Shares in Warner Bros. Discovery and Paramount Skydance have surged following reports that Paramount Skydance is preparing an offer to buy the rival studio.

The reported bid would be for the entire Warner Brothers Discovery business, which includes news network CNN, HBO, and the film studio behind Barbie and Harry Potter.

The deal would mark further consolidation in the US media industry, which has been dramatically reshaped by the rise of streaming, and comes as media firms face scrutiny from President Donald Trump's administration.

Warner Brothers Discovery declined to comment. Paramount Skydance did not respond to a request for comment.

The potential offer from Paramount Skydance was first reported in the Wall Street Journal.

The firm is led by David Ellison, whose father, Oracle co-founder Larry Ellison, briefly became the world's richest man this week.

It comes just weeks after the completion of Paramount Skydance's own $8bn (£5.89bn) merger, in which David Ellison's independent movie studio Skydance purchased Paramount, home of the CBS news network and hits such as Yellowstone.

Mr Ellison is also reportedly closing in on a plan to by The Free Press, a digital media outlet co-founded by Bari Weiss.

Warner Brothers Discovery shares closed up 29% on Thursday while Paramount Skydance closed up 16%.

The Wall Street Journal reported that a bid had not been submitted and the plan could fall apart.

David Ellison has been in the film business since dropping out of University of Southern California roughly two decades ago, eventually earning his own reputation in Hollywood as a producer on films such as Top Gun Maverick and World War Z.

His father, an ally of Trump, this week briefly overtook Elon Musk as the world's richest person, worth more than $380bn, according to the Bloomberg Billionaires index. Trump earlier this year floated his name as a potential TikTok buyer.

The Paramount takeover plunged his son into politics as well.

The deal faced a lengthy approval process due to a row over Trump's legal battle with CBS over a Kamala Harris interview he alleged had been edited to favour the Democratic Party.

Paramount eventually agreed to pay $16m to settle the dispute. The money will go to a future presidential library.

The settlement did not include a statement of apology or regret.

Democrats have called the payment a "bribe" - an accusation that Paramount has denied - and demanded documents about the negotiations from the firm.

Announcing the approval of the deal, the government said Skydance had committed to ensure its programming would "embody a diversity of viewpoints", end Paramount's diversity programmes, and appoint an ombudsman to review complaints of bias.

Ahead of the approval, Paramount said the Late Show with Stephen Colbert would end its run in May 2026. The move drew questions from Democrats about whether the cancellation was due to political reasons, which the firm denied.

Paramount in July also announced a five-year deal to air the satirical adult cartoon series South Park on its streaming network, poaching the show from HBO.

Warner Brothers Discovery is the product of a 2022 merger. Since the deal, it has struggled with debt and has made significant job cuts.

The company said earlier this year it planned to split the business, dividing its streaming brands from its more traditional cable television business.