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Chao Apologizes for Meeting Remark

New York-Stephen Chao, the newly promoted president of USA Cable, apologized to at least one employee last week after making what he conceded was an "insensitive" racial remark at a meeting here for USA's New York staffers.

Los Angeles-based Chao met with his New York employees in Manhattan March 31 to talk about his new role and a restructuring at USA Cable, which includes USA Network and Sci Fi Channel. According to several sources, during his comments, Chao quoted a line that actor Eddie Murphy used in the film 48HRS., and some employees took offense at the line.

"I'm going to be everyone's worst nightmare, like a [racial epithet] with a badge," Chao told the group, citing the movie dialogue.

Chao meant the comment as a joke about what some may have regarded as his unlikely rise-"mocking his own promotion," a USA source said.

While some USA staffers took the remark in stride, knowing that Chao has a penchant for being outrageous and trying to shock people, a few-including several African Americans-were offended. USA staffers were buzzing about the remarks after the so-called town meeting.

Last week, Chao would only say that he did cite the Murphy movie during the staff meeting. "It was something that I meant in jest," he said.

Added Chao, "I made an insensitive comment. Certainly, no disrespect was intended. I did apologize to one person. As a minority, I'll be more sensitive in the future."

Chao, who is Asian-American, declined to specify exactly which person he apologized to. He also indicated that he would apologize to any others who may have been offended.

Also at the staff meeting, while expressing his wish to diversify the work force, Chao jokingly referred to an abundance of "white Jewish males" at USA Cable, sources said.

Chao's boss, USA Networks Inc. chairman Barry Diller, has been a big supporter of diversity in the telecommunications industry, and recently donated $6 million to the Walter Kaitz Foundation-money earmarked to place qualified minorities in jobs in the cable and broadcast industries.

A USA Networks Inc. spokeswoman said Diller didn't have any comment on the Chao incident.

At the town-hall meeting, Chao also shook up employees when, according to several sources, he told the group, "We want a revolving door [here]. We want people to move up or get out."

There has been a mass exodus of USA executives since Diller took over and brought in Chao.

Chao-who was hired at USA by his former Fox network boss, Diller-has a history of "going to the edge," as one of his former employees said. Credited with creating "tabloid TV " at Fox, Chao was fired by Rupert Murdoch in 1992 when, as then-president of the Fox TV stations, he brought in a male stripper to perform at a News Corp. meeting attended by Rupert and Anna Murdoch.

Chao was recently promoted to the slot of president of USA Cable, the new name for USA Networks, a division of USA Networks Inc. Previously, he had been a co-president of USA Networks, serving as president of programming and marketing.