That is simply false. There is still the incentive for the enjoyment of creating, becoming famous from creating, selling live performances, donations, etc. There are people that wish to create but can't because you can't use characters from existing works for fear of lawsuits. So it seems to me that even though there will be some discouragement to some people there will be encouragement to others. Which outweighs which? Do you have anything to offer aside from your gut feelings?

I would also like to add that we have a plethora of real world examples of free (as in free speech) intellectual creations being created and quite often working out better than commercialized intellectual creations. We have loads of free software for example, and not many computer scientists would argue that msdos is a better kernel than linux. We also have wikipedia that accumulated around 16 million USD of donations last year. So not only are people willing to give away there time for free in doing tasks that benefit the community as a whole but also, people are willing to give them money for doing so.
I would also like to point out - although this can be considered a subjective opinion I suppose - that intellectual works made with only money as an incentive (e.g. most big movies) are plain crap since their goal is not the expression of an artistic vision from the creator but just creating as much money as possible by pleasing the evermore stupid crowd of people who will buy it.