Fallon McElligott, Minneapolis, currently handles creative and media chores for the cable network.
USA plans to contact about half a dozen media specialists to compete for the account; it's not clear whether Fallon will participate in the media review.
Fallon, which has had the account since November 1996, has known about the move to in-house for at least six months and has been working with the network on the transition, said one executive close to the situation.
At deadline, a USA spokeswoman said she was unable to reach any company executives for comment. Fallon executives also could not be reached.
DILLER INCREASES INVOLVEMENT
USA has undergone a series of changes as new owner Mr. Diller has gotten more involved in running the network. Founder Kay Koplovitz left earlier this year, and most of the creative team she assembled followed her out the door.
Mr. Diller has made no secret that his task is to give the already well-known USA brand a clearer and stronger identity.
Fallon has created a number of campaigns for USA Network during the past two years, mostly for print and outdoor media. A TV campaign this summer carried the tagline, "USA Network. The cure for the common show."
"Most of us know [USA] from wrestling and a few other shows, but that's it," said one media buyer, who questioned the wisdom of moving creative responsibilities in-house. "I would have thought Fallon would be able to give them just the creative spark they need once USA gets its Diller programming really up and going."
The network's World Wrestling Federation shows are consistently among the highest rated on basic cable. But Mr. Diller's task is to move USA beyond wrestling.
The network's original series "La Femme Nikita" has garnered some attention, but USA has been hard-pressed to find other shows to match that success. Mr. Diller has been trying to build some fire under the "Hercules" franchise of shows by funneling some of them to USA.
Besides USA Network, Mr. Diller controls the domestic TV production of Universal Studios, under the Studios USA moniker.
While it is losing USA, Fallon is expected to confirm as soon as this week that it's adding Starbucks Coffee Co. to its roster (AA, Oct. 12).