The governor’s climb to fame was closely connected to the supplement industry and its magazines.
Before the movies and before the politics, there was Joe Weider and the muscle magazines.
Now, in great part through Weider and the magazines, there is the $2.1 billion sports nutrition supplements industry.
Together, the magazines and the supplements that finance them with their advertising dollars are at the heart of the $5 million controversy that engulfed Gov. Arnold Schwarzenegger last week.
On Friday, the governor gave up his title of executive editor of the Weider magazines and the annual $1 million minimum the five-year deal guaranteed him.
But the history remains, and with it, questions about Schwarzenegger’s arrangement that led to conflict-of-interest allegations – while the governor struggled to stay true to the industry fundamentally responsible for his fame and fortune.
Paul Wachter, the governor’s longtime personal business adviser, said Schwarzenegger’s consulting services agreement with American Media Inc. – which purchased the Weider publications in January 2003 – was only about the company keeping a priceless brand in-house.
“If you were running Baseball magazine and could get Babe Ruth on your masthead saying, ‘I like this magazine,’ you would pay a lot of money and you wouldn’t need anything else from him,” Wachter said. “This had absolutely nothing to do with him being governor and everything to do with him being Babe Ruth.”
As for AMI, its benefit under the arrangement was pretty much off the charts.
“They got a Hollywood personality, a political personality, a guy who meets and greets presidents and international heads of state,” said Tom Hollihan, associate dean of the University of Southern California‘s Annenberg School for Communication. “Anywhere he goes, he draws a crowd of reporters around him. From the magazine’s perspective, it’s the equivalent of an endorsement.”
The deal represented another chapter in Schwarzenegger’s 37-year, hand-in-glove relationship with Weider, the bodybuilding impresario who brought the Austrian native to California in 1968 to launch a career that evolved from muscleman competition to the movies to politics.
“He agreed to provide an apartment, a car, and to pay me a weekly salary in exchange for my information (on bodybuilding techniques) and being able to use photographs of me in his magazine,” Schwarzenegger says in his 1977 autobiography, “Arnold: The Education of a Bodybuilder.”
Weider could not be reached for comment. But his publicist, Charlotte Parker, described the magazine magnate, now in his early 80s, as “a mentor and father figure to Mr. Schwarzenegger.”
Wachter described Schwarzenegger’s relationship with Weider over the decades as “mutually beneficial,” with each promoting the interests of the other.
Over the years, the two danced around the idea of putting together a formal business arrangement, but their personal relationship always kept it from happening, according to Wachter.
“It would be like trying to make a deal with your father,” Wachter said. “There was too much history. They couldn’t really look each other in the eye to make a real deal.”
Then Weider sold to AMI in 2003 for $357 million, and AMI and its chairman and chief executive officer, David Pecker, approached the Schwarzenegger camp, according to Wachter.
“I would guess there was some concern on their part” about losing the Schwarzenegger connection with the Weider magazines, Wachter said.
To keep the superstar in the fold, the publishing company, which also owns the National Enquirer, entered into a nonbinding memorandum of understanding with Schwarzenegger on Nov. 15, 2003 – two days before he took office as governor.
The consulting services agreement in which AMI named Schwarzenegger executive editor of Weider’s Muscle & Fitness and Flex magazines was consummated in January 2004 and made public two months later. It wasn’t filed with the U.S. Securities and Exchange Commission until last week.
Under the deal, Schwarzenegger is to be paid a minimum of $1 million a year for five years or 1 percent of advertising revenue from the two fitness journals and six other American Media magazines, whichever is higher.
USC‘s Hollihan said Schwarzenegger’s continuing presence allowed AMI to “further the mission of the magazine,” and just as importantly, to act as a magnet for “advertiser products.”
As far as Muscle & Fitness and Flex go, those would be the sports supplements.
Although the Weider magazine group includes Men’s Fitness, Shape, Natural Health, Fit Pregnancy and Muscle & Fitness Hers, the advertising base of the Schwarzenegger-edited publications, Muscle & Fitness and Flex, is almost totally driven by supplements.
An admitted steroids user from years gone by who has since repudiated the practice, Schwarzenegger has remained a champion of supplements that he contends are overwhelmingly beneficial.
In the 1999 edition of “The New Encylopedia of Modern Bodybuilding,” which Schwarzenegger co-wrote, he says he “came to rely on supplements more and more as I became more experienced at bodybuilding.”
Supplements, however, are not without their detractors.
“The problem with the supplement class,” said William O. Roberts, associate professor in the University of Minnesota Department of Family Medicine and an expert on sports medicine, “is that it is unregulated (by the Food and Drug Administration), which makes it so that if you and I got together and had enough money to make some pills, we could sell them as a supplement, with no purity or quality control and no real data that it works.”
“What we’re stuck with,” Roberts added, “is an unregulated industry that turns out a lot of stuff. Some of it is ethically made and has a good manufacturing process and is reasonably safe. Other products are just kind of thrown together.”
Although there is little or no controversy concerning supplements such as vitamins, minerals and protein powders, the same can’t be said for weight-loss products containing the supplement ephedra that has since been banned by the FDA.
Meanwhile, the leading substance being marketed as an ephedra substitute, synephrine, has been targeted for prohibition among high school athletes by state Sen. Jackie Speier and has been listed as “likely hazardous” by Consumer Reports magazine. Some synephrine products advertise extensively in Muscle & Fitness and Flex.
According to Nutrition Business Journal, the sports supplement industry generates $2.1 billion in annual sales, and it was Schwarzenegger’s job with magazines that profit from supplement ads that led his critics to suggest he had a conflict of interest.
“By working for the magazines, Arnold is working for the magazines’ paymasters,” Foundation for Taxpayer & Consumer Rights Executive Director Doug Heller said last week, before the governor relinquished his title.
Schwarzenegger’s financial adviser said there was nothing inappropriate about the arrangement.
“Half the (advertising) money that comes through has nothing to do with supplements,” Wachter said, noting that Schwarzenegger’s compensation with AMI also was based on the revenues from the nonbodybuilding magazines.
Moreover, Wachter said, Schwarzenegger never knew the terms of the deal included the advertising income component, “because I did the deal” for him and never told the governor about it.
Hollihan said Schwarzenegger’s decision to give up the executive editor’s position “shows wise judgment, not to let it stir and fester.”
But plenty of damage may already have been done to the Republican governor’s political image, if not to his bodybuilding business appeal, says Hollihan.
People will continue to question the governor’s judgment, for him to have been so involved,” Hollihan said.
The Bee’s Andy Furillo can be reached at (916) 321-1141 or [email protected]