For Sumner Redstone, another one bites the dust.

Just two and a half years ago, Paramount, part of Redstone's Viacom media conglomerate, outbid NBC Universal and paid a staggering $1.6 billion for DreamWorks, the studio founded by Hollywood wunderkinder Steven Spielberg, David Geffen, and Jeffery Katzenberg.

That purchase helped Paramount Studios C.E.O. Brad Grey partially revive that Viacom property with the considerable help of several DreamWorks hits, notably Transformers and Blades of Glory.

But DreamWorks' relationship with its corporate parents—Grey, Viacom C.E.O. Philippe Dauman, and Redstone, Viacom's chairman and C.E.O. of National Amusements Inc., which controls the whole empire—has turned contentious. DreamWorks accuses Viacom of hogging credit while hog-tying its creativity.

There has certainly been little heed paid publicly to building bridges within the company. Dauman brushed off the studio's importance to Viacom at a Goldman Sachs media conference last fall, for example.

The frayed relationship seemed to be in the final stages of unraveling Wednesday as news broke that Reliance A.D.A. Group, an Indian conglomerate with a growing entertainment arm, is in talks to invest over half a billion dollars in DreamWorks.

The investment comes just as Spielberg's contract with Viacom expires—and, by industry consensus, he readies to leave Paramount. (Calls to DreamWorks and to Spielberg's representative weren't returned.)

It all could have ended so differently.

But Redstone has proven time and again over the past several years that he is not one to shy from a public feud. Starting with the ouster of then-Viacom president and C.O.O. Mel Karmazin in 2004, Redstone has unceremoniously cut ties with a string of high-profile personalities, including both of his adult children, other top executives like Tom Freston, as well as Hollywood powers, notably Tom Cruise. Spielberg would be only the latest.

According to Richard Greenfield, an analyst with Pali Capital in New York, Redstone's concern at the moment should be with Viacom's stock price, rather than a series of feuds.

"The stock's performance continues to underwhelm, despite a solid performance by the company," says Greenfield, who today released a research report, picked up by The New York Times financial blog DealBook, reviving his two-year-old suggestion that Viacom would be better off as a private company.

Greenfield declined to discuss Redstone's relationship with Spielberg or any of his much-publicized feuds over the past several years, but he emphasized that Viacom needs to adjust its capital structure "to take advantage of where the stock is."

"I don't even think the film business factors into people's thought process," Greenfield said, adding that Viacom's cable business—it owns a host of cable channels, including MTV, Nickelodeon, Comedy Central, and CMT—is more a cause for concern for investors.

On the other hand, Viacom's cable business isn't generating alarming trade-paper headlines or bating the breath of an entire industry. The DreamWorks dustup is.

And the public perception created by Spielberg's departure—that Redstone is an executive increasingly out of touch, alienated, and unable to hold on to talent—either executive or creative—may prove harder to alter than any stock price.