Media giant Viacom Inc.'s No. 2 executive, Mel Karmazin, will step down following several years of tense relations with Viacom chairman/CEO Sumner Redstone, the company said today (June 1).

Media giant Viacom Inc.'s No. 2 executive, Mel Karmazin, will step down following several years of tense relations with Viacom chairman/CEO Sumner Redstone, the company said today (June 1).

Karmazin, who has been president/COO since 2000, will be replaced by two of Viacom's most powerful unit heads, MTV Networks CEO Tom Freston and CBS CEO Leslie Moonves.

Redstone, Viacom's controlling shareholder, also said he will step down as the company's CEO within three years and said Freston and Moonves are leading candidates to replace him.

Shares of Viacom fell to $36.30 in premarket trading, down from a Friday close of $36.89 on the New York Stock Exchange.

Karmazin, who headed CBS Corp. until it was bought by Viacom in 2000, has long been respected on Wall Street, but his tenure was characterized by tension with Redstone.

Karmazin is said to have clashed with Redstone over the years on various issues, including Viacom's acquisition strategy, the sluggish performance of its radio business and Karmazin's past sales of stock.

As recently as last month, The New York Post reported that the company's acquisition strategy had driven a wedge between the two men. At the time, Redstone dismissed the story as "scurrilous and uninformed."

One analyst says Karmazin's departure could be viewed as positive.

"Ending an internal feud could be viewed as a positive not a negative," Fulcrum Global Partners' Rich Greenfield says.

Greenfield says Karmazin's credibility had waned significantly in recent months due to weakness in the company's Infinity radio unit. Infinity was part of the CBS acquisition and an area of expertise for Karmazin, who has been a broadcast executive for over 20 years.

--Reuters

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