Yup. I don't want to lose ET, but at this point it's expendable in order to get a completely coherent and themed land.
So...assuming we are getting a Spongebob (or majority Spongebob) land, I'd assume Fievel would become a water play area, the ET store will become more queue (I'd guess), and the KidZone Pizza will become some sort of Krusty Krab setup. You'd also figure the Nuthouse coaster would be rethemed to Spongebob. From there...who knows. Maybe a smaller Madagascar attraction in the back? They have a show on Nick. And it would be an easier transition from Bikini Bottom to a tropical beach for Madagascar.