CA: Governor's muscle magazines packed with ads for supplements

SAN FRANCISCO (AP) - Tucked deep in the August 2005 issue of Muscle & Fitness magazine, past the photographs of men with chiseled muscles and stories such as "How I Built the World's Biggest Chest," is a glossy, two-page article proclaiming "It's Now Or Never!"

The article details the bodybuilding industry's efforts to block state and federal regulations on nutritional supplements. It also proclaims the support of a powerful spokesman, California Gov. Arnold Schwarzenegger.

The story describes how Schwarzenegger attended a private meeting with bodybuilding executives at the Arnold Classic in March to vow a united front in the battle to keep supplements widely available. Last year, the governor vetoed legislation seeking to regulate the use of supplements in high school sports.

"Gov. Schwarzenegger gave his support in ways both emblematic and tangible," wrote author Shawn Perine, for the issue that hit newsstands this month. "He urged all of us in the industry to stand together and speak loudly and clearly as a cohesive voice to deliver the message that supplements are not only safe but beneficial when taken as directed."

The article details just one example of Schwarzenegger's complex relationship with the nutritional supplement industry and with Muscle & Fitness and Flex magazines, both of which were launched by his bodybuilding mentor, Joe Weider. The magazines are owned by American Media Inc., which also publishes The National Enquirer, Star and other celebrity tabloids.

Those relationships have come under scrutiny with the disclosure that Schwarzenegger had inked a multimillion dollar consulting contract with the magazines' publisher two days before taking office in 2003. Schwarzenegger last year announced that he would serve as executive editor of both magazines and would write a monthly column, but he did not disclose his salary or its link to the magazines' ad revenue, which is derived primarily from nutritional supplements.

Schwarzenegger is guaranteed at least 1 percent of the magazines' ad revenue, which comes primarily from nutritional supplements. In the August 2005 Muscle & Fitness alone, 123 of the magazine's 256 pages are ads for nutritional supplements.

Schwarzenegger aides defend the arrangement, saying he has no contact with advertisers.

"Supplements may be part of the advertising income, but it's not exclusive and it's not direct," spokesman Rob Stutzman said.

Chris Lehane, a former consultant to Democratic Gov. Gray Davis, questioned the administration's logic in explaining that the governor did not have a conflict of interest.

"The vast majority of the ads in these muscle magazines are from supplement companies, and California represents the largest market in the country for these supplements," Lehane said. "Banning supplements in order to protect children would have had a huge impact on ad revenues because it would have eliminated the largest market in the country."

Paging through the magazines offers a primer in nutritional supplements, ranging from Blast Cycle: Thermonuclear Pump Agent to Axis HT Pro-Testosterone Amplifier.

And the ads don't tell the whole story. The latest issue of Flex sports a 19-page "science report" on supplements, which rates several different products and gives advice on how to use them.

"Flex generally recommends beginning slowly, adding one supplement at a time to truly measure its benefits before adding another," the story says. "Every bodybuilder relies on supplements to acquire an edge."

The New York Times weighs in:

Schwarzenegger Reimbursement Is Drawing Fire
By ANDREW POLLACK
Published: July 15, 2005

LOS ANGELES, July 14 - Arnold Schwarzenegger, who refused a state salary when he became governor, stands to earn at least $5 million under previously undisclosed terms of a contract with a group of fitness magazines, an agreement that critics called a conflict of interest Thursday.

The financial arrangement, disclosed Wednesday in a filing by the magazines' publisher to securities regulators, directly ties the governor's compensation to advertising revenues for the magazines, for which he acts as a consultant. Much of that advertising is for nutritional supplements and other performance-enhancing products.

That is attracting scrutiny because Mr. Schwarzenegger vetoed a bill last year that would have tried to restrict the use of performance-enhancing supplements by high school athletes. The governor said he vetoed the bill because it focused on dietary supplements, most of which he said were safe, instead of ensuring that students avoided illegal steroids.

The revelation could add to the pressure on Mr. Schwarzenegger from Democrats, labor unions and others in the state. Some of his attempted reforms have stalled, and his popularity ratings have sunk.

Mr. Schwarzenegger did not comment on the revelation, reported Thursday in The Los Angeles Times and The Sacramento Bee.

Jackie Speier, the state senator who sponsored the bill on student use of supplements, called for the governor to immediately sever the relationship with the magazines, which include Muscle & Fitness and Flex.

"The expectation of the electorate of California is that the governor is working full time for the people of the state," Ms. Speier, a Democrat from the San Francisco area, said.

Art Torres, chairman of the California Democratic Party, said the relationship should be examined by the state's Fair Political Practices Commission.

Rob Stutzman, the governor's communications director, said the uproar was "much ado about nothing" because the agreement between Mr. Schwarzenegger and the magazines' publisher had been revealed earlier. Only the compensation was new to the public, he said.

He said that it was legal for the governor to have outside income, as do many state legislators, and that the work for the magazine company takes up little time.

"The public appreciates that Arnold Schwarzenegger is linked to the world of bodybuilding and fitness, has been his whole life and will continue to be, and is proud of that association," Mr. Stutzman said. "And his opinions on dietary supplements have been well documented for decades."

Mr. Schwarzenegger entered the arrangement with the publisher of the magazines, American Media, in November 2003, a few weeks after being elected and two days before being sworn into office.

In March 2004, he and American Media announced that he had agreed to serve as the executive editor of Flex and of Muscle & Fitness. While there was some suggestion made that Mr. Schwarzenegger would be compensated, the emphasis was that American Media would contribute $250,000 a year to the Governor's Council on Physical Fitness and Sports, a nonprofit set up by Mr. Schwarzenegger to promote the health benefits of exercise.

But on Wednesday, in a filing to the Securities and Exchange Commission, American Media released the terms of the agreement. In the contract, Mr. Schwarzenegger, who is referred to as "Mr. S," is supposed to give advice on "overall editorial direction" and to help "in various ways to further the business objectives" of the fitness magazine division of American Media, called Weider Publications. The contract said the work would not be performed during normal business hours.

Under the five-year contract, Oak Productions, Mr. Schwarzenegger's company, is to receive 1 percent of the net print advertising revenues of Weider. But the payment must be at least $1 million a year.

Mr. Schwarzenegger has also been granted "phantom equity," a way of sharing in the growth of the value of the company. The equity could become worth 1 percent of the value of Weider, which was stated in the filing as $520 million.

In the governor's financial disclosure form for 2004, required of public officials, American Media is listed as a source of income but no amount is disclosed.

Disclosure of the deal also raised eyebrows in the publishing community. "It's a contract on steroids," said Chip Block, a longtime publishing industry consultant. "I have never heard of a magazine company paying this kind of money to a contributor, including a royalty on advertising."

Paul Wachter, financial adviser to the governor, said the money from the deal "is not something that is a significant amount of money in his world." He said Mr. Schwarzenegger did the deal because of a long relationship with the company's founder.

Weider Publications was started by Joe Weider, who brought Mr. Schwarzenegger to the United States from Austria as a young bodybuilder in 1968. Weider's magazines were acquired in January 2003, for $350 million by American Media, which also publishes tabloids such as The National Enquirer, Globe and Star.

Mr. Schwarzenegger writes columns for the two fitness magazines, and the magazines make much of their relationship with him and exult him regularly. The August issue of Muscle & Fitness contains an "exclusive" interview with Mr. Schwarzenegger, whom the magazine calls "the most famous person in the world."

Some of Mr. Schwarzenegger's value to the magazines appears to come from his stance that dietary supplements, apart from anabolic steroids, do not need to be regulated.

According to an article in the August issue of Muscle & Fitness, Mr. Schwarzenegger joined David Pecker, the chief executive of American Media, at a meeting in Columbus, Ohio, in March to organize a new lobbying group to preserve access to supplements.

But Mr. Schwarzenegger appears to have benefited more than financially by his relationship with American Media, according to Laurence Leamer, author of "Fantastic: The Life of Arnold Schwarzenegger," published last month.

A few years ago, according to the book, the National Enquirer was publishing articles about Mr. Schwarzenegger's alleged sexual affairs, hurting his political prospects. But in July 2003, when Mr. Schwarzenegger was contemplating running for governor, he met with Mr. Pecker.

Mr. Schwarzenegger told Mr. Leamer that an explicit deal to end the negative coverage was not discussed but that "it's common sense. Do you want to work with someone who you are attacking?"

In the election, Mr. Leamer wrote, the tabloids lauded Mr. Schwarzenegger with headlines like "A New American Patriot."

By Laurence Leamer, Laurence Leamer is the author of "Fantastic: The Life of Arnold Schwarzenegger."
LA Times, July 10, 2005

(snip)

By the time he entered the 2003 recall election, the movie star had the tabloid problem solved.

The National Enquirer, the Globe and the Star are all owned by one company, American Media, headed by David Pecker. In July 2003, as Schwarzenegger was contemplating entering the recall election, he ushered Pecker into his massive office in Santa Monica, both participants have told me. The parameters of this get-together had been set by bodybuilding impresario Joe Weider, Schwarzenegger's longtime mentor. American Media had just purchased Weider's bodybuilding magazine empire, and Weider said he saw manifold benefits to both parties if the tabloids would stop doing articles about Schwarzenegger's past sex life.

Schwarzenegger says no deal was made that day.

But an interview with the governor for my book, "Fantastic: The Life of Arnold Schwarzenegger," made it clear that no deal had to be made.

"There was no discussion about the National Enquirer," Schwarzenegger said. "I think it's common sense. Do you want to work with someone who you are attacking? You don't have to say anything. You don't have to be sleazy and make deals. It's human nature."

In August 2003, Schwarzenegger announced his candidacy on the "Tonight Show" — a brilliant, celebrity-age move. Shortly thereafter, Goyette, Schwarzenegger's alleged former lover, said that a National Enquirer editor told her that American Media wanted to sign her up to write a book. In return for $20,000, she signed a contract. Nothing more about Goyette has ever appeared in the tabloids, and Goyette says no one ever mentioned a book again. Pecker says he knows nothing of any agreement with Goyette.

During the campaign, the American Media tabloids celebrated the Schwarzenegger candidacy in article after article. The company published a special $4.95 magazine on Schwarzenegger — a 120-page valentine. Soon after his election, Schwarzenegger agreed to be the executive editor of two bodybuilding magazines in return for $250,000 a year paid to charity.

With the tabloids off his back, he had only the mainstream media to contend with, and again he used star tactics.

Heck, we might as well add the WaPo to the collection. I saw one article where Arnie's folks were saying that this saves the state money: since Weider pays him, the state doesn't have to. What's wrong with this picture? LOL.

Schwarzenegger A Top-Dollar Editor - Conflict-of-Interest Questions Cited
By Amy Argetsinger
Washington Post Staff Writer
Friday, July 15, 2005; Page A03
LOS ANGELES, July 14 -- When Gov. Arnold Schwarzenegger announced last year that he had signed a deal to serve as executive editor for two fitness magazines, he described the salary as "petty compared to the movies."
In fact, he was in line to receive at least $5 million over five years, according to records filed this week with the Securities and Exchange Commission. Although the amount may pale next to the reported $30 million he earned for his last film role, it prompted California legislators and government watchdogs to raise concerns Thursday about conflicts of interest and distractions from the governor's day job.
Much of the advertising revenue for the magazines, Muscle & Fitness and Flex, comes from makers of dietary supplements, a controversial industry. Last year, Schwarzenegger (R) vetoed a bill that would have discouraged high school athletes from taking performance-enhancing supplements, saying that most such products are safe.
(snip)
Schwarzenegger's dealings with American Media Inc., the Florida-based publisher of Muscle & Fitness and Flex, had earlier raised eyebrows. Most questions concerned whether his connections to the company -- which bought the magazines in early 2003 from Joe Weider, his longtime friend and mentor -- were the reason its celebrity- and scandal-oriented tabloids, such as the National Enquirer and the Star, steered clear of news reports about sexual harassment allegations concerning the then-movie star.
According to American Media's filings with the SEC, Schwarzenegger's Oak Productions firm was to receive 1 percent of annual advertising revenue, although no less than $1 million a year. The estimates included in the agreement say Schwarzenegger could receive as much as $8.15 million through 2009.

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