After being fired as Fox TV's youthful president for hiring a male stripper to perform for distinguished guests, Stephen Chao regroups to try to retrieve the fun of his wonder years.

"What I hope to do is the same kind of thing that I did in television -- start in a little corner somewhere, keep the budgets down and present some form of innovative film for a certain price."
tephen Chao is best known for the wild finish to his meteoric career at Fox Television. In a highly publicized incident, Chao hired a male stripper to appear at a June, 1992 management conference attended by his boss -- media baron Rupert Murdoch -- and high-profile guests like former Defense Secretary Richard Cheney and Lynne V. Cheney, chairwoman of the National Endowment for the Humanities and Chney's wife. Murdoch was embarrassed and enraged by the stunt and summarily dumped Chao, one of his most trusted lieutenants. It was a mighty long fall.
     Before his dismissal, Chao, 37, had garnered a well-deserved reputation as a wunderkind of TV programming. He helped develop ground-breaking reality programs like Cops and America's Most Wanted, not to mention the outrageous dating show Studs. Only two months before the firing, Chao had been named president of Fox Television Stations and Fox News Service.
     After leaving the Fox network Chao spent seven months just cooling his heels and assessing his alternatives. Earlier this year he took a minimum-wage job at McDonald's to satisfy his curiosity about his favorite fast-food restaurant. Now back on track, he spends his days in an anonymous suite of offices along Colorado Boulevard in Santa Monica, California. Outside the building several undocumented workers loiter along the street hoping for a day job. Inside, Chao and his five employees are hard at work on the task of producing independent films for Twentieth Century Fox and programming for Q2, a spinoff of QVC shopping network that's expected to hit the airwaves next spring. That project realigns Chao with Barry Diller, his former boss at Fox and now the chairman and CEO of QVC, and has sparked wild rumors that the pair are plotting to create a fifth television network.
     Sporting a crew cut, large black-framed glasses, a polo shirt and baggy trousers, Chao no longer resembles a power-driven Fox TV executive. But the whiz-kid aspect of his personality remains intact as he discusses his past, present and future in the entertainment industry.

Q: You were often described as arrogant, outrageous and unconventional while at Fox Television. Have you changed since leaving the network last year?
A: I never gave myself any of those descriptions. The only one that I would hope to keep is unconventional, not for myself, because I don't consider myself unconventional, but for my choices in all aspects in either film or television production. It's just too hard to succeed if you follow convention. You have to present a theme in variation; you have to innovate somewhere along the line. Otherwise, it ceases to engage the viewer.

Q: What did you do after you were fired?
A: I spent about seven months traveling and horsing around and surfing and belly-button staring. At a certain point, I chose to do a film deal with Peter Chernin and Rupert Murdoch [at Twentieth Century Fox]. It was the most interesting situation, the most challenging in terms of making me think in a different way. It was an opportunity that I really, really wanted.

Q: So what exactly are you doing with Fox?
A: Although I have nothing in production yet, what I hope to do is the same kind of thing that I did in television -- start in a little corner somewhere, keep the budgets down and present some form of innovative film for a certain price. I'll be focusing on the under-$12 million range. Films are made for a lot more; films are made for a lot less, but it's a certain niche that I hope to play in because it's conceptually and financially very comfortable for me. I wouldn't feel comfortable making a $50 million movie. If you look at movies that were made in the past, the most interesting ones have tended to come from a world that bridges art and commerce, and those are, by definition, small-budget movies.

Q: Are you interested in making art films?
A: I really have no desire to make an art film. I want my films to be relentlessly commercial. I'm just saying that there are elements that are admirable from the art film and low-budget arena, namely the writers, the casting and the sensibility that I think should be relentlessly commercial.

Q: As an Asian American would you give any extra consideration to a film project that features an Asian American theme or actors?
A: The only thing I would say is that I'm probably more sensitive to Asian themes or racial prejudice themes than some other people might be. But the answer is that I would not go out of my way [to produce Asian American projects] only because in the process of looking for a movie idea or a TV idea, I just have to go for the best idea, period. If it happens to be Asian, fine, but for me to be prejudiced for it or against it would be inappropriate from a creative standpoint.

Q: Do you have any projects in the works?
A: I can't be very helpful there. Both with respect to Q2 and Fox, the specific things that I'm doing are not at a point where I can talk about them. PAGE 2

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