The 5 Biggest Issues Facing Viacom Now That Philippe Dauman Is Out as CEO

Sumner and Shari Redstone have prevailed. Now what?

Viacom's infighting is finally over. Now it's time for the company's real work to begin.

After months of battling over the future of Viacom, Sumner Redstone has officially prevailed over Philippe Dauman, who has resigned as president and CEO of Viacom.

In the settlement, which was approved Thursday night but not finalized until late Saturday, COO Tom Dooley has taken over as Viacom's acting president and CEO. He'll serve through Sept. 30, which is the end of the company's fiscal year. Five new directors, who triggered another round of lawsuits when their names were announced in June, will be joining the board: Kenneth Lerer, Thomas May, Judith McHale, Ron Nelson and Nicole Seligman.

Dauman will stay on as nonexecutive chairman of the board through Sept. 13, and a new chairman will be selected after he departs. (His exit package is valued at $72 million.) The 93-year-old Redstone will continue on as chairman emeritus, while his daughter Shari Redstone stays on as nonexecutive vice chair.

The agreement puts an end to all the lawsuits and fighting that occurred shortly after Dauman was named executive chairman of Viacom in February, over Shari's objections.

Now that the power struggle has ended, Dooley and the new board have their work cut out for them as they try to turn around Viacom's fortunes. "I love the place. I'll do anything I can to make the company better," Dooley told The Wall Street Journal.

Here are the five items at the top of the to-do list:

1) Pick a permanent CEO

In the announcement on Saturday, Viacom said that the board will make a permanent decision about a CEO by the time Dooley's interim term ends on Sept. 30. Dooley, who joined Viacom in 1980 (he and Dauman left in 2000, and returned in 2006), is very much in the running for the permanent spot and could leave the company himself if he's passed over for the top job.

He's got less than six weeks to convince the board that he's the person to right the ship. Whoever gets the job will have to succeed where Dauman did not, and not run afoul of a board that is now solidly in Redstone's corner.

2) CBS: to merge or not to merge?

Ten years ago, Viacom and CBS Corp. split into separate companies. Now, many analysts and investors believe that Viacom's best path to success lies in merging once again with CBS. Their hope is that Leslie Moonves, who has had smooth sailing at CBS, would run both companies. However, Moonves is reportedly not interested. If Viacom board wants to partner up again with CBS, it will need to convince him, and the CBS board, that a merger would be in everyone's best interests.

3) Decide whether to sell a piece of Paramount Pictures

Dauman had been pursuing selling a minority stake in Paramount Pictures, which is one of the moves that had enraged the Redstones. But under the terms of his exit, Dauman can continue to pursue a sale and present a proposal to the board before he exits the company on Sept. 13. However, the deal would require the unanimous approval of the very board that just ousted him.

Paramount has fared the worst under Dauman's reign. This year alone, it has released a string of box-office disappointments, including Teenage Mutant Ninja Turtles: Out of the Shadows, Zoolander 2 and just this past weekend, Ben Hur, which is already being called "summer's biggest flop."

4) Stop the linear bleeding

Almost all of Viacom's cable networks have suffered big ratings drops in recent years. That's led to significant executive reshuffling. In the past 18 months alone, there have been changes at the top of TV Land, MTV, VH1, Nickelodeon and Comedy Central.

Some of those shifts are already paying off, as VH1 is now a top 10 network among adults ages 18 to 34 and recently had its strongest quarter in six years, but those new network presidents could have short tenures if they can't stop the ratings slides at their respective networks.

Despite the ratings declines, Viacom secured 8 percent CPM (cost per thousand viewers reached) increases in the upfront, which is more than double the 3 percent to 4 percent increases Viacom received last year. But the company won't be as successful next year if the ratings continue to plummet.

5) Leverage their digital success

The linear networks might be a mess, but on the digital front, Viacom has a leg up on many of its competitors. Advertisers and buyers have gravitated to its Viacom Vantage data platform, which was a key element of this year's upfront.

The company has had more success than its rivals in attracting millennials to its digital platforms. In February, the company struck an advertising deal with Snapchat, which also was a big driver of sales in the upfront (advertisers can only get access to MTV and Comedy Central's Discover Channels through Viacom).

Now the challenge is to continue to monetize that digital audience, discover new digital revenue streams and try to also drive that audience to the linear networks.