NEW YORK - Sumner Redstone plans to sell $945 million of stock in CBS Corp and Viacom Inc, two media companies he controls, to pay off loans that threatened to unravel the media mogul's empire.

Shares of both CBS and Viacom dropped after Redstone's announcement on Wednesday that he would use proceeds from the sales to help satisfy debt incurred by his private theater chain, National Amusements Inc.

But the losses were modest and analysts said Redstone's move could eventually benefit Viacom and CBS by settling questions about his debts.

We believe that the sales will remove an overhang from the stocks and likely provide a buying opportunity for the most attractively priced stocks in major media, UBS analyst Michael Morris said in a note.

Shares of CBS, which also affirmed its 2009 forecast of operating income before depreciation and amortization, a key media yardstick, dropped 1.3 percent. Shares of Viacom, owner of MTV and Paramount movie studio, among other media businesses, fell 1.6 percent.

Given that both stocks are up about 50 percent so far this year, Redstone, 86, picked an attractive time to sell, analysts noted.

That was hardly the case a year ago, when he sold $230 million in stock as his debt crunch worsened, spooking investors already concerned about the financial crisis.

We do not expect these sales to scare the public market as much as last fall's, Miller Tabak analyst David Joyce wrote in a note, as that was more of an incremental surprise in a market that was facing worse surprises every day.

This time around, Redstone, through his theater chain, National Amusements, will sell $600 million in Viacom shares and $345 million in CBS shares. He will keep a controlling stake of more than 75 percent in each company.

He will also sell some of National Amusements' assets to raise additional funds.

Redstone's move comes just weeks before National Amusements had a $500 million debt payment coming due. Not only can Redstone now make that payment, he can wipe out all existing debt of the theater chain. It restructured about $1.6 billion of debt in February, extending the maturity to Dec. 31, 2010.

But while Redstone will retain voting control in both CBS and Viacom, the sales take a bite out of his overall equity stake. The plan calls for him to sell all of his non-voting shares, plus a small portion of his voting shares in each. When completed, Redstone will have less than 10 percent of the equity in either company.

Instead of more stock sales -- Redstone had declared he was done with those, calling Viacom the love of my life -- the media baron had set his sights on selling some of National Amusements' movie theaters.

But Redstone shelved those plans because of what appeared to be limited interest from buyers, analysts said. For now, National Amusements will retain full ownership of its theaters in the UK and Brazil and its core theater assets in the United States.

In a statement, National Amusements said it anticipated selling some assets, but did not provide details on which ones. That money will also be used to help pay off the debt. (Additional reporting by Franklin Paul; Editing by Lisa Von Ahn, Dave Zimmerman)

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