'Anchorman 2' will not be made, with Paramount Studios refusing to finance the project.
Paramount Studios has passed on 'Anchorman 2'.
Director Adam McKay admitted Paramount Studios has not given their backing to the project, despite saying earlier this week the movie was close to filming.
Writing on twitter, he said: "So bummed. Paramount basically passed on 'Anchorman 2'. Even after we cut our budget down. We tried.
"To all who asked: no we can't do 'Anchorman 2' at another studio. Paramount owns it."
The first movie 'Anchorman: The Legend of Ron Burgundy' - which starred Will Ferrell as the titular TV news host - was a huge success upon its release in 2004, grossing $90 million worldwide.
He said: "Graciously, Steve and Paul and everyone agreed to cut their price to come and do the sequel, which you don't see very often in Hollywood - and cut their price substantially.
"But even with that, it's just a budgetary thing with Paramount in terms of how much they'll give us to make it."