Viacom's rocky pay-TV picture show

(Fortune Magazine) -- In April, Paramount Pictures walked away from a deal to air its movies on pay-TV channel Showtime. Instead, it announced a plan to start up a rival channel with two other longtime Showtime suppliers, MGM and Lionsgate. To the uninitiated, that might have appeared a nugget of passing interest, as in: Great, another movie channel ... I guess.

But to those who trade in Hollywood intrigue - and who revel in schadenfreude toward media billionaire Sumner Redstone - it was further evidence of how the old man may have lost it and a sign of fighting within his vast media empire. After all, Paramount is owned by Viacom (VIA), and Showtime is owned by CBS (CBS, Fortune 500), and both are controlled by Redstone - who had orchestrated a split of Viacom into the two publicly traded companies at the beginning of 2006.

Click here to read Richard Siklos' full report via Fortune Magazine (money.cnn.com)