Netflix has withdrawn from the race to acquire Warner Bros Discovery, clearing the way for Paramount Skydance to take control of one of Hollywood’s most storied studios, the BBC reported today.

Warner Bros, which put itself up for sale last year, said Paramount’s revised offer was “superior” to Netflix’s proposal. Netflix declined to raise its bid, with co-chief executives Ted Sarandos and Greg Peters saying the deal was “no longer financially attractive” at the revised price.

Paramount had boosted its offer earlier this week, increasing its bid to $31 per share in cash, up from $30. It also agreed to pay $7bn if the deal collapses and to cover a $2.8bn break fee Warner Bros would have owed Netflix. In December, Warner Bros had agreed to sell its film and streaming businesses, including HBO, to Netflix for $27.75 per share, valuing the deal at about $82bn including debt, according to the BBC.

Also read: Warner Bros takeover bid: Netflix remains endorsed buyer even as WBD acknowledges Paramount’s revised offer

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Sarandos and Peters said in a statement cited by the BBC. “However, we’ve always been disciplined.” They added that the acquisition was a “nice to have” at the right price, not a “must have” at any price.

In an earlier exclusive interaction with Fortune India, Sarandos had framed the Warner Bros acquisition as a transformative moment for Netflix.

“This is a rare opportunity that’s going to help us achieve our mission to entertain the world and to bring people together through great stories,” he said. He described the potential combination as one that would “create a better Netflix for the long term” and set the company up “for decades to come.”

Also read: Fortune India Exclusive: Netflix CEO Ted Sarandos on the Warner Bros. deal and how to stay ahead of competition

A studio with far-reaching implications

If approved by regulators, Paramount’s acquisition would reshape the media landscape. The combined entity would include HBO Max’s streaming customers as well as networks such as CNN, Food Network and a range of sports offerings. Paramount already owns brands including CBS, Nickelodeon and Comedy Central.

The future of CNN has drawn particular attention. Former US President Donald Trump has repeatedly criticised the network and said in December that CNN should be sold as part of any Warner Bros deal. As news of Paramount’s strengthened bid emerged, CNN chief Mark Thompson reportedly urged staff not to “jump to conclusions about the future until we know more,” the BBC said.

Paramount’s financing has also faced scrutiny due to the political ties of its backers. The company is backed by technology billionaire Larry Ellison and led by his son, David Ellison. An earlier hostile bid had received support from Jared Kushner’s investment firm before it stepped back amid scrutiny. Paramount’s recent merger with Skydance also required approval from the Federal Communications Commission and involved a $16m settlement by CBS News over a dispute related to a “60 Minutes” interview, the BBC reported.

Also read: Paramount Skydance ups WBD takeover bid, adds Larry Ellison's personal guarantee

For now, Sarandos' vision remains unrealised. With Netflix stepping back and Paramount Skydance in pole position, Hollywood awaits regulatory approval on a deal that could trigger further consolidation — and likely job cuts — across an industry already under strain.