UPN kids pick Nick, not Mouse

Disney deal breaks down

Buena Vista TV and UPN have called off talks to run a daily two-hour Disney kids block on the netlet, but sources say UPN is now negotiating a similar pact with its sister cable company Nickelodeon.

UPN CEO Dean Valentine told Daily Variety that negotiations to move the Disney-Kellogg alliance out of syndication and onto the network were 80% done before talks broke down over significant deal points that could not be resolved.

Sources said the main issues in dispute concerned control over branding the block and deciding how much FCC-friendly programming Disney would provide.

While Valentine said the split was amicable, Buena Vista TV president Mort Marcus was bitter about the breakup, saying the two sides had a handshake deal last week and that UPN reneged on it.

UPN denies that version of events, though, as do other sources at Disney. A more likely scenario, according to those sources, is that Disney execs outside the syndication division had concerns over launching a branded Disney kids block on a network that competes with its own ABC.

Viacom, which owns half of UPN, may also have been reluctant to launch a Disney block in competition with Viacom-owned Nickelodeon.

Talks between Nickelodeon and UPN have just begun, but if a deal comes to fruition, it will be the first time the cable network provides programming for an outside outlet. Nickelodeon has become the highest-rated source for children’s TV programming, making it a thorn in the side of kids syndicators, Fox Kids Network and the Kids’ WB.

Either way, Valentine is committed to making UPN a force in the kids business, which may be a direct challenge to its rival, the WB.

“We have a long-term obligation to kids,” Valentine said. “We have an obligation to keep the broadcast kids business alive, and the government says we have a legal obligation.”

Some of Nickelodeon’s strongest shows are “Rugrats,” “Hey Arnold!” “Kablam!” and “The Secret World of Alex Mack,” however UPN has not yet negotiated specific shows it could air.

The netlet is still hoping to launch a two-hour kids block Monday through Friday and Sunday mornings, starting in fall 1999 (Daily Variety, Jan. 21). UPN has a deal with Saban to program Sunday mornings next season, but UPN is hoping Nickelodeon will take over those timeslots after one year.

A pact between UPN and Nickelodeon will provide tremendous cross-promotional opportunities for both outlets. It’s unclear whether Nickelodeon is concerned about diluting its brand through UPN, although sources say corporate synergy could win out even if there is reluctance.

Although the network kids business has become tougher, and ad money is scarce, Valentine said he sought and received support from key UPN affiliates before proceeding with any negotiations. A two-hour kids block would mean taking back an additional programming hour per day from affiliates.

Valentine said he believes the broadcast kids business can be profitable if quality is the top priority: “If we put on good programming, the ad dollars will follow,” he said. “Kids are watching Nickelodeon because it’s good.”

A deal with Buena Vista TV most likely would have included a barter ad component for the studio, meaning ad time would have to be split three ways among the network, its affiliates and Disney. That probably won’t be a problem if UPN inks a deal with Nickelodeon.

Marcus at Buena Vista is now left to decide the future of kids syndication at his studio. Timeslots for what was formerly known as the Disney Afternoon have dried up, and he’s seen the WB and UPN expand, which led Buena Vista TV to hand over sales of its syndie block to ad agency Leo Burnett, which subsequently struck a sponsorship deal with Kellogg.

The Disney-Kellogg Alliance continues through fall 1999, and because Marcus anticipated that the UPN deal would go through, he has not sold the block to stations beyond that period.

Separately, UPN on Monday signed an affiliation agreement with WNPA in Pittsburgh to replace a defecting Sinclair station. The station had been an independent since September; before that, it was a WB affiliate.