Viacom (VIAB) , in the midst of a management change after a months-long struggle for control between CEO Philippe Dauman and the family of majority owner Sumner Redstone, has little alternative but to sell off its ailing Paramount studio, according to one analyst.

The studio, suffering through a brutal summer in which its films Teenage Mutant Ninja Turtles: Out of the Shadows and Star Trek Beyond have performed below expectations, likely will lose as much as $560 million through 2017, estimated Michael Nathanson, a media analyst and partner with MoffettNathanson.

"The problem at Paramount is truly shocking," Nathanson wrote in a report Friday. "Viacom needs to sell the studio now to either a strategic buyer who can take out massive costs or find some 'easy' money, which always seems to be available."

A company spokesman did not immediately return a request for comment. Viacom's stock was up 1.4% on Friday afternoon, to $43.42, on news that the end is in sight for its management war.

At least two buyers have circled Paramount in the months since Dauman -- now reportedly on the way out with a severance package of up to $72 million -- said the company was willing to part with as much as 49% of the studio.

In July, Chinese real estate and entertainment conglomerate Dalian Wanda Group was in advanced talks, according to reports. Dalian Wanda bought independent film producer Legendary Entertainment for $3.5 billion in January and controls the AMC Entertainment (AMC) theater chain.

Wanda's U.S. representatives did not immediately respond to a request for comment.

Earlier in the year, Chinese entertainment and marketing company DMG considered making a bid, according to reports. DMG was the Chinese-based co-producer of Disney's (DIS) Iron Man 3 movie and has been actively seeking investments in other films.

Viacom was said to be looking for as much as $5 billion for the stake, according to sources with knowledge of the talks. Talks had been stopped in recent weeks, however, as Redstone and his daughter, Shari, objected to the studio sale. 

On Thursday, the Redstones struck a deal with Dauman under which the CEO will turn over the top job to COO Tom Dooley on an interim basis, remaining as executive chairman until Sept. 30, according to news reports. An official announcement is expected soon.

"As Hollywood has become more and more of a global tent pole business, Paramount doesn't have the franchise to compete with Disney, Universal or Warner Brothers," wrote Nathanson, who has a neutral rating on Viacom's stock. "Short of firing the entire Paramount leadership team, there is little a new CEO could do quickly to improve the film pipeline. The best that Tom Dooley can do is sell 100% of Paramount to the highest bidder."

Viacom investors, led by Mario Gabelli, whose investment firm Gamco Investors (GBL) is the second-largest voting shareholder in Viacom behind Redstone, earlier had pressed for Viacom to sell a stake in Paramount to generate cash. Viacom's cash has dwindled from $506 million to $192 million in the nine months ended June 30, according to its most recent earnings report.

On Aug. 9, Moody's Investors Service changed its outlook on Viacom to negative from stable and said the company needs to slash its dividend and improve its poor performance to avoid a cut to its credit ratings.

This article is commentary by an independent contributor. At the time of publication, the author held positions in Viacom and Disney.

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