Mel Karmazin (search) has unexpectedly resigned as the No. 2 executive behind Sumner Redstone (search) at Viacom Inc. (VIA.B), the media giant that owns CBS, MTV and numerous other properties.

He was replaced by two senior Viacom executives, CBS head Leslie Moonves (search) and MTV chief Tom Freston, the company announced Tuesday. The moves clear the way for either Freston or Moonves to succeed Redstone, who is 81 years old, as CEO.

Redstone agreed to step down as CEO within three years and to designate a successor some time before then. Given years of rumored frictions between Redstone and Karmazin, it was not clear that Karmazin, who is 60, would eventually succeed Redstone.

Investors took the news of the management shakeup in stride. In afternoon trading, Viacom's widely held "B" class shares were off 37 cents at $36.52 in heavy trading on the New York Stock Exchange.

Meanwhile, Walt Disney Co. (DIS) Chairman George Mitchell Tuesday said he was confident in current management as Karmazin's abrupt resignation reignited speculation that he could replace current Disney CEO Michael Eisner (search).

Dissident Disney shareholders Roy Disney and Stanley Gold immediately called for the board to look at Karmazin as Eisner's replacement.

Mitchell backed Eisner in a statement when asked to comment on Karmazin's exit.

"The board has complete confidence in the current management. On the strength of our recent results we believe that confidence has been justified, and will be further validated as our performance continues to improve," he said.

Redstone, speaking in a conference call with Wall Street analysts, said it was "extremely likely" that he would be succeeded by either Freston or Moonves. While Viacom will suffer a loss of talent with Karmazin's departure, the moves help clarify the company's succession strategy, a topic that investors have been pressing the company about.

Karmazin did not return calls to his office for comment on his departure. He said in a brief statement that "for personal and professional reasons, I have decided to leave Viacom and pursue other challenges."

Redstone, speaking on the conference call with Wall Street analysts, said Karmazin left because of "frustration" with the company's sagging stock price and issues related to the company's radio division, which has been struggling.

Redstone suggested that Viacom's new management team would consider getting rid of the radio business, saying the company would have a "hard look" at the radio operation as well as other assets. "There is no sacred cow," Redstone said. "But for the time being we're committed to radio."

Karmazin worked in radio for much of his career, and is known to be close to several of Viacom's leading radio personalities including Howard Stern (search) and Don Imus (search). Imus broke the news of Karmazin's departure early Tuesday morning on a show broadcast by MSNBC.

On the call, Redstone dimissed peristent concerns that he had a rocky relationship with Karmazin. However, he also acknowledged that Karmazin did not discuss his decision to resign with Redstone directly. Instead, Redstone said he learned of Karmazin's decision to resign through another executive, whom he did not name.

Redstone stressed that no one at Viacom had asked Karmazin to resign. He also said Karmazin had been in the running as a candidate to succeed him as CEO.

In a separate conference call with reporters, Redstone parried several other questions about the reasons for Karmazin's departure. "He just decided he was better off going in another way ..." Redstone said. "Mel was frustrated about something — I hope it wasn't about me."

Redstone said he regretted Karmazin's departure and wished him well. He also said Karmazin would stay on as a consultant for two months to help with the transition.

Investors have been pressing Viacom to clarify its plans for succession, especially given Redstone's age. Even though Redstone has voting control of Viacom through a special supervoting class of stock, he made clear in his announcement that he was working with the company's board on the succession issue.

Karmazin was highly regarded in the industry and on Wall Street for his leadership of Viacom. Karmazin worked his way up through the ranks in the radio business, and became the head of CBS Corp. before it merged with Viacom in 2000.

Freston has been chairman and CEO of the MTV Networks unit since 1987. Moonves has been chairman and chief executive of CBS since 2003 and joined CBS in 1995 as president of its entertainment operation.

However, the sudden loss of Karmazin is likely to disappoint many on Wall Street. In a note to investors, Merrill Lynch analyst Jessica Reif Cohen called Karmazin's departure "a very significant negative" factor for the company since Karmazin was "an extremely talented operating executive."