Viacom Chairman Emeritus Sumner Redstone

Viacom (VIAB - Get Report) , which is increasingly hearing louder calls from Wall Street investors to cut its dividend, is expected to take the first steps toward shaving its quarterly payout when its recently expanded board of directors meets Wednesday in a daylong gathering, according to two people with knowledge of the board's thinking.

The owner of Paramount Pictures and cable TV stations including Nickelodeon and MTV hired Morgan Stanley and LionTree earlier this month to review its capital structure, according to news reports. The New York media company has struggled for more than two years, as losses at Paramount Pictures coupled with declining advertising sales at its pay-TV channels have sapped its cash flow.

Reducing or eliminating its dividend has emerged as one of Viacom's best options if it is to stave off a further reduction in its credit rating. Moody's last month reduced Viacom's rating outlook to negative from stable after the company's earnings for its quarter ended June 30 missed analyst forecasts. Viacom's credit rating, Baa2, stands at the second-lowest for investment-grade debt.

When the Viacom board meets on Wednesday, it will be the first gathering of all the directors who served under former CEO Philippe Dauman in addition to the five added by Chairman Emeritus Sumner Redstone, 93, and his daughter, Shari Redstone, over the course of a contentious legal battle that was settled last month.

As is customary for its September board meeting, the directors will be asked to approve the company's unit budgets for Viacom's new fiscal year, which begins on Oct. 1. And though the question of its capital structure is certain to be discussed, it's unlikely that immediate action will be taken to address the company's debt load.

Similarly, it is also expected that a decision will not be made this week on whether to give interim CEO Tom Dooley, Dauman's longtime associate and chief operating officer, the post outright. As part of the broad settlement that resulted in Dauman's exit, the board agreed to determine Dooley's future with the company by Sept. 30. Yet even that date could be pushed back, according to a source close to the conversations.

Last year, Viacom paid out $564 million in dividends, and so far this year, its cash on hand has dwindled to $192 million. That's a steep drop from a year ago when its cash holdings stood at $506 million, according to the company's financial filings. The company had nearly $12.4 billion in debt as of June 30.

"We believe Viacom is in a situation where leverage is too high (3.9 [times] debt to equity), [earnings before some costs are] flat/declining, and they are not generating enough cash to meaningfully pay down debt," Bernstein analyst Todd Jeunger wrote in an investor report earlier this week.

Reflecting the sentiments of Wall Street analysts, Juenger entitled his report Viacom: Job One for the Newly Installed Board -- Cut the Dividend (Before Viacom's Debt Becomes Junk). A Viacom spokesman was not immediately available for comment.

The question, meanwhile, of whether to sell a minority stake in Viacom's struggling Paramount film studio to Chinese real estate conglomerate Dalian Wanda, a transaction Dauman vigorously pushed for before his departure, is also expected to be discussed, though a decision is not expected.

The Redstones have opposed the Paramount stake sale but according to one of the sources with knowledge of the board's thinking, they may consider the sale of a smaller stake as part of an overall package that keeps the dividend from being slashed too aggressively. The Wanda deal was expected to garner more than $4 billion for 49% of Paramount, TheStreet was told last month.

Finally, observers anticipate the board will consider though not rule on another of Viacom's options: a potential re-merger between Viacom and CBS (CBS - Get Report) , which were separated in 2006, said one of the sources with knowledge of the upcoming board meeting. Sumner Redstone also controls CBS, part of his $40 billion media empire. 

Shares of Viacom dropped 3.4% to $36.80 on Tuesday, extending its 2016 decline to 10.6%. 

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