FX's decision to cancel Middle East-set drama Tyrant after three seasons caught many industry observers (and viewers) by surprise this week but, as it turns out, the series was on the bubble as far back as the season two finale.

FX president John Landgraf said Wednesday that this week's season three finale of the Howard Gordon and Chris Keyser drama would actually be a series finale. Meanwhile, Fox 21 — which produces Tyrant — had a different future in mind for the Adam Rayner starrer, and said in a statement that they would "love to find a way to keep it in production."

To hear Fox 21 president Bert Salke tell it, producers knew after season two that Tyrant was on thin ice should its viewership not grow in season three.

"We knew after the second year and were really aware that for a show we felt so strongly about — and the fan base felt so strongly about — that the numbers weren't commensurate with the base for the show," Salke told THR on Wednesday of the pricey drama. "Nobody was more aware than the FX people and John wanted to get in front of it."

Salke noted that Landgraf gave the series an opportunity to continue telling its story and, should it end, provide a satisfying conclusion to its small but loyal viewership — but if the numbers grew, the drama would likely live on. To that end, Landgraf would provide regular weekly ratings updates to Salke, Gordon and Keyser.

"Chris, Howard and the studio went in with very open eyes and hoping for the best," Salke says. "We were getting behind it the same way we do every year and preparing for any number of outcomes. There were no surprises."

As part of their plan to build viewership — season two averaged 2.47 million total viewers and 1 million adults 18-49 when factoring in seven days of DVR — producers enlisted The Good Wife's Chris Noth as a series regular for season three. Last week's penultimate episode of season three drew just 830,000 live viewers, with Tyrant averaging 1.5 million total viewers with three days of DVR.

"The studio, Chris and Howard all felt the show was better creatively than it had ever been," Salke says. "But as the year went on and the numbers weren't bumping up, we were aware of where these last episodes were going to go and had to make a satisfying ending and make sure we left things — if indeed it would leave FX, which John would decide — open for opportunities if need be."

Had that uptick occurred, Tyrant likely would have made it to a fourth season at FX but instead, Salke is optimistic that the drama will land at a streaming service (like Netflix, Hulu or Amazon) with the studio "actively engaged" in finding Tyrant a new home, with a decision on the show's future expected to happen "quickly."

Salke says Hulu, which currently has the rights to the first two seasons of Tyrant, appears to be the most likely candidate. The streaming service, which at press time denied talks were underway for Tyrant, recently rescued Nashville from death after ABC canceled the country music drama ,and did the same for The Mindy Project after Fox opted out. Reps for Netflix also denied that the streaming giant is in talks or has interest in picking up the show.

"Conversations are ongoing and they are meaningful because we're invested in the show," Salke says. "When this happens, it's more likely than not that when a show dies on cable or broadcast, the studio walks away. In the old days, that's all you had. Now you talk about it but the truth is you don't jump in unless you really have a passion for the show and believe there's life and an audience left for the show. We believe that."

That Tyrant even got to a third season was considered a surprise at the time of its renewal after multiple (expensive) set relocations and a critical backlash. Working in its favor was the fact that the series was produced by FX corporate sibling and that Landgraf believed in the future of the show's creative. The well respected executive previously told reporters that he had a formula for determining a show's renewal: "I and my team get one vote, [critics] and the other experts get one vote, and the audience gets one vote. Two votes gets a show picked up, but we overrule a two-to-one vote against us for a time if we believe either the audience or the experts will come around based on the quality of the show."

Sums up Salke: "We all talk about how there's a lot of TV and how TV has evolved in this 'Peak TV' era but we rarely talk about those good things that are offshoots of all this growth — like the movement and ability of Nashville or Tyrant, God willing. To keep shows going is really a benefit that seven years ago was so unusual. I believe you'll see it a lot more and we're all grateful for it."