Friday, March 26th, 2010 by Bill Swadley.

First published at Huffington Post on March 25, 2010

An article in the New York Times yesterday revealed that the MPAA (Motion Picture Association of America) is up in arms at the prospect that the Commodity Futures Trading Commission might approve the creation of a futures market that would deal in movie box office receipts.

I say, let ‘em try!

Futures markets have traditionally been reserved for raw goods. In futures trading sugar is a commodity that is traded through futures contracts, but not salt water taffy. Sugar is the raw ingredient, candy is the resultant product after manufacture. Same with oil. Crude oil futures are traded, not gasoline. Why is that? Mainly because there is an inherent standardization to a raw commodity, but also a question mark as to how much that commodity will bring once it’s brought to market. It’s that question mark that becomes the gain or loss for the futures trader. Once the raw commodity becomes its final product, price fluctuation is severely limited so there’s not much to bet on.

Perhaps this is what fooled the Einsteins at Cantor Fitzgerald and Veriana Networks (the two groups proposing the exchanges) to think that trading box office futures could work. The complete unpredictability of a film’s performance. But it’s an entirely different manner of unpredictability, and I wonder if they understand that.

To further disconnect this idea from true futures trading: while it’s true that the value of futures contracts fluctuates according to many factors depending on the commodity, there’s a best/worse case scenario that can be estimated as a basis, barring unforeseen events like a natural disaster, unexpected blight, economic crisis, etc. In any given contract period the trader calculates the risk involved going in and may gamble that a certain crop’s yield will do well or poorly based on what’s known about that commodity, interest rates, weather patterns, even political climate for less stable countries. The “gamble” is a calculated one.

Being a gambler and investor and having worked in entertainment finance for over 15 years, the last thing I would ever advise anyone to bet on or invest in is film box office grosses. Why? Oh, I don’t know, let’s ask renowned screenwriter/playwright/author William Goldman:

“Nobody knows anything.”

You said it, Bill.

Mr. Goldman’s statement, which has been quoted ad nauseum (including by me with great frequency) and attributed to all manner of people about pretty much anything that’s unpredictable in life, was in fact a statement about show business, Hollywood in particular, and the unlimited surprises (both good and bad) awaiting any individual or company venturing into the entertainment industry. Yes the rewards can be great, but they’re so sporadic and impossible to predict that even big movie studios often lose their nerve in the face of an expensive, potential flop.

Entertainment finance people spend untold hours and sleepless nights trying to figure out the monetary potential of any given film and the closest anyone in this business ever comes is to approximate a best-guess based on a virtual house-of-cards of assumptions. When something hits a mark we set or, thank the heavens, exceeds it, you never hear the words, “I told you so.” No, the wise man or woman who made that prediction is too busy worrying that the other 10-15 films in that year’s slate will miss the target. Like good ol’ Charlie Brown, one minute you’re the hero, the next you’re the goat.

Here’s the thing, people with a lot of money and/or people with access to a lot of money almost never have the slightest understanding of how the movie business works, especially from a finance point of view. But they almost always find out.

The hard way.

But go for it, boys, and don’t worry. As long as you hit that wire with the connecting hook at precisely 88mph the instant the lightning strikes the tower… everything will be fine.

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Monday, October 5th, 2009 by Bill Swadley.

My whole life I wanted to know “the answer.”  Never mind that I didn’t understand the question.

What always gets me is how, just when I think I have a good idea about the workings of life-as-we-know-it and things are going along pretty smoothly, something grabs me by the collar and says, “You know nothing!”

This is one of those times.

I had a conversation with my mom a few weeks ago about that she’d likely be moving on from this phase of her life fairly soon.  At the time it struck me that the only real difference between her and the rest of us was that she had a little more information. She had been diagnosed with Stage-4 cancer. No one knows when that big event will occur, and we live with a blind trust that it won’t be anytime soon, and thereby live under the illusion that there is “plenty of time.” 

Writers, artists, philosophers, scientists, the faithful and atheists alike, have spent more time dwelling on the subject of mortality than any other except maybe love.  Many who have gone before us and those who come after will continue to ponder the mystery of life and death, and, as they always have, will come to the same conclusion. 

Learning what’s really important in life doesn’t come easy. For most of us it takes not much less than the mental equivalent of being hit over the head with a 2×4.  The realization comes differently for anyone who makes it:  The birth of a child, the death of a parent, catastrophic life-altering events, euphoric experiences that expand the spirit, any experience that raises our awareness to a new level. 

I’m not sure how she got there, but my mom was one of the lucky ones who understood and it’s so simple:  Surround yourself with love and laughter.  That’s the wisdom great thinkers have spent lifetimes uncovering that was second nature to her. In terms of love, I think she would agree with the statement, “Spend as much time as you can in the company of your loved ones.”

When she knew her time was limited, she didn’t run out and book a cruise or schedule a whirlwind trip across the continents. She told us that all she wanted to do was be in her home visiting with everyone. We all thought we had many months in which to do this, and while we would gladly have taken many more years, the little time we were given was put to good use in fulfilling that desire for her and us.

During that time, just like it always had been in my family, we didn’t sit around having serious discussions about sad inevitabilities. Nope.  We laughed and laughed. As hardily and frequently as possible.  Even the day mom left us the love and laughter continued to flow. My sister, Julie, said something that day which moved everyone and is a perfect demonstration of what I’m talking about. She said, “Oh my God! They dropped her. She’s on the sidewalk!”

Yes, it moved everyone. Into hysterics. My sister wasn’t playing a cruel prank on us. She really thought the guys from the mortuary had dropped my mom as they were taking her down the stairs. They hadn’t, not even close, but you can imagine the images that popped into the minds of those of us who weren’t standing at the window as my sister was.

This is how it’s always been in my family.  Not far behind tears of tragedy follow the healing powers of laughter.  My mom’s dad, our Popa, is to this day the funniest person I have ever known. My dad didn’t have the great gift for humor that my grandfather possessed, but he could tell a good joke and was a comic’s fantasy. He laughed so hard and loud and long that at times it could get embarrassing. Especially if you were 14… Or my mom…

Mom had a keen sense of humor (how could she not being raised by Pop?) but she was also very classy and had a strong sense of decorum. As a result, her laugh was very subtle, especially in contrast to my dad. Getting her to laugh out loud was a major accomplishment. If you could get her to do so in public you were deserving of a medal. 

During the weeks following her diagnosis, kids, grandkids, and one seriously cute great-grandchild, literally enveloped her with their unwavering devotion and humor. As she started to drift from us she was comforted by the simple act of holding a hand and feeling the love conduct electrically between us. During this time, even when she was fading and could  barely speak, she’d get a big smile on her face every time the conversation turned to a funny old remembrance or a quick-witted pun.

Everyone who comes into our lives bears with them a lesson for us.  Often the most profound of these lessons are borne by those with the simplest outlook on life. My mom didn’t need to fill her days with activities and distractions that only serve to “busy” our lives rather than enrich them. No, by filling her days with love and laughter, and teaching that lesson to us throughout her life, she not only gave of them freely, but they came back to her immeasurably.

In our pretense that life goes on forever, even though we’re faced every day with the reality that exactly the opposite is true, we allow ourselves to waste a great deal of time.  That’s why we must continually remind ourselves what’s really important. What my mom knew. Her  wisdom about life is a part of us. That wisdom is a gift to us for having been lucky enough to share this small space of time with her. 

My mother, Shirlee Swadley, died Saturday at age 84 from lung cancer. She didn’t suffer, didn’t linger, had no regrets, was surrounded by love, and laughed with us ‘til the end.

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