Warner/Paramount sets up Hollywood to shrink from Big 5 to Big 4, a decade after Disney took out number 6

Two of Hollywood’s oldest studios may be consolidating into one. In a shocking twist after a monthslong bidding war, Paramount has emerged as the apparent victor in the fight to acquire Warner Bros.

Netflix, who backed away from the deal Thursday, had hoped to win the movie studio and its vast film library. Paramount wants it all: Movies, cable networks and news.

Almost 10 years ago, Hollywood’s big six became the big five when Disney bought most of 20th Century Fox. Now the big five looks like it’s destined to become the big four, including Universal and Sony, and the business of Hollywood moviemaking is once again in a time of profound transition.

Here’s what we know, what we don’t and some burning questions.

Why did Netflix bow out of the fight?

Simply put, it was no longer “financially attractive,” the company said.

In December, Netflix had reached a deal to acquire some of Warner Bros. Discovery’s assets: Their library, movie studio and HBO. Almost immediately Paramount, who months earlier had expressed interest in purchasing Warner Bros., initiated a hostile takeover bid for the whole company, which culminated in a $31 per share offer this week. Netflix, whose previous offer was $27.75 per share, declined to counter.

“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.”

Warner had repeatedly backed the deal it struck with Netflix 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.”

David Zaslav, the chief executive of Warner Bros. Discovery, said in a statement that they’re excited about, “the potential of a combined Paramount Skydance and Warner Bros. Discovery and can’t wait to get started working together telling the stories that move the world.”

What are Paramount’s plans with Warner Bros.?

Paramount Skydance chairman and CEO David Ellison has said that he would like to........

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