Mighty Mouse Nips At Nick

ABC and its new proprietor, Walt Disney Co., have won a key skirmish in the war with Viacom’s Nickelodeon to become the global player in kids TV. Late last week they lured away Geraldine Laybourne – the woman who built Nickelodeon into one of the most successful cable franchises in the industry – to head their cable operations.

Signing Laybourne is the first major TV move Disney has made since the merger with ABC, sending a powerful signal that Disney-ABC has big expansion plans in mind in the entire cable arena, here and abroad.

Laybourne resigned as president of Nickelodeon and vice chairman of MTV Networks to take charge of all the cable networks – except ESPN and ESPN 2 – that will fall under Disney-ABC when the merger of the two companies becomes official early next year.

Drawing on the Nickelodeon and Nick at Nite playbook, she’ll spearhead efforts to spark the underachieving Disney Channel as well as the 24-hour all-news cable channel ABC announced earlier this month. In addition, her portfolio will encompass ABC’s 50% stake in Lifetime and 37.5% interest in A&E and the History Channel.

“This is a huge loss for Viacom and a great coup for Disney,” says Lynne Buening, VP of programming for Falcon Cable, a top-10 multisystem cabler.

“As far as I’m concerned she’s one of the greatest executives in our business,” added Disney president Michael Ovitz. “She built a business from scratch. She started from literally nothing and built the company into a major force, which speaks volumes about her ability.”

Except for Ted Turner and his shepherding of CNN since its founding in 1980, no other cable executive is so associated with one network as Laybourne, whose tender care and feeding of Nick spans the past 15 years.

With Laybourne, Disney brings into the fold the executive chiefly responsible for turning Nickelodeon and Nick at Nite into the highest-rated cable network in the country, sign-on-to-sign-off.

The cabler tapped into a projected cash flow of $164 million in 1995, which puts it behind only ESPN, CNN and MTV, according to Kagan Associates. With 64 million households in the U.S., Nickelodeon, under Laybourne’s aegis, was beginning to move into Europe, kicking off with a satellite deal for Nickelodeon two years ago in the United Kingdom.

Tom Freston, chairman and CEO of Viacom’s MTV Networks, says he’ll take on the added role of president of Nickelodeon and Nick at Nite “to get more aware of Nick’s operations and to become more involved.”

Laybourne, who had reported to Freston, “previously handled all of the day-to-day matters at Nick,” he says. Until he decides on Laybourne’s successor, Freston says he’ll rely on Jeff Dunn, Nick’s exec VP of strategy and business operations, and Herb Scannell, exec VP, Nickelodeon TV and U.S. Television, as his key lieutenants.

Laybourne denies rumors she was frustrated by Viacom’s bureaucracy, saying that over the years she ignored the siren call of Michael Eisner, chairman-CEO of the Disney Co., and Robert Iger, president and chief operating officer of CapCities/ABC Inc., each of whom had sounded her out on whether she was interested in leaving Nick. But with this summer’s announcement of the two companies’ proposed merger, “They created a real cable powerhouse,” she says.

When Eisner and Iger came up with new offers post-merger, Laybourne was all ears. Freston says he was taken by surprise when she told him she was leaving because “she was in the middle of negotiations for a new contract, and I thought she was staying on.”

Laybourne will be president of Disney-ABC Cable Networks, one of a troika of cable executives reporting to Iger. The other two are Herbert Granath, president of the ABC Intl. Broadcast Group, and Steve Bornstein, prexy-CEO of ESPN.

Sources say if Disney-ABC had installed Laybourne above Granath and Bornstein, both men likely would have resigned.

“The sports genre is so different, so specifically male-oriented, with whole different sets of gigantic contractual negotiations with professional leagues,” says Rick Sperry, senior VP of marketing for Comcast, the third-largest cable operator in the U.S., explaining why Laybourne won’t lose sleep over not having ESPN under her bailiwick.

Iger says, “We’re not trying to create an intricate management web. That’s not the way ABC operates.”

Bornstein formerly reported to Granath, but Iger says that the international division and ESPN have each grown so much over the past few years that ABC decided to divide them into separate operations. “Herb is comfortable with the new structure, and supportive of it,” Iger says.

Although ESPN will end up as a separate division, Eisner plans to link all of the sports and children’s programming owned by Disney and ABC in a worldwide marketing scheme.

While continuing to beef up ESPN’s already flourishing international operation, which reaches 160 million people in 150 countries, Disney-ABC will try to make the Disney Channel, or its equivalent, the global brand for children’s entertainment – the way CNN is for news and MTV for music. Sports and kids shows are forms of programming that have fewer problems crossing language barriers.

The hiring of Laybourne and the splitting off of ESPN into a separate division, Iger says, “are a validation of Michael’s philosophical approach.”

Laybourne’s first priority almost certainly will be to use the contacts she’s built up over the years with cable operators to get deals for the all-news channel. ABC is under the gun because the NBC-Microsoft all-news channel MSNBC, just announced last week, will get instant access to the 20 million subscribers of America’s Talking, which will drop its all-talk format for all-news within the next six months.

Also high on Laybourne’s agenda will be to figure out the future of the Disney Channel, which is studying a blueprint to change from a pay network, currently reaching only 13 million subscribers, to a basic cable network, possibly even taking on advertising at some future point.

“These are exciting times in the cable business,” Laybourne says. If Congress passes a law early next year to deregulate cable, Disney-ABC will have a good shot at chalking up a faster rollout for its new all-news network. Major investors, who have withheld money from cable while the legislation was grinding its way through the mills of the House and Senate, would open their coffers, and cable operators would be able to upgrade their systems, expanding channel capacity and making room for new networks.

“Gerry’s got to be happy,” says Larry Gerbrandt, senior cable analyst for Kagan Associates. “She’s now got a whole new set of toys to play with.”

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