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NEW ORLEANS — In a deal certain to raise eyebrows on the NATPE convention floor, Disney was close to an agreement late Tuesday to move its daily kids block out of syndication and onto the emerging UPN netlet by 1999.

The Disney-Kellogg Alliance, formerly known as “The Disney Afternoon,” would cease to exist in syndication, and a newly branded two-hour Disney kids block would air on UPN stations every day.

If the deal closes, it will give UPN a strong presence in the kids TV business, and it could make the netlet a formidable competitor to the Kids’ WB.

Details of the deal were being hammered out Tuesday evening, but sources said there’s even a chance that one hour of Disney programming will begin airing on UPN this fall, while the “Disney-Kellogg Alliance” is in its last year.

The deal is very unusual for a number of reasons — one being that Disney will have a branded daily presence on a network other than its own ABC. In fact, at least one of the shows that will be stripped on UPN, “Disney’s Doug,” already airs on ABC’s Saturday-morning lineup.

“Doug” is expected to remain a part of Disney’s Saturday lineup, and UPN and ABC will each have exclusive episodes, sources said.

UPN and Disney execs would not reveal financial details of the pact, but Buena Vista TV may ask to retain some ad time in the UPN block, similar to barter in a syndication deal. It’s unclear how the ad inventory would be split among Disney, UPN and its affiliates.

Even if the ad split is as favorable to affiliates as the split on most UPN shows, some netlet stations probably won’t be thrilled with the prospect of a daily kids block. Both network and syndicated kids programming have suffered in the ratings of late, and ad revenue has dried up, in part because of the proliferation of feisty cable outlets such as Nickelodeon and the Cartoon Network.

Sharon Maloney, general manager of WPMI Mobile, Ala., which now airs the Disney-Kellogg Alliance, said, “We’re trying to get out of the kids business because financially we’re not doing very well.”

UPN had little success with its daily teen block, a costly flop which is still on the air in some markets but will be off entirely by the end of the season. The network, however, believes that kids programming is a way to bring in family viewers.

And if the netlet is going to air kids programming, the top kids supplier to turn to is Disney. ABC’s new Disney Saturday morning has done very well this season and has given Fox, which boasts its own Fox Children’s Network, a run for its money as the No. 1 kids outlet.

UPN CEO Dean Valentine is obviously partial to Disney’s animated series, given that he helped develop those shows when he was president of network TV and TV animation at Disney. Valentine helped orchestrate the supplier’s acquisition of Jumbo Pictures, which produces “Disney’s Doug.”

Sources said UPN affiliates will probably be able to choose whether to air the new kids block in the morning or in the afternoon.

The final lineups of the potential one-hour block for 1998 and the two-hour block for 1999 were still being set Tuesday, but sources say the 1998 lineup could include “Duck Tales” and “Disney’s “Doug.”

The 1999 UPN lineup may include “Pepper Ann,” “Doug,” “Disney’s Recess” and one other show. All three of those shows now air on ABC Saturday morning.

The UPN deal is the latest move by Buena Vista TV toward getting out of the kids syndication business. In late 1995, Buena Vista handed over station sales of the block to ad agency Leo Burnett, which struck an alliance with the Kellogg Co. as a major sponsor.

Buena Vista was forced to make such a deal because timeslots for syndicated kids programming disappeared with the emergence of the UPN and WB netlets, especially the Kids’ WB.

UPN will provide Buena Vista with largely in-pattern clearances in much of the country and a chance to promote the lineup nationally.

Kellogg, whose deal with Disney lasts until 1999, is also expected to be involved with the UPN arrangement. In fact, sources said, a syndicated component of the Disney block could still be sold in markets where UPN has no affiliates.