Media mogul Sumner Redstone's boardroom war for control of Viacom Inc. was expected to end Thursday night with an agreement for Chief Executive Philippe Dauman to resign immediately and for new board members to be installed.
Viacom's board was meeting late Thursday and was expected to ratify the deal that has been negotiated in recent weeks.
The proposed settlement, confirmed to two people close to the media company, would mark a significant victory for the ailing 93-year-old media tycoon, who lives near Beverly Hills, and his daughter, Shari Redstone. They have demanded new leadership at the beleaguered company that owns television channels MTV, VH1, Comedy Central, Nickelodeon and the Hollywood movie studio Paramount Pictures.
As part of the agreement, Viacom's Chief Operating Officer Thomas Dooley will serve as chief executive at least until the end of September, which coincides with the end of Viacom's fiscal year.
Next month, Viacom's board is expected to come up with a succession plan and consider whether to keep Dooley in the post.
Five new board members, identified by Shari Redstone in June, will take their seats immediately _ joining the old guard of the company's board of directors. Five veterans who have served for more than a decade will step down after the company's next annual meeting, which is expected to be held early next year. For the next few months, Viacom's board will have more than 15 members before shrinking next year.
The proposed settlement, which also must receive court approval, would end legal wrangling in Massachusetts and Delaware. The unprecedented skirmish between Viacom's leadership and the Redstone family centered on whether the ailing billionaire orchestrated a series of complex moves to shake up the media company _ or if he was acting under undue influence of his daughter.
In the end, Dauman and other Viacom board members did not have the staying power to battle Sumner Redstone and his determined daughter. The Redstone family holds the controlling voting shares of the Viacom and CBS Corp. _ a $40-billion media empire that was built over three decades.
Dauman is expected to serve as non-executive chairman of Viacom until Sept. 13.
Dauman won a small concession: He will have an opportunity to present his plan to sell as much as 49 percent of Paramount Pictures to an outside investor. However, the Paramount proposal must win the unanimous support of Viacom's enlarged board, so that will be no easy task.
The Redstone family has made it clear that they didn't want Viacom to unload such a significant stake of the Hollywood studio that once churned out culture-defining hits such as "The Godfather" and "Forrest Gump." The family believes that Paramount is core to the company's operations, and they didn't want a new investor to complicate the picture, particularly if the Redstones try to reunite Viacom and CBS into one media company.
Dauman's plan to bring in an investor from China infuriated the ailing Redstone, who got his start in the entertainment business 60 years ago by running a family-owned theater business. Redstone long considered Paramount to be the jewel in Viacom's crown, and he won the studio in a contentious bidding war in 1994.
Dauman had hoped a deal with a deep-pocketed investor, believed to be Dalian Wanda Group of China, would boost Viacom's flagging stock price and give the movie studio and Viacom's TV channels inroads into China.
According to people familiar with the matter, Dauman recognized that he would have to step down to resolve the impasse that has become a major distraction for the media company. The bitter battle with the company's controlling shareholders made it impossible for him to effectively run the company.
Dauman has served as Viacom's chief executive for nearly a decade. He is expected to receive a generous payout of more than $85 million.
The Redstone family, through National Amusements, control nearly 80 percent of the voting shares of Viacom and CBS. Both sides were motivated to find a compromise to end the nasty feud before a trial is set to begin in Massachusetts and a later one in Delaware.
The trial was expected to delve into whether Sumner Redstone was mentally competent or under undue influence of his daughter when he abruptly dismissed Dauman and another longtime associate, George Abrams, from a trust that will someday control his shares in Viacom and CBS.
Dauman and Abrams filed the lawsuit in Massachusetts in late May to try to reverse their dismissals from the trust and as members of the board of National Amusements.
Viacom's proposed new board members are Nicole Seligman, who previously served as the president of Sony Entertainment Inc.; Thomas May, chairman of Eversource Energy; Ken Lerer, a managing partner of a New York-based investment firm whose portfolio includes BuzzFeed and Warby Parker; Ronald Nelson, executive chairman of Avis Budget Group; and Judith McHale, a former president of Discovery Communications.
Key players on each side of the dispute recognized that a protracted battle could further harm the company, which has seen the flight of several senior executives and talent, including Comedy Central's former late-night duo of Jon Stewart and Stephen Colbert.
Viacom's stock has slid more than 45 percent in the last two years.
