The very magazines that built the legend of Arnold Schwarzenegger now have the California governor facing conflict-of-interest accusations.
It emerged last week that the Governator, who last year vetoed legislation designed to discourage high-school students from using nutritional supplements, will get about $8 million over five years from American Media, whose fitness magazines in turn feed off advertising from supplement marketers. Mr. Schwarzenegger is receiving the millions for doing some light consulting at two American Media titles where he holds the title of executive editor, Flex and Muscle & Fitness.
That has prompted critics and rivals to cry foul.
"I'm not certain whether it's a legal conflict of interest, but it's certainly a perceived one," said Art Torres, chairman, California Democratic Party.
The news also highlighted Mr. Schwarzenegger's decades-long relationship with Joe Weider, the godfather of the supplement business and the founder of Weider Publications.
Mr. Weider, a lifelong apostle for fitness and purveyor of fitness products, brought Mr. Schwarzenegger to the U.S. from Austria in 1968 when the future movie star was just a promising young bodybuilder. Dozens of times, Mr. Weider added to Mr. Schwarzenegger's fame by featuring him on the covers of Flex and Muscle & Fitness (which Mr. Weider created).
Those magazines, which American Media bought two years ago in a $350 million deal for all of Weider Publications, rely largely on advertising from nutritional-supplement companies-just like the one Mr. Weider founded.
STACKED
Muscle & Fitness, for one, collected ad revenue of $62.8 million last year, of which $27.9 million came from ads for supplements like Cellmass, ProSource Provadex and Myoplex Deluxe, according to TNS Media Intelligence. In 2004, Weider Nutrition was the sixth-largest nutritional-supplement advertiser in Muscle & Fitness, Shape, Fit Pregnancy and Men's Fitness, the four Weider Publishing titles tracked by TNS Media Intelligence. It spent a total of $1.47 million.
Flex is even more stacked with supplement ads, but TNS does not track it. An Ad Age analysis suggested about 5% of its ad pages come from Weider.
The supplement market has boomed in recent years. Its marketers spent nearly $250 million to advertise in major media last year, $140 million of it in magazines, TNS reported.
And although titles from Good Housekeeping to Rolling Stone reaped their shares of the business, Muscle & Fitness led by a long shot, absorbing almost three times as much revenue as the No. 2 beneficiary, Weider sibling Men's Fitness.
The contract drew attention both because it directly links Mr. Schwarzenegger's compensation to the magazines' ad revenue and because of his veto of supplement legislation last year. In the five-year contract, Weider Publications agreed to pay Mr. Schwarzenegger's company, Oak Productions, $1 million a year or 1% of Weider Publications' annual net ad revenue, whichever is greater. The details were reported last week in The Los Angeles Times and The Sacramento Bee.
Under the deal, Oak agreed to provide consulting services. Mr. Schwarzenegger was named editor of Flex and Muscle & Fitness last March.
The compensation provision puts Mr. Schwarzenegger in the top echelons of editors' pay. Janice Min signed a contract last week to continue as editor in chief at Wenner Media's Us Weekly at a reported salary of $1.2 million a year.
But the governor's value to the magazines clearly derives less from his editorial contributions than from his fame and political power.
The contract, dated Jan. 1, 2004, grew out of a memorandum of understanding reached on Nov. 15, 2003, two days before Mr. Schwarzenegger took office. California does not bar its governors from holding other jobs.
Mr. Schwarzenegger's office did not return a call seeking comment.
