Disney’s Cable TV Chief Will Leave to Form New Venture

In a surprising development that comes on the heels of other top management departures from Walt Disney Co., Geraldine Laybourne said Thursday that she will leave as president of the company’s cable programming arm halfway through her five-year contract and form her own media company.

Disney will be the first investor in her yet-to-be-named enterprise, which will create children’s and women’s programming for the Internet and television, she said.

Laybourne, a respected television executive who built Nickelodeon into the most powerful children’s cable channel for Viacom Inc., said she is eager to develop media brands for the Internet before the medium becomes more mature.

“I want to get in on the ground floor,” the 50-year-old executive said. “The Internet feels like the same environment I walked into in cable in 1979.”

Industry insiders and some Wall Street analysts say Laybourne’s departure underscores a troubling drain of top management talent that could reflect poorly on Chairman Michael Eisner’s autocratic operating style, calling into question his ability to cultivate a successor.

This spring, Disney lost Lawrence Murphy, chief strategic officer, and Richard Nanula, chief financial officer. They follow a laundry list of notable departures, including top Eisner lieutenants Jeffrey Katzenberg, co-founder of DreamWorks SKG; Gary Wilson, now co-chairman of Northwest Airlines; Stephen Bollenbach, who now heads Hilton Hotels; and Richard Frank, the former television chief.

Laybourne scoffs at the notion, which has hovered since she left Viacom to join Disney in 1996, that the rigid Disney culture stifled the entrepreneurial style that allowed her to flourish at the more freewheeling Viacom or that she did not see eye to eye with Eisner.

“When people categorize me as frustrated, I just don’t buy it,” said Laybourne, who added that the departure is amicable and that she will initially house her company at ABC headquarters in New York, where she now has her office. “I like Michael Eisner and find him to be a genius.”

Laybourne was the first high-level hire by Disney after its 1996 purchase of ABC. Some sources wondered how long she would stay after Eisner pushed out his handpicked president, Michael Ovitz, who was instrumental in recruiting Laybourne.

Although Laybourne was assigned to build on Disney’s and ABC’s cable holdings, which include the Disney Channel and minority interests in Lifetime, A&E; and E!, sources say few of her proposals were approved. Her idea to start a cable news channel for teens and a competitor to Nickelodeon were nixed. Disney finally authorized a new channel, Disney Toon, but it will run mostly existing programming rather than the original fare that is Laybourne’s strength.

“Gerry needs a lot of elbow room--she needs complete control to make something work--and felt that to maximize her contribution, she needed to be outside a corporate environment,” said a former Viacom colleague. “She has this burning desire to build something of her own and felt like if she waited, she might miss the opportunity.”

Laybourne has worked wonders reviving the Disney Channel, hiring her longtime friend and protegee Anne Sweeney as president and converting the premium channel to a basic service. During Laybourne’s tenure, ratings increased by 40% and the channel tripled its reach to 40 million subscribers.

She was instrumental in putting ABC back on the map on Saturday mornings, where her strategic direction has lifted the network to first in the ratings. Yet Laybourne, as a manager, was one step removed from the operating and creative process.

Her boss, ABC President Robert Iger, said he was saddened by her choice but he did get some warning. “She has been expressing an interest to be closer to the creative process and to be in business with her husband and came to me a couple weeks ago with this plan.”

Her husband, Kit Laybourne, is a producer who created several successful shows for Nickelodeon.

While Wall Street analysts were disappointed with Laybourne’s departure, they were encouraged that ABC would be able to draw upon her talents.

Iger said he has not started to think about a replacement, but early speculation centered on the promotion of Sweeney into the job.