reject the submission on "film futures" because the contract is based on a "faulty understanding of the film business and could potentially damage the industry and economic interests of its workers."
In it's release, the group said MDEX's "sole purpose is to provide a trading platform for instruments that do not constitute legitmate futures or option contracts but are in essence wagers that are susceptible to manipulation. Rather than providing a real and useful means for hedging risk or price discovery, these instruments will be harmful and burdensome to the motion picture."
Meantime the FIA came to the aid of the industry - not necessarily the MDEX - stating in a release that the MPAA et al assertion that "futures trading is a form of 'legalized gambling' that has no commercial interest or value to the public" was about as accurate as a Hollywood depiction of an historical event. Actually, the FIA said of the letter that "nothing could be further from the truth."
While the Commission deliberates, no doubt the Wall Street tycoon is happy about uproar, because, as Hollywood says, there's no such thing as bad publicity.