Shares of Viacom Inc. (NASDAQ: VIA) (NASDAQ:VIAB) -- the company behind Paramount Studios and popular TV channels like Spike, MTV, Comedy Central, and more -- have dropped 45% in the last two years.

In this segment from the Industry Focus: Consumer Goods podcast, Vincent Shen and Daniel Kline explain why. Listen in as they lay down the basics of what's been going on in the managerial suite that's making shareholders so uneasy, what both the parties involved want for the company, and what our analysts make of the drama thus far.

The two also discuss the drama going on in the Redstone family, which controls 80% of Viacom stock, including the reasons why it may not be longtime family patriarch Sumner Redstone calling the shots anymore. That could ultimately lead to big shakeups for the company including some board members and maybe even the CEO losing their jobs.

A transcript follows the video.

This podcast was recorded on May 31, 2016. 

Vincent Shen: Back in early April, Sean and I had discussed some of the high-level drama at Walt Disney when Thomas Staggs, who was then the chief operating officer of the company and who appeared to be the natural choice to replace CEO Bob Iger after his retirement, he ended up actually resigning rather abruptly, and he threw the established succession plan into question. There were some reports that touched on the behind-the-scenes conversations that may have been happening among the management team and board of directors at Disney that may have led to Staggs' departure after working at the company for about a quarter century.

This kind of corporate drama is, really surprisingly, not that uncommon among even some of the world's largest publicly traded companies, and today Dan and I will be looking at the scene that's currently unfolding at Viacom. Just to give our listeners some high-level perspective of the story here, the setting is Viacom, which has suffered about a 45% decline in its share price over the past two years.

The company operates via two primary segments -- its media networks, so think about channels like Nickelodeon, Comedy Central, MTV, Spike, and then also its filmed entertainment business with Paramount Studios, and they have some pretty well-known franchises like Mission: Impossible and Transformers. Both these businesses are facing headwinds, I think: on one hand, cord-cutting among its television networks, and then on another hand, its lack of steady movie franchises for its film business.

Then now to the actors that we have involved: So first, that's the founder of the company, Sumner Redstone, the media mogul. He acquired Viacom back in '87 ...

Dan Kline: He bought the company when it was still part of CBS, and then eventually they were split into two. To dial it back, Sumner Redstone controls about 80% of the voting shares in Viacom through a trust, and that's where the intrigue is starting to happen.

Shen: Absolutely, yeah. Thank you for clarifying. I realize not quite so much a founder, but the person who's brought Viacom and curated it to the business that it is today.

Kline: He's been the unquestioned kingpin of Viacom and CBS, no matter what his title has been. He's been CEO, he's been chairman, he's been super-duper chairman, sort of whatever title. I just made that last one up, but whatever title you need, he's had, and now the question is, is he still the one calling the shots?

He's had some major health issues, and recently there was a court case where his longtime caretaker and partner sued and basically said, "Hey, I should be making his decisions, that's what he wants, he's not capable." He was actually seen by a geriatric psychologist -- I may not be getting that title exactly right -- who determined that, while he clearly had some dementia, he was capable of deciding who would take care of him.

Now, what wasn't ruled upon -- and that's very important here -- is it was not decided if he was actually competent to be making business decisions. That's something that the Viacom board would like to force, but it has not happened yet.

Shen: Yes, yes. You know, beyond Sumner Redstone, I think, the really important people who are involved in this drama right now are his daughter, Shari Redstone, and then CEO and executive chairman -- which is a title that he got somewhat recently, earlier this year -- Philippe Dauman, and then the rest of the board of directors at Viacom.

Kline: Well, the challenge here -- so, Shari Redstone will eventually own all of her father's stock or have control of it through a trust, and what has been happening is Dauman and another trustee have been kicked off the trust, and they're suing to prevent that. The reason this is important is whoever controls that trust eventually controls Viacom and CBS, and you can look at this one of two ways. The Viacom board is alleging that Shari Redstone is orchestrating all this, that she wants to replace these people so she can have control. Shari Redstone is saying, "No, this is what my father wants, he's not happy with the performance at Viacom," which could ultimately lead to a major change on the board there and even Dauman losing his job.

That's something that the independent directors on the board have been fighting, so there's a lot of sort of policy intrigue here. The big question is -- and we talked about this a little while ago -- is it good business sense? Is it that Viacom's not doing well, so, "Hey, let's make some changes," and that's what both Shari and Sumner want; or is this Shari Redstone saying, "Hey, I'm going to use this as a way to consolidate my power base, kick this guy out, and then I'll be the puppet master behind the throne?" It's really hard to know, because Sumner Redstone has been held in seclusion.

Shen: Yes, absolutely. From what I saw, he actually hasn't made a public appearance, I think, since his birthday, his 92nd birthday party last year, and he actually just turned 93 on Friday.

Kline: Yeah, and I think it's worth talking about: I read the transcript of his interview for this court case, and at times he ... he needed to work through an interpreter. At times, he was completely unaware. He used language that I would say was salty even by construction-site standards. He was definitely not the in-command media mogul we know, so just by reading the transcript, it's very clear that Sumner Redstone, while you can't make a judgment of whether he's aware of what's going on, he's clearly diminished.

He's not the person he once was, so we don't know. Is he calling the shots? Is Shari Redstone calling the shots? Should Dauman be replaced? The company has not done very well, and the big issue is Dauman and the board want to sell a stake in Paramount, and supposedly Redstone is against that, or Sumner Redstone is against that.

Shen: Yes, yes. He has generally been a big supporter of the idea of keeping all of Paramount ownership in house. It comes down to, with Dauman and another director, George Abrams, being essentially removed from the trust, so from seven to five people, and essentially the idea that Shari will probably fill those two spots, if she does, with people who kind of support what she wants.

Kline: She's actually named her daughter and another close confidant to those spots.

Shen: There you go.

Kline: That said, this is the Redstone family trust. Who would you expect to be named to it? I mean, I was hoping, but my name did not come up. Once again, I think if I had to look at this as an analyst, I would say it's probably a little from Column A, a little from Column B. Of course Shari Redstone wants to make the decisions, but I think she's also at least trying to interpret what her father wants. How much of that he's stating and how much she's guessing or trying to infer, we don't know, but Dauman obviously doesn't want to lose his job, so he's going to work hard to keep the board independent and try to fight any of this.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.