Key Nickelodeon Executive Quits to Head Venture by Disney, Cap Cities

Geraldine Laybourne, the executive who built Nickelodeon into the top-rated 24-hour cable network and one of the most profitable channels, is leaving Viacom Inc. to head the cable programming efforts of the combined Walt Disney Co. and Capital Cities/ABC Inc.

In the first signs of how Disney will consolidate assets after its merger with Capital Cities, the company named Laybourne on Friday to the newly created position of president of Disney/ABC Cable Networks, which will include the Disney Channel, the proposed ABC all-news channel, and ABC’s investments in Lifetime and A&E; networks.

ESPN and ESPN2, of which ABC owns an 80% stake, will continue to report to Steven Bornstein rather than to Laybourne, who will be based in New York. She will report to Robert A. Iger, president and chief operating officer of Capital Cities.

“I built something that will last forever,” said Laybourne, explaining her decision to leave Nickelodeon after 15 years. “It was time to spread my wings and take on some new channels.”

Laybourne, who is 48 and has been president of Nickelodeon for 10 years, will join Capital Cities after the merger is complete. Shareholders vote on Jan. 4, and regulatory approval is expected by mid-February, according to Disney officials.

Industry executives said Capital Cities is considering several cable start-ups, including a music channel to compete against Viacom’s MTV, a rival to Nickelodeon, and possibly a classic channel similar to the Nickelodeon spinoff developed by Laybourne called Nick at Nite, which airs reruns of sitcoms during prime-time.

Iger refused to talk about the company’s start-up plans or its strategy for repositioning existing channels. “Her mandate is to assess the assets and look for ways to grow them,” said Iger, who added that he had been up for 48 hours negotiating the deal with Laybourne. “We also expect her to create new programming assets.”

Analysts praised the hire as a coup for Disney, which has had mixed success in exploiting its powerful brand name in the world of cable and children’s television.

“Disney’s approach is that all kids are bright-eyed and properly dressed,” said Christopher Dixon, an analyst at PaineWebber Inc. “Gerry will bring a certain anarchy that kids love--like the fun of being slimed--to a staid and austere organization. The Disney Channel hasn’t been growing that well; it’s hard to think of three memorable shows it’s had.”

Top management at Viacom downplayed the impact of Laybourne’s departure on the network. But industry sources said her resignation is a setback for Nickelodeon at a time when the network has several new channels in the works and hot competition.

“She was a cult leader,” said one cable executive. “The place could fall into disarray without her and I would guess many people will follow her to Disney.”

Indeed, many employees broke into tears after Laybourne announced Friday morning to her staff her plans to leave. Tom Freston, chairman and chief executive of the MTV Networks, was named temporary president of Nickelodeon/Nick at Nite.

Freston said he plans to choose a successor to Laybourne quickly, and that the network would be run day-to-day until then by Jeff Dunn, executive vice president of strategy and business operations, and Herb Scannell, executive vice president of Nickelodeon Network.

Among cable networks, Nickelodeon ranks fourth in cash flow and fifth in revenues, reaching 63 million subscribers with such original cartoons as “Ren & Stempy,” “Rugrats,” “Clarissa Explains It All,” and “Doug.” In fiscal 1995, it had operating profits of $178 million on revenues of $425 million, accounting for about half of the profits of MTV Networks, according to analysts.

But the network has several challengers. Time Warner’s merger with Turner Broadcasting System is expected to boost Turner’s Cartoon Network, already one of the fastest-growing new channels. And Fox Broadcasting Co. is expected to launch a 24-hour channel from its successful Fox Children’s Network.

Laybourne is expected to revamp Disney Channel, a mostly pay cable service that could be converted to a basic service to challenge Nickelodeon.

With about 15 million cable subscribers built up over about 15 years, the Disney Channel is not exactly a household name. Some cable sources expect the company to bundle the popular ESPN with the Disney Channel, on the theory that no cable operator would dare bump the sports network from their systems.