Chao Leaves, but USA Difficulties Remain

11/04/2001 7:00 PM Eastern

One-time programming whiz Stephen Chao is out as president of USA Cable, leaving the task of overseeing its foundering flagship, USA Network, to his corporate-level successor.

Chao, who joined USA Network in 1998 as programming president and was promoted to lead the USA Cable unit, resigned last week. He leaves as the cable networks under his purview — USA, Sci Fi Channel, Trio and Newsworld International — are to be folded into a division run by another executive, a move that would have cut into Chao's power.

USA Entertainment Group, which includes Studios USA and USA Films, is assuming control of the cable networks. As of Nov. 5, Michael Jackson, formerly CEO of Channel Four Television, is president and CEO of USA Entertainment. Like Chao, Jackson is a veteran programmer from the creative side of the business.

Chao, whose post won't be filled, is credited with inventing "tabloid TV" while at the Fox broadcast network in the 1990s, with shows such as Cops. He was recruited by his former boss at Fox, USA Networks Inc. chairman Barry Diller.

But under Chao, USA Network, like a number of general-entertainment cable networks, has struggled to craft a unique brand and identity.

"Chao had free rein," one rival programmer said. "But he's one of those creatives who needs a balance wheel. And he's probably not the best guy to run a network."

Chao, who couldn't be reached for comment last week, did fairly well at USA with several original movies and Attila, basic cable's second most-watched miniseries. But he failed to create any original breakout hit series for USA, which had once mined success with a Sunday primetime lineup that included Silk Stalkings
and La Femme Nikita.

Instead, Chao developed offbeat shows that industry critics chided as not being "commercial" enough to appeal to USA's broad audience. His program roster included failures such as the variety show Happy Hour, as well as the quirky G vs E, Manhattan AZ
and The War Next Door .

"Chao was always up for an unusual idea," said Ray Solley, a former William Morris agent who runs The Solley Group, a consulting firm in Los Angeles. "He was always pushing the boundaries. He was always willing to take a chance on an idea he really liked."

Under Chao's watch, USA Network also saw its ratings tumble after the loss of mainstay World Wrestling Federation Entertainment Inc. programming in September 2000. In the third quarter, USA's primetime ratings were down 15 percent, to a 1.7, from the same period a year ago, according to Nielsen Media Research.

Chao never lost his delight in raising eyebrows and shocking people. During his tenure, he sparked controversy during a company meeting by repeating a racial slur from a movie. He wound up apologizing for quoting that movie line.

He also irked writers at the Television Critics Association tour on several occasions, once by bringing in several WWF stars, appearing in character, and another time by having scantily clad Happy Hour
dancers perform.

Under the new setup, USA Network president Doug Herzog, Sci Fi Channel president Bonnie Hammer and president of emerging networks Patrick Vien will report to Jackson. Unlike USA, Sci Fi Channel has been successful with both viewers and TV critics.

After Chao was promoted to run USA Cable, other officials were brought in to lift USA Network out of the ratings doldrums. Rob Sorcher — a veteran of Fox Family Channel and Cartoon Network — did a brief stint as general manager. He left when Herzog, former president of Comedy Central and president of entertainment at the Fox broadcast network, was brought in to head USA in March.

Herzog's programming game plan has been to create themed nights in order to build destination viewing. Original-series development includes a companion program to the late-night game show Smush.
Diller recently confirmed that this year USA is scaling back its original movie production, down from an estimated 24 a year.

Herzog couldn't be reached for comment last week.

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