Benefits of Box Office Futures

Box Office Futures, if Cantor Exchange's contract application is approved by the CFTC, will offer a remarkable opportunity to investors to participate in and earn returns from the movie business. For many years movie moguls, wealthy producers, and investment banks have had exclusive access to investing and trading in film properties while broad public participation from the movie-going public was not possible.

Now that Cantor Exchange anticipates launching Box Office Contracts, individual investors will have access to participate directly in Hollywood’s revenues, while industry financiers will now have access to a free market in which to hedge significant exposure to a single movie.

Cantor Exchange Participants can hand-select movies and buy the futures contracts associated with them in order to participate in their financial success. Conversely, trading Participants are also able to sell futures contracts in those pictures they expect to underperform. Movie production houses can also sell futures contracts in order to hedge positions in movies they have actively financed.


Experts and Financiers Speak Out on the Benefits of Box Office Futures
Several film financiers and film industry experts contend that Box Office Futures would be a sound financial instrument and would serve a useful purpose for film financiers and others who need to hedge their risk.

Lionsgate/Burns Letter in Support of Box Office Futures (PDF)
A letter to the House Committee on Agriculture describing how Box Office Futures would help Lionsgate and the rest of the motion picture industry.
Michael Burns
Vice Chairman, Lionsgate Entertainment

Potamkin Letter to CFTC in Support of Box Office Futures (PDF)
A letter describing how Box Office Futures would help ancillary entities and industries hedge their existing film-related risk.
Buzz Potamkin
Principle, Project X, Inc. (animation, marketing, and advertising firm)
Former Executive Vice President, Hanna-Barbera Cartoons
Former Executive Producer, The Walt Disney Company

Vantage Advisors Letter in Support of Box Office Futures (PDF)
A letter describing how Box Office Futures would help motivate film investors.
Tom Ashton
CEO, Vantage Advisor Group

Poltermann Letter in Support of Box Office Futures (PDF)
A letter describing how Box Office Futures will help independent film makers and the film industry at large.
Barry Poltermann
Independent Film Maker
Editor/Co-Producer, "American Movie"

Moore Testimony in Support of Box Office Futures for Congressional Hearing (PDF - 3,537 KB)
Written testimony presented to the House Committee on Agriculture's Subcommittee on General Farm Commodities and Risk Management (April 22, 2010) describing how Box Office Futures would help the film industry.
Schuyler Moore
Adjunct Professor, University of California at Los Angeles
Lawyer, Stroock & Stroock & Lavan LLP

Shiller Letter in Support of Box Office Futures (PDF)
A letter describing how Box Office Futures would help the film industry.
Robert Shiller
Professor, Yale University

Pagano White Paper in Support of Box Office Futures (PDF)
A white paper about the effects of Box Office Futures on the film industry.
Michael Pagano
Professor, Villanova University

Chance Summary Statement in Support of Box Office Futures (PDF)
A summary statement about Box Office Futures and the contract application of Cantor Exchange.
Don Chance
Professor, Louisiana State University

Plott Letter in Support of Box Office Futures (PDF)
A statement (in letter form) about Box Office Futures and the contract application of Cantor Exchange.
Charles Plott
Professor, California Institute of Technology

Rutledge Letter in Support of Box Office Futures (PDF)
An analysis letter about the advantages of Box Office Futures.
Ann Rutledge
Financial Consultant
Adjunct Assistant Professor, Hong Kong University of Science and Technology


How Box Office Futures Work

Box Office Futures contracts value the expected U.S. and Canadian movie theater ticket sales (known as Domestic Box Office Receipts, or DBOR) between the first time a film is shown in theaters and the end of the fourth weekend after the film achieves wide release status (on Sunday night if a normal weekend, or Monday night if that Monday is a holiday). This data is tracked and compiled by Rentrak Theatrical, and most of the sales figures are available in real-time to subscribers, and are later published for the public in Variety magazine.

Each individual Box Office Contract for any particular movie represents 1/1,000,000th of the box office. Therefore, a $1,000,000 change in revenues causes a $1.00 change in the value of a contract. For example if the DBOR of a movie is $170 million at the end of the four week determination period, the price of a single unit of the contract associated with that movie will be $170.

There is no need to closeout positions at the end of the four week determination period. Instead, all positions held in that film's contract will automatically be closed at a price that equates to the gross box office of the film during the period. This assures all traders holding positions that the positions will ultimately be liquidated fairly at the contract's stated value.