“The state of the theater industry is perhaps on the up,” Ken Ziffren told a ballroom of entertainment lawyers Thursday after a recent strong box office.
In his annual look at the industry, the Hollywood legal mandarin put AI, tax credits, the creator economy, M&A, YouTube, the NFL and more in the spotlight along with the current state of moviegoing. As usual, Ziffren’s hourlong speech was a data wonk’s dream, but it also was noticeably more upbeat than in past years.
It also doesn’t hurt that when it comes to box office registers, Ziffren is right.
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The box office is headed to its best year both stateside and global since pre-Covid 2019, with a respective projected $10 billion and near $36 billion.
Despite the recent merger of Paramount and Warner Bros Discovery, Ziffren seemed hopeful that the future of moviegoing wasn’t bound to dim. “Hoping that it’s a successful merger and that it’s not one as others,” said Ziffren.
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Putting Skydance’s $111 billion Para and WBD merger in context with the massive SpaceX IPO and looming stock market moves by Anthropic and OpenAI, the Ziffren Brittenham LLP co-founder summarized M&A activity as a mixed economic bag.
The YouTube and ESPN deal, with the NFL Network purchase, got some special attention as did the recent revival of the big-bucks Sunday Ticket class action. “Where that’s going to go is anyone guess,” Ziffren said of the case, pondering if the NFL would move to take the matter to the Supreme Court. The attorney also noted that the Sunday Ticket plaintiffs can file a new case now that the bundle is off DirecTV and on YouTube.
“It should be fun watching.”
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The NBA — or, more specifically, the L.A. Lakers — received some legal attention from Ziffren with the messy situation of the Buss family civil war that has broken out over their stake in the team with Bob Iger and Josh Kushner’s $12.5 billion purchase in August. A court hearing is set for the Bass sibling squabble on November 15, 2026 in downtown LA.
Turning to a past fave topic of tax credits, Ziffren offered an overview of the proposed The Motion Picture, Television, and Entertainment Revitalization Act, currently before committees in the Senate and House of Representatives. “This legislation is needed by our industry,” Ziffren exclaimed, noting competition and incentives for production globally from more than 55 countries and other jurisdictions. To hit the bottom line, Ziffren opined that the passage of the bipartisan MPTER Act would lead to a surge in production jobs stateside and “$10 billion” for the industry.
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Supported by strange bedfellows from Donald Trump to Sen. Adam Schiff (D-CA) even before this week’s midterms, the legislation would let productions eligible for the credit include film and TV productions where the total cost exceeds $1 million and where 75% of the production is in the U.S. There also are provisions for post-production and visual effects. Excluded are news, live sports, talk shows, daytime dramas, social media content, advertising and corporate videos.
Ziffren hoped the “bipartisan period” of the current lame duck Congress would see the federal tax credit pass before the end of the year.
Still, with a deeper look at the big screen, Ziffren emphasized that for the most part, outside of horror films, whenever studios make films that cost under $70M, they tend to lose money. To him, this underscores the vitality of a tentpole investment mind-set at the motion picture studios.
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“Wide releases are essential to keep that [moviegoing] attendance stable and growing,” Ziffren said. This despite the fall of wide release movies from a level of roughly 100 pre-Covid to 75 in 2024. That number has increased to 94 this year.
While studios pivoted to a day-and-date release model during Covid, when theaters were closed, Ziffren made a point Thursday to underscore how profitable the downstream business is for studios. “Studios can get a lot of money in licensing,” he said, noting that a pay one window can reap as much as $250 million.
After PVOD, studios are licensing to their sister companies in the ad-supported business in what is another lucrative window. “It’s a profitable business once you get in the TV world,” he explained, specifying how the pay TV (or streaming) business has become one with and without commercials. “The only costs in distribution are remittance taxes and residuals, and now and then profit participations,” Ziffren added.
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To that, with a mild swipe at algorhythms, Ziffren noted that for all the worries about the effect artificial intelligence will have on the entertainment industry, execs should pay attention to the bottom line. Advocating for studios and streamers to lean into quality over quantity in their battle for eyeballs with YouTube, TikTok, and META’s Instagram, the lawyer noted that AI already has shown it can cut costs.
AI will “lower the costs of post and pre-production, and ultimately production itself,” he noted, as he also said how that will play put in terms of investment is “anyone’s guess.”
As far as the masses’ reception to AI in entertainment, Ziffren acknowledged that “audiences demand will continue to value premium crafted storytelling.” That’s a consensus that many film tracking firms would agree with Ziffren on: Gen-Z audiences have been turned off by the whole notion of AI. It’s a reason why Christopher Nolan’s The Odyssey has been so successful grossing $1.8B, Universal and the filmmaker’s top grossing movie ever. Younger audiences have savored the physical craftsmanship on screen.
Harking back to the state of Tinseltown labor, which was the heart of Ziffen’s 2025 speech, the lawyer stated, “AI was not a major issue as it was in 2023.”
