NEW YORK (AP) — Netflix is walking away from its offer to buy Warner Bros. Discovery’s studio and streaming business, in a stunning move that effectively puts Paramount in a position to take over its storied Hollywood rival.

On Thursday, Warner’s board announced that Skydance-owned Paramount’s latest offer to buy the entire company for $31 per share was superior to the agreement it had previously struck with Netflix. Warner gave Netflix four business days to come up with a counteroffer — but Netflix instead responded less than two hours later, declining to raise its proposal. It said the new price it would have to pay made the deal “no longer financially attractive.”

“We believe we would have been strong stewards of Warner Bros.′ iconic brands,” Netflix’s co-CEOs Ted Sarandos and Greg Peters said in a joint statement. “But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

A Paramount buyout of Warner Bros. Discovery would reshape Hollywood and the wider media landscape. And unlike Netflix — which was only eyeing Warner’s studio and streaming business — Paramount wants the entire company. That means HBO Max, cult-favorite titles like “Harry Potter” and even CNN could soon find themselves under the same roof as Paramount’s CBS, “Top Gun” and the Paramount+ streaming service.

The prospect of such a combination, which will still need the green light from both Warner shareholders and regulators, poses both antitrust concerns and questions of political influence.

Netflix’s decision to walk away on Thursday marks the latest development in a monthslong, messy corporate battle over Warner’s future. Sarandos and Peters thanked Warner’s leadership despite the final outcome.

Warner had repeatedly backed the deal it struck with Netflix since December right up until Thursday evening, when its board continued to recommend Netflix even while calling Paramount’s bid valued at about $111 billion including debt “superior.” Netflix had previously put a $27.75 per share offer on the table for Warner’s studio and streaming business, totaling nearly $83 billion including debt.

In a statement Thursday night, CEO David Zaslav said Netflix executives had been “extraordinary partners” and that he wished them “well in the future.”

After months of a heated back and forth amid Paramount’s hostile campaign to take over Warner without the board’s blessing, Warner also changed its tune about the remaining prospective buyer.

Warner’s board hasn’t officially adopted Paramount’s merger agreement yet, but once it does, Zaslav said it “will create tremendous value.” He added that the company was “excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery.”

Paramount did not immediately respond to requests for further comment. But CEO David Ellison earlier applauded Warner’s board affirming “the superior value of our offer.”

A Paramount-Warner combo would combine two of Hollywood’s five legacy studios that remain today, in addition to their theatrical channels. Beyond “Harry Potter,” Warner movies like “Superman,” “Barbie,” and “One Battle After Another” — as well as hit TV series like “The White Lotus” and “Succession” — would join Paramount’s content library.

Paramount’s lineup of titles include “Top Gun,” “Titanic” and “The Godfather.” And beyond CBS, it owns networks like MTV and Nickelodeon, as well as the Paramount+ streaming service.

A merger between the two companies would put CNN under the same roof as CBS, which has already seen significant editorial shifts under new Skydance ownership. Paramount took steps to appeal to more conservative viewers in its news operations, notably with the installation of Free Press founder Bari Weiss as editor-in-chief of CBS News. And if the company’s takeover bid of Warner is successful, critics warn similar shifts could happen CNN, a network that has long attracted ire from Trump.

“Any concerns about Netflix owning Warner Bros. are only heightened by the prospect of Paramount owning all of WBD. But it might not even matter,” Mike Proulx, vice president and research director at Forrester, a market research company, said in an email. “Politics are playing an outsized role in this deal, and they’ve been on Paramount’s side from the get‑go.”

President Donald Trump has a close relationship with the billionaire Oracle founder Larry Ellison, the father of Paramount’s CEO David Ellison who is heavily backing Paramount’s bid to buy Warner. And Paramount’s aggressive push to acquire Warner arrived just months after Skydance closed its own buyout of Paramount in a contentious merger approved just weeks after the company agreed to pay the president $16 million to settle a lawsuit over editing at Paramount’s “60 Minutes” program on CBS.

Still, Trump has continued to publicly lash out at Paramount over editorial decisions at CBS’ “60 Minutes.” And while the president previously made unprecedented suggestions about his involvement in seeing a Warner deal through, he’s since walked back those statements and maintained that regulatory approval will be up to the Justice Department.

Still, top Democratic lawmakers have sounded the alarm about the Republican president’s ties to companies like Paramount and potential consequences of growing corporate power.

“A handful of Trump-aligned billionaires are trying to seize control of what you watch and charge you whatever price they want,” Democratic Sen. Elizabeth Warren, a longtime antitrust hawk, said in a statement Thursday night. She also called a potential Paramount-Warner combo an “antitrust disaster.”

Executives at Paramount have argued that merging with Warner will allow it to compete with bigger rivals particularly in the streaming space, and bring larger content libraries for its customers. But Warren and other critics say such a merger threatens higher prices, and that a Warner takeover would only further consolidate power in an industry already run by just a few major players. Some trade groups also warn that could mean job losses and less diversity in filmmaking.

When Netflix was still in the running, one of its key arguments against a Warner-Paramount tie-up was that it would combine two very similar companies: two legacy studios, two theatrical channels and two major news networks. The streaming giant said that posed a higher risk for job losses and other competition concerns.

In contrast, executives from both Netflix and Warner argued at a Senate antitrust hearing earlier this month that Netflix doesn’t have the same studios and film distribution that Warner does. That was “one of the reasons that the Netflix offer appeals to us so much,” Bruce Campbell, Warner’s chief revenue and strategy officer, told senators on Feb. 3 — noting that the company believed Netflix would not only keep Warner’s operations intact, but “invest in continued production.”

How regulators will respond to a Warner-Paramount deal remains to be seen. The U.S. Department of Justice has already initiated reviews, and other countries are expected to do so, too.

Warner shareholders will have to be convinced, too. Beyond a higher price, Paramount has also tried to entice them by pledging to move up a previously-promised “ticking fee.” The company initially said it would pay 25 cents per share for every quarter the deal drags on past the end of the year. Now it’s agreed to pay that amount if the deal doesn’t go through by the end of September. It also agreed to a regulatory termination fee of $7 billion.

But Paramount is taking on billions of dollars in debt to finance its offer — something critics have warned could only increase to the likelihood of potential job losses and other restructuring down the road. Foreign sovereign wealth funds have also provided equity for the offer, drawing added scrutiny.

GENEVA (AP) — Iran and the United States began indirect talks Thursday in Geneva over Tehran’s nuclear negotiations viewed as a last chance for diplomacy as America has gathered a fleet of aircraft and warships to the Middle East to pressure Tehran into a deal.

U.S. President Donald Trump wants a deal to constrain Iran’s nuclear program, and he sees an opportunity while the country is struggling at home with growing dissent following nationwide protests last month. Iran meanwhile has maintained it wants to continue to enrich uranium even as its program sits in ruins, following Trump ordering an attack in June on three of the Islamic Republic’s nuclear sites, part of a bruising 12-day war last year.

If an American attack happens, Iran has said all U.S. military bases in the Mideast would be considered legitimate targets, putting at risk tens of thousands of American service members. Iran has also threatened to attack Israel, meaning a regional war again could erupt across the Middle East.

“There would be no victory for anybody — it would be a devastating war,” Iranian Foreign Minister Abbas Araghchi told India Today in an interview filmed Wednesday just before he flew to Geneva.

“Since the Americans’ bases are scattered through different places in the region, then unfortunately perhaps the whole region would be engaged and be involved, so it is a very terrible scenario.”

Geneva talks are the third meeting since June war

Araghchi again is passing messages to Steve Witkoff, a billionaire real estate developer and friend of Trump who serves as a special Mideast envoy for the president. The two men held multiple rounds of talks last year that collapsed after Israel launched its war against Iran in June. These latest talks are again being mediated by Oman, a sultanate on the eastern edge of the Arabian Peninsula that’s long served as an interlocutor between Iran and the West.

Araghchi met Oman’s Foreign Minister Badr al-Busaidi after arriving in Geneva on Wednesday night. The men “reviewed the views and proposals that the Iranian side will present to reach an agreement on the Iranian nuclear program, based on the guiding principles agreed upon in the previous round of negotiations,” a report from the state-run Oman News Agency said. Al-Busaidi will pass on Iran’s offer to American officials on Thursday, it added.

An Associated Press journalist saw al-Busaidi after he met with the director-general of the International Atomic Energy Agency, the United Nations’ nuclear watchdog. The Omani diplomat flashed a thumbs up to a question about whether he was hopeful for the talks.

Al-Busaidi returned Thursday to the Omani diplomatic residence on the shores of Lake Geneva . A convoy believed to be carrying American diplomats later arrived to the compound, followed by another believed to be carrying Iranian diplomats. Oman later published images of Witkoff and Jared Kushner, Trump’s son-in-law, meeting with al-Busaidi at the residence, signaling the start of the talks.

In this round of negotiations after the June war, Trump has pushed to halt Iran’s enrichment of uranium entirely, as well as address Tehran’s ballistic missile program and its support of regional militant forces. Iran has maintained the talks must remain focused only on nuclear issues.

U.S. Secretary of State Marco Rubio told reporters Wednesday that Iran is “always trying to rebuild elements” of its nuclear program. He said that Tehran is not enriching uranium right now, “but they’re trying to get to the point where they ultimately can.”

Iran has said it hasn’t enriched since June, but it has blocked IAEA inspectors from visiting the sites America bombed. Satellite photos analyzed by The Associated Press also has shown activity at two of those sites, suggesting Iran is trying to assess and potentially recover material there.

The West and the IAEA say Iran had a nuclear weapons program until 2003. Before the June attack, it had been enriching uranium up to 60% purity — a short, technical step away from weapons-grade levels of 90%.

U.S. intelligence agencies assess that Iran has yet to restart a weapons program, but has “undertaken activities that better position it to produce a nuclear device, if it chooses to do so.” While insisting its program is peaceful, Iranian officials have threatened to pursue the bomb in recent years.

“The principle’s very simple: Iran cannot have a nuclear weapon,” U.S. Vice President JD Vance told reporters at the White House on Wednesday.

Vance said Trump is “sending those negotiators to try to address that problem” and “wants to address that problem diplomatically.”

“But, of course, the president has other options as well,” Vance added.

Threat of military action sparks war fears

If the talks fail, uncertainty hangs over the timing of any possible attack.

If the aim of potential military action is to pressure Iran to make concessions in nuclear negotiations, it’s not clear whether limited strikes would work. If the goal is to remove Iran’s leaders, that will likely commit the U.S. to a larger, longer military campaign. There has been no public sign of planning for what would come next, including the potential for chaos in Iran.

There is also uncertainty about what any military action could mean for the wider region. Tehran could retaliate against the American-allied nations of the Persian Gulf or Israel. Oil prices have risen in recent days in part due to those concerns, with benchmark Brent crude now about $70 a barrel. Iran in the last round of talks said it briefly halted traffic in the Strait of Hormuz, the narrow mouth of the Persian Gulf through which a fifth of all oil traded passes.

Satellite photos shot Tuesday and Wednesday by Planet Labs PBC and analyzed by the AP appeared to show that American vessels typically docked in Bahrain, the home of the U.S. Navy’s 5th Fleet, were all out at sea. The 5th Fleet referred questions to the U.S. military’s Central Command, which declined to comment. Before Iran’s attack on Qatar in June, the 5th Fleet similarly scattered its ships at sea to protect against a potential attack.