By Sai Sachin Ravikumar

(Reuters) - Viacom Inc <VIAB.O> Chief Executive Philippe Dauman said on Thursday his victories in a legal battle with Sumner Redstone for control of the media company would help him push through a plan to sell a minority stake in Paramount Pictures.

Ninety-three-year-old Redstone, supported by daughter Shari, opposes Dauman's plan to sell a 49 percent stake in Paramount, while Dauman sees it as a way to unlock value for shareholders, who have seen their shares plummet in value in recent years.

Analysts have valued the stake at about $4 billion.

Sumner Redstone is Viacom's biggest shareholder. However, his decision to oust Dauman from both Viacom's board and a trust that will control Redstone's shareholding after he dies or becomes incapacitated is being challenged in the courts on the grounds that he is not of sound mind to make such decisions.

Redstone controls 80 percent of the voting shares in Viacom.

"The (Paramount stake sale) process has slowed down in recent weeks but we have reason to believe the favorable court developments last week will create a better environment that will allow us to progress with several parties toward a highly beneficial transaction," Dauman said on a call with analysts to discuss Viacom's quarterly earnings.

Dauman has scored two important legal wins in the past week.

A Delaware judge ruled that Redstone's lawyers must defend in a trial his move to oust five Viacom directors including Dauman, and a Massachusetts judge rejected Redstone's bid to dismiss a lawsuit by the Viacom CEO.

The lawsuit in Massachusetts, filed by Dauman and Viacom board member George Abrams, contested their removal in May from the seven-person trust that will control Redstone's majority ownership of Viacom and CBS Corp <CBS.N>.


National Amusements Inc, through which Redstone controls Viacom and CBS Corp <CBS.N>, said Viacom's quarterly results underscored the need for new leadership at the media company.

"It is time for Viacom’s current directors to stop supporting failed management and start representing shareholders, by allowing the new board to take the reins, and return the company to its position as an industry leader,” National Amusements said in a statement.

Viacom shot back with its own response, saying the company was focused on executing a strategic plan supported by a majority of its independent board.

Viacom reported a surprise rise in quarterly revenue, following six straight quarters of decline, as the owner of MTV, Comedy Central and Nickelodeon benefited from higher license fees and theatrical revenue at its movie unit.

But domestic advertising revenue continued to sink, falling for the eighth consecutive quarter.

The 4 percent slide in domestic ad revenue was steeper than the 3.8 percent drop expected by analysts on average, according to research firm FactSet StreetAccount.

The company also said that domestic ad revenue in the current quarter would be slightly weaker than in the quarter ended June 30.

Viacom issued a quarterly profit forecast in June that was well short of Wall Street expectations. The company cited disruptions stemming from the dispute roiling its board and management, as well as disappointing box-office performance of its latest "Teenage Mutant Ninja Turtles" movie.

Despite the film's weak performance, revenue in New York-based Viacom's movie business jumped 30 percent to $621 million in the three months ended June 30.

Up to Wednesday's close, Viacom's shares had lost about 47 percent of their value in the past two years, partly reflecting the company's struggle to turn around ratings, especially as younger viewers - a key demographic for networks like MTV - turn away from traditional television to view content online.

The stock, which closed at $43.99 on Wednesday, was up marginally in morning trade on Thursday.

The net profit attributable to Viacom fell to $432 million, or $1.09 per share, from $591 million, or $1.47 per share, a year earlier.

Excluding one-time items, Viacom earned $1.05 per share, beating the average analyst estimate of $1.01, according to Thomson Reuters I/B/E/S.

Total revenue rose 1.6 percent to $3.11 billion. Analysts on average had expected $3.01 billion.

(Reporting by Supantha Mukherjee and Sai Sachin Ravikumar in Bengaluru; editing by Ted Kerr and Grant McCool)