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LAYBOURNES ABRUPT EXIT Disney Cable Chief Hangs Own Shingle

New York -- Former Nickelodeon mastermind GeraldineLaybourne has abruptly cut short her tenure at The Walt Disney Co., where she waspresident of its cable unit, to form a media company that will produce kids' and women'sprogramming for television and content for the Internet.

Laybourne, 51, had a five-year contract with Disney, butshe is amicably leaving after spending just over two years as president of Disney/ABCCable Networks, which has stakes in Disney Channel, Lifetime Television, A&ETelevision Networks and E! Entertainment Television.

She said the time is ripe for her to be "getting inand rolling up my sleeves," and to use her know-how, reputation and relationships tobuild her own company and to indulge her "burning passion" to create programmingclosely tied to the World Wide Web.

"She wants to make a great difference, and I thinkthat she'll be able to do it more personally and quickly this way," saidTele-Communications Inc. president and chief operating officer Leo J. Hindery Jr.,Laybourne's friend and business associate.

Industry insiders for some time have maintained thatLaybourne -- an entrepreneurial spirit who built Nick into the dominant player in kids'programming -- has been underutilized and boxed in by the corporate culture at Disney,where plans for several new cable networks were shelved during her watch.

So in that context, industry observers said her departurewasn't surprising. Nonetheless, others said they were still caught off-guard by the timingof Laybourne's exit, which was effective immediately.

Laybourne has already rounded up Disney division ABC the first investor in her new company, which doesn't have a name yet. ABC will have aminority stake, and the amount of its investment wasn't disclosed. Laybourne -- who willbe joined by her husband, Kit, a producer of kids' programming, at the new venture -- isalso talking to other potential investors, such as USA Networks Inc. chairman and CEOBarry Diller, and to MSOs like TCI.

Hindery sees a need for the kind of programming thatLaybourne will specialize in. "It remains distressing to me that we stillsubstantially underserve women and children," he said.

ABC has already entered into a TV-production deal withLaybourne. Under that pact, ABC's broadcast network and Disney Channel will have"preferred access" to children's programming developed by her company.Eventually, Laybourne's company will look into creating a cable network of its own, ratherthan just producing programming.

Disney said it will name a successor to Laybourne shortly.The names of two candidates are already being bandied about: Disney Channel president AnneSweeney and ESPN president and CEO Steve Bornstein.

In relation to her talents, it turns out that Laybournewound up with a relatively thin portfolio at Disney. She did play a large part in thecontinuing transition of Disney Channel to a basic service from a pay service; inrevamping ABC's Saturday kids' schedule; and in focusing Lifetime on more originalproduction.

Just months after she joined the company in 1996, Disneyscrapped plans to create a 24-hour news channel -- a project that was under Laybourne'swing -- saying that it was too costly and hamstrung by distribution problems. And Disney'sdevelopment of an educational kids' channel, dubbed ABZ, appears to be drasticallystalled, if not dead. In fact, Nick has already beaten Disney to the punch with itsrollout of Noggin, which will launch in January.

"There was a lot of hoopla and fanfare when Disneyhired her, but once they had her, they didn't quite know what to do with her," saidAudrey Steele, senior vice president and director of strategic media at Zenith Media."Her successes have shown, but I think that she had a bigger list of tasks that shethought she'd be involved in. I just don't think that there was enough for her todo."

For her part, Laybourne said she wasn't frustrated atDisney, and she noted that she was one of the people who weighed in on shelving theall-news cable channel and who expressed trepidation about ABZ.

"I was part of the decision not to do the ABC 24-hournews channel, because it wasn't economic," she said. "It wasn't a good business.I'm a very split personality. Half of me is totally driven by creative, and the other halfis totally driven by business, and you have to meet both criteria to move ahead."

According to Laybourne, "Neither ABZ nor the ABC newschannel met both of those criteria. They both met the creative criteria, but they didn'tmeet the financial criteria."

However, a Disney spokeswoman said, there are still plansto test the ABZ concept. Depending on the results of focus groups, Disney Channel may testa block of programming this summer, tentatively called "Zoog Disney," whichwould be a precursor to ABZ.

In fact, two digital channels have been created underLaybourne: Toon Disney, which launched in April, and Lifetime Movie Network, which debutslater this month. However, both of those networks involve recycled programming, and notoriginal fare.

"I feel that I accomplished a lot at Disney,"Laybourne said, referring to the Disney Channel repositioning and to her input atLifetime.

Still, Laybourne's cohorts said, the change in culture fromNick's freewheeling parent, Viacom Inc., to button-down Disney was drastic.

"Gerry is an incredibly outspoken person, and shebelieves strongly in people speaking their minds," a former colleague said."Disney is not an organization where that is valued. She's also an industrious,driven person, and it was hard for her to actualize anything there."

Another one of Laybourne's former associates added, "Iheard that she was unhappy. Disney's corporate culture did not fit Gerry's entrepreneurialstyle."

Laybourne had also complained about the male-dominatedhierarchy at Disney, one source said. She had no control over Disney's cable crown jewel,ESPN, and her say in networks such as Lifetime was limited because Disney isn't a soleowner of them.

A year ago, Laybourne's name surfaced in published reportsas a replacement for Jamie Tarses, president of the still-struggling ABC Entertainment. Atthe time, Disney vehemently denied the reports.

Laybourne will be the second top female executive leaving acable network this month. USA Network founder and chairman Kay Koplovitz is also leavingher post.