Roger Yu

USA TODAY

Billionaire media mogul Sumner Redstone is getting the management change he wants at Viacom.

Viacom’s board of directors voted Thursday to remove Philippe Dauman as CEO, replacing him immediately with COO Thomas Dooley as interim CEO, ending a protracted legal fight between Dauman and the Redstone family that has clouded its business outlook.

The vote, confirmed by two people familiar with the development, took place after the parties began negotiating for a settlement to end the lawsuits that are currently filed in three states. The people spoke anonymously because the change isn’t ready to be announced. An announcement from the company, which owns Paramount Pictures, Nickelodeon, MTV, VH1 and BET, is expected imminently, the people said.

The settlement calls for Dauman to stay on as non-executive chairman and a board member until Sept. 13, giving him some time to present to the board his proposal to sell a 49% stake of Paramount. The company's fiscal year ends Sept. 30, and Dooley's status will be reviewed at that time by the board.

Dauman, who has been one of the most highly compensated CEOs in the U.S. in recent years, will leave with a $72 million severance package, according to The New York Times.

Viacom declined to comment.

Viacom's future is as murky as management turmoil

Dauman's departure would signal the Redstones' tightening of their control over the beleaguered company's management. Sumner Redstone, 93 and in frail health, and his daughter, Shari Redstone, own National Amusements Inc., the theater company that owns 80% of the controlling stock of Viacom and CBS Corp. They've sought to remove Dauman as CEO for months, citing Viacom's sluggish financial performance. Dauman, backed by several board members, fought back in courts, claiming Sumner Redstone was not mentally capable of making business decisions.

As part of the settlement, Viacom's board will be expanded as the five individuals recently nominated by Redstone will join the current 11 members. They are: Kenneth Lerer, managing partner at Lerer Hippeau Ventures and the chairman of BuzzFeed; Thomas May, chairman of Eversource Energy; Judith McHale, CEO of Cane Investments and former CEO of Discovery Communications; Ronald Nelson, executive chairman of the board of Avis Budget Group; and Nicole Seligman, former president of Sony Entertainment.

Sumner Redstone moves to replace 5 Viacom directors, including Dauman

The battle over Viacom's management erupted earlier this year when Sumner Redstone, who was Viacom's chairman until February, removed Dauman and another board member, George Abrams, from his trust that controls his business interests if he dies or is declared mentally incapacitated. Dauman and Abrams filed a lawsuit in Massachusetts to be reinstated, saying Shari Redstone is unduly influencing her father. Shari Redstone has said her father is making his own decisions. Redstone and his lawyers tried to move the case to California, where he lives.

In June, the Redstones, via National Amusements, filed legal documents in Delaware to replace five of Viacom's directors, including Dauman, Abrams, lead independent director Frederic Salerno, Blythe McGarvie and William Schwartz. The Redstones then named the five replacement members. Salerno sued to block the change.

Viacom Q3 income falls, beats estimates

Viacom's management change will instantly provide a much-needed jolt to its operations and be welcomed by many investors and analysts who follow the company. Viacom has some of the most recognizable entertainment brands, and its cable networks collectively have the highest viewership total in the business.

But its shares have fallen 6% in the last five years as it failed to respond quickly to changing TV consumer appetite and behavior and the rapidly encroaching business threats posed by video streaming technology. With ratings at its cable networks falling, revenue growth has been sluggish and its net income in the most recent quarter fell 27%.

To raise funds to pay off some debt and fund other Viacom businesses, Dauman is looking to sell a 49% stake in Paramount. Chinese conglomerate Dalian Wanda Group is said to be in negotiations with Dauman for the deal, and completing it would give Paramount a formidable distribution partner in China.

Sumner Redstone considers Paramount Viacom's most valuable brand and is reluctant to give up much of the company's control. Any deal for Paramount would require a unanimous approval by the board.

Follow USA TODAY media reporter Roger Yu on Twitter @ByRogerYu.