Nov. 7 (Bloomberg) -- Shari Redstone resigned as chairman of Midway Games Inc., the money-losing video-game company controlled by her father, billionaire Sumner Redstone, to focus on refinancing efforts at the family's National Amusements Inc.

Peter Brown, a member of the board since 2005, was appointed to replace her, Chicago-based Midway said today in a statement. Brown is the chairman and chief executive officer of AMC Entertainment Inc., the movie theater chain.

National Amusements, which controls both Viacom Inc. and CBS Corp., was forced to sell $233 million of its holdings in both media companies last month to remain in compliance with debt covenants. Shari Redstone, 54, is part of the board committee at National Amusements overseeing talks with banks.

``This introduces another unexpected level of uncertainty regarding the outcome of ongoing negotiations between National Amusements and its lenders,'' Tuna Amobi, an analyst at Standard & Poor's in New York, said in an e-mail. ``It also probably raises a near-term likelihood of potentially sizable asset divestitures resulting from those negotiations.''

He recommends buying shares of Viacom, holding CBS and doesn't own stock in either company.

A sale of Midway wouldn't solve Redstone's cash problems, said Michael Pachter, an analyst at Wedbush Morgan Securities in Los Angeles. Midway Games, maker of ``Mortal Kombat,'' hasn't reported a profit since late 2004 and the stock has declined 80 percent this year.

`Generating Losses'

``There's obviously not a lot of revenue there,'' said Pachter, who rates Midway shares ``hold'' and doesn't own them. ``And they're generating losses.''

Wanda Whitson, a National Amusements spokeswoman, said Shari Redstone wouldn't comment beyond the statement. Midway spokesman Geoffrey Mogilner declined to comment, referring calls to National Amusements. AMC spokeswoman Melanie Bell didn't immediately return a call seeking comment. A call to the company's news line also wasn't immediately returned.

Sumner Redstone, 85, declined to comment through a spokeswoman. He has owned shares of Midway since at least 1999 and held about 86 percent of the stock through various entities as of February 2007, according to data compiled by Bloomberg.

Midway rose 3 cents to 56 cents today in New York Stock Exchange composite trading, giving it a market value of $52.3 million. The stock's all-time high of $26.82 occurred in September 1997.

To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net; To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net.

Last Updated: November 7, 2008 18:39 EST