Netflix has backed away from its proposal to buy Warner Bros Discovery, clearing the way for Paramount Skydance to win a months-long battle for one of Hollywood's most storied studios.
Warner Bros, which put itself up for sale last year, on Thursday said Paramount's latest bid was "superior" to the one from Netflix, which in turn refused to raise its offer.
The winner of the bidding war would gain control of the iconic studio along with its films and media networks - a takeover that could significantly reshape the media landscape.
"The transaction we negotiated would have created shareholder value with a clear path to regulatory approval," Netflix co-chief executives Ted Sarandos and Greg Peters said in a statement. "However, we've always been disciplined."
"This transaction was always a 'nice to have' at the right price, not a 'must have' at any price," the Netflix executives added.
The announcement on Thursday caps off a dramatic months-long saga that - if approved by regulators - is likely to reshape Hollywood. It also could hold serious ramifications for the future of one of the US's biggest news brands - CNN.
Trump has frequently attacked the news network over its reporting of his policies. He said in December that he believed CNN should be sold as part of any Warner Bros deal. He called the people running CNN "corrupt or incompetent" and said they should not be entrusted to run the network.
CNN head Mark Thompson sent an email to employees as news spread of the all-but-assured deal, telling workers to not "jump to conclusions about the future until we know more", US media reported.
Last December, Warner Bros agreed to a takeover offer from Netflix for some of its assets. But Paramount, which is backed by tech billionaire Larry Ellison and led by his son David, made a rival offer as it looks to transform itself into a Hollywood heavyweight. But it had been rebuffed by Warner Bros.
Paramount's 2025 merger with Skydance also led to scrutiny amid negotiations with the Trump administration's Federal Communications Commission, which had to sign off on the deal.
Among the concessions made was Paramount's $16m settlement on behalf of CBS News. Trump had sued the network over a "60 Minutes" interview with former vice president Kamala Harris, claiming that the network had engaged in election interference in the way the program was edited.
On Thursday, chief executive David Ellison welcomed the Warner Bros board's decision in favour of Paramount's sweetened offer. The proposal, he said in a statement, offers Warner Bros shareholders "superior value, certainty and speed to closing".
If Paramount's deal is approved by regulators, the company would fold Warner Bros' HBO Max streaming customers into its portfolio. It would also take ownership of CNN, the Food Network and a range of sports offerings.
Critics of a deal with Netflix voiced concern that the storied movie studio would be lost to the Silicon Valley streaming titan, paving the way for the depletion of cinema. But a merger with Paramount, which has touted itself among the last standing movie studios in Hollywood, also left critics unnerved over the company's perceived political connections to the Trump administration - a concern that has also riled the media landscape over the future of CNN.
