Jonathan Dolgen resigned Wednesday as chairman of the Viacom Entertainment Group, just a day after Viacom chairman and CEO Sumner Redstone restructured the company's executive lineup by naming Leslie Moonves and Tom Freston to the posts of co-presidents and co-chief operating officers.

Dolgen's resignation is effective July 15 as Viacom and its subsidiary Paramount Pictures adjust to changes set in motion when Mel Karmazin abruptly resigned as president and chief operating officer Tuesday.

Under Viacom's new structure, all the company's film operations report to Freston, while all its TV divisions report to Moonves. That left Dolgen's role as head of the Entertainment Group, which had previously encompassed film and TV production as well as Simon & Schuster and Paramount Parks, significantly diminished.

"Jon simply felt there was no appropriate place for him at Paramount," said Redstone, who hired Dolgen away from Sony Pictures when Viacom and Paramount merged 10 years ago.

Said Dolgen: "Basically, they have a new management structure. Tom and Les are qualified good guys and friends; I think they'll do just fine. But there really isn't an appropriate role for me, so it's time to go."

Said Moonves of the latest development: "I think Jonathan Dolgen did a great job. Now that the studio is being divided between Tom and myself, I think Jon felt that it was better to step down. He had a great run. He handled it with dignity and class."

Dolgen, who had nearly two years left on his contract, has spent more than a decade at Paramount, where he insisted on financial discipline and favored co-financing arrangements as a way of managing risk.

Throughout that period, he has been professionally partnered with Sherry Lansing, chairman of the Paramount Pictures Motion Picture Group. "Jon has not only been my partner and boss, he was and remains one of my best friends in the whole world and someone I genuinely love and respect," Lansing said. "I've loved working with him for over a decade. He's one of the most brilliant executives, who knows everything about whole areas of the business."

"I am saddened by today's events," Redstone said. "Jon has been a great executive and a great negotiator. Under Jon, the whole concept of co-financing and financial discipline was developed, and now the other studios are copying it. I'll miss Jon, but I won't miss him as a friend because we'll still have dinner together."

However, in elevating Moonves and Freston over Dolgen, Redstone also acknowledged that their respective divisions -- CBS and MTV -- had become the company's profit centers as Paramount Pictures struggled to recover from a two-year slump.

Redstone explained that turning the company's daily operations over to a team that included Moonves, Freston and Dolgen was not a viable option.

"There are already issues that are raised when you have two people (as co-chief operating officers), even though these guys are friends and they have respect for each other," he said. "It would have been too much in today's world to have a third person."

Redstone also said that Dolgen's departure shouldn't affect Lansing's tenure. "She'll be there," he said.

Asked if Dolgen's post will be filled, Redstone said: "I'll discuss that with Les and Tom, but I don't think so." Responding to the same question, Moonves said: "I have no idea what will be done, and Tom has the same problem on the feature side. You have Sherry Lansing, who's very strong, and (motion picture group vice chairman) Rob Friedman. So it's way too early to make assumptions."

Dolgen and Lansing's focus has been less on commanding boxoffice market share than on maintaining overall profitability.

One of their shrewder moves was agreeing to partner with 20th Century Fox on "Titanic." In exchange for domestic distribution, Paramount capped its investment at half of what was at the time a $135 million budget. When the movie climbed over budget, Paramount was protected and enjoyed the upside of a major boxoffice hit.

But while such formulas served them well for most of the decade, in the past two years the risk-averse Paramount has been in a boxoffice slump, which they have been trying to dig themselves out of by bringing in a new executive team -- headed by new production head Donald De Line -- ponying up for more expensive productions and developing a more eclectic slate.

"When I look at the whole thing, I'm happy with the success we have had, and on balance, I think we ran it extraordinarily well," Dolgen said. "We modernized the place. We fixed the way it worked inside. We made it economically viable, and the work we have done will hold the company in good stead in the future."

Said producer Scott Rudin, whose production company is headquartered at Paramount: "It's very hard to think of the company without him; he's responsible for the whole ethos of the place." While Dolgen is most often characterized as a numbers guy, Rudin observed: "In my experience, Jon's a tremendous enthusiast about movies. He loves movies and loves entertainment and is excited when something's good."

Recalling Dolgen's support for such projects as "The Truman Show," "The Firm" and "The Hours," Rudin said: "He's been a great partner for me."

On the TV side, the record was more mixed. Paramount TV prospered in the early '90s with such shows as "Frasier" and the syndicated "Star Trek" spinoffs, but despite an occasional hit like "JAG," it has not maintained that momentum.

Dolgen did play a key role in the launch of the UPN network, which reported to him until December 2001. But then, in one of the first suggestions of how fortunes were changing at the company, UPN was assigned to Moonves' supervision so that it would be more closely aligned to CBS.

Said producer Steven Bochco, who first worked with Dolgen in the mid-'80s when Dolgen was at 20th Century Fox and who later signed an overall deal at Paramount: "I always sensed that he was less interested in TV than the picture business. I think his feeling about television was you get good people in there and you leave them alone. But he and I almost never talked business. We've really been pals. Jon has a wicked wit and is a great guy and a loyal friend."

Commenting on Dolgen's standing among his fellow moguls, MPAA chief Jack Valenti said: "Jon has always been well respected because he is so smart and fiscally alert. He has always been a great counselor to me -- and when he gave you advice, he gave it straight up."

Dolgen insisted that there was "no frustration" on his part in leaving before the hoped-for turnaround he and Lansing have been working on. "It's been 10 years," he said, noting that he'd recently marked his 59th birthday. "It's time to have a change, to do one more thing. You don't control the timing of these things. You just take life as it turns out."

Andrew Wallenstein contributed to this report.