Viacom CEO Philippe Dauman’s battle with Chairman Emeritus Sumner Redstone could hurt the company’s ability to borrow: Standard & Poor’s Global Ratings today lowered its assessment of Viacom’s management and governance to “fair” from “satisfactory.”

It reaffirmed the BBB-rating for the company’s debt but said that if the drama continues, it “could lead to a reassessment” of Viacom’s creditworthiness.

Dauman’s suing to have Redstone, who turned 93 today, declared incompetent following his decision last week to fire the CEO and director George Abrams from his family trust, and the board of National Amusements.

But Dauman and Abrams “are not serving and fulfilling their obligations to all of the company’s stakeholders” by fighting with Redstone, a note by Primary Credit Analyst Naveen Sarma says.

“Whatever the merits of the lawsuit (or defenses to it) this situation in our view arises from a long dysfunctional relationship between the key litigants especially as that relates to coherent succession planning by the Viacom board of directors,” the analyst adds.

Although the contretemps shouldn’t be a “significant distraction” for employees, “it does pose a risk of distraction for senior management and the board which could limit their ability to strategically navigate Viacom through the secular shifts that are affecting the U.S. television industry.”

Redstone owns 80% of the theater chain, which, in turn, owns 80% of Viacom and CBS.

The execs say that he is being manipulated by his daughter, Shari Redstone, who’s President of National Amusements and Vice Chair of Viacom and CBS.

The battle is important: Redstone’s seven-member trust will control his media empire when he’s either deemed incompetent or passes.

On Thursday, corporate bond research firm Gimme Credit — which has a “sell” on Viacom’s debt — said that if the fight forced Dauman out then it “could be good.” For example, it might change Viacom’s efforts to repurchase shares and look instead for strategic acquisitions or to sell its assets.

Still, analyst Dave Novosel said, “uncertainty regarding management and the distraction caused by the turmoil surrounding Sumner Redstone adds to our concerns.”

On Monday, Moody’s Investors Service said it did not expect Viacom’s credit to be hurt by Redstone’s attack on Dauman and Abrams.

Indeed, a change in the trust could “lead to greater independence of governance of Viacom.” If Viacom’s management also changed then “the impact on the company’s credit ratings will depend upon the company’s future financial policy and potential for improvement in operating performance.”