🎬 $47 Blockbuster

👋 Good morning! China's newest box office darling looks like it was animated in PowerPoint by someone still learning PowerPoint. 'Niu Lai,' a cartoon about a bovine dream sequence made by a mother-and-son team over five years (reportedly for $47), is going viral for its baffling plot and disaster-level animation. It's now cleared $2.5M, and audiences are praising the janky visuals as proof it wasn't AI slop. Chinese state media is urging cinemas to show some standards, but the people have spoken, and they want the bad cow movie. You can find the full movie on YouTube if you go looking. We won't link it, though. We're an industry newsletter, have some respect.

Welcome back to The Dailies. Your midweek industry download is served. Grab your coffee and let's get into it. 👇

Cinema United has entered its "actually, let's not fight" era. The trade group, which represents movie theater owners worldwide, spent months cheering on the 12 state AGs suing to block Paramount Skydance's $111B takeover of Warner Bros. Discovery. Now it's begging both sides to make peace. In a letter yesterday, CEO Michael O'Leary and board chair Mike Bowers urged David Ellison and California AG Rob Bonta to meet ASAP and hash out a settlement.

Why the change of heart? The box office is on a hot streak, and theater owners are scared a year-plus of legal uncertainty (trial's not until March 2027) freezes everything just as things get good. It's the same argument IATSE and the DGA made in their own letter last week, and AMC, Regal, and Cinemark have all lined up behind a fast resolution. The group wants four guardrails in any deal:

On Monday, Paramount asked the judge to make the states (plus the WGA, which filed its own antitrust suit) put up a $1.88B bond to cover what the delay is costing it. The big chunk is a ticking fee: starting Oct. 1, Paramount owes WBD shareholders about $7M a day until the deal closes. Bonta's office was unmoved, saying Paramount wrote that fee into its own merger contract knowing full well the deal would face regulatory review.

Looking ahead… The bond ruling has no date yet. Bonta's coalition is still standing firm, but the list of people asking them to fold keeps growing.

For Your Awards Consideration, HBO Max presents HACKS. Nominated for 25 Emmy Awards, including Outstanding Comedy Series, Deborah and Ava return to Las Vegas determined to secure Deborah's legacy as a comedian. Don't miss the series Variety calls "One of TV's Best Comedies Ever." Now streaming on HBO Max. 

🎟️ Dunesday is shaping up to be biblical. The Dec 18 showdown between 'Avengers: Doomsday' and 'Dune: Part Three,' already doing its best Barbenheimer impression, flexed again yesterday when a new batch of 'Dune 3' IMAX tickets sold out in hours (scalpers want up to $1K on eBay). 'Doomsday' presales are running 65% ahead of 'Spider-Man: Brand New Day,' which just passed $2B. And with both films getting a two-week holiday runway, the double feature could carry an already strong theatrical year toward the $10B mark many are hoping for. Popcorn futures are up.

🤝 The MPA and ByteDance struck a deal to keep AI off Hollywood's IP. The Motion Picture Association and TikTok's parent company agreed on guardrails so ByteDance's generative AI tools (including Seedance and Seedream, which power features across TikTok, CapCut, and Dreamina) can't rip off movies and shows. That's a warmer tone than February, when the MPA hit ByteDance with a cease and desist after an AI video of Tom Cruise and Brad Pitt brawling went viral, largely for how real it looked. Details of the deal haven't been released.

⚖️ Disney is taking the FCC to court. The company sued yesterday to block the agency's early review of ABC's eight station licenses, saying it's retaliation for shows like 'Jimmy Kimmel Live' and 'The View' criticizing President Trump, and that the pressure is already shaping what ABC airs. The FCC says it's about a year-long probe into whether Disney's DEI practices broke discrimination rules, and that every broadcaster has to operate in the public interest. Disney says that violates the First Amendment and wants a judge to pause the review now.

Quick recap if you missed Monday's edition: Last year, California expanded its film and TV incentive to $750M a year, but then a June budget bill (SB 122) capped the tax credits any single company can claim annually, basically gutting the program's value for studios before it even got going. The industry pushed back hard, with union members sending roughly 350,000 letters to Sacramento demanding the cap not apply to film and TV credits at all.

Now there's a deal coming together, though sources familiar with the talks say it delivers less than the industry wanted. Here's what's in it:

Why no full carveout? The cap was built to keep big companies, mostly in tech, from wiping out their state tax bills with credits, money California needs with its deficit. And lawmakers reportedly fear that exempting Hollywood would send tech's lobbyists sprinting to Sacramento with a "what about us" PowerPoint.

Looking ahead… Nothing's final, and different options are still being weighed. But the current legislative session ends August 31, so whatever lands by then is the deal until next year. No pressure, it's only the entire premise of the $750M program.