July 13, 2005

Schwarzenegger making millions as muscle mag editor

By Adam Tanner

SAN FRANCISCO (Reuters) - Arnold Schwarzenegger may be
forgoing a state salary as California governor but he is still
pulling in millions of dollars a year as an editor of two
bodybuilding magazines.

American Media Operations, which publishes "Muscle &
Fitness" and "Flex" magazines, said on Wednesday it was paying
the former Mr. Olympia $8.15 million over five years to serve
as executive editor of those magazines.

Schwarzenegger announced his role with the magazine last
year but declined to detail payments. American Media disclosed
their "consulting agreement" with the governor in Security and
Exchange Commission filings.

"Having Arnold as executive editor of both magazines has
enormous value and brings credibility to the publications,"
said American Media spokesman Stuart Zakim.

The firm, which bought Weider Publications formerly owned
by Schwarzenegger's mentor Joe Weider in 2003, may be happy
about the arrangement, but some analysts say earning millions
on the side while serving as governor is troubling.

"I would say that if someone is getting $8.1 million from
the fitness industry, even if it is a magazine, it potentially
creates a conflict of interest," said Bruce Cain, a professor
of political science at the University of California, Berkeley.
"If it is not in violation of California law, it certainly
violates the spirit of our conflict of interest laws."

Schwarzenegger's office confirmed that $8.1 million figure,
but said it did not constitute a conflict of interest. "My
reply is so what, what's the harm?" communications director Rob
Stutzman said in an interview.

"We've been clear ever since he's become governor that he
still would have outside income," he said. "He reports that
income under state law in a form filed on an annual basis."

A spokesman for California's political watchdog, the Fair
Political Practices Commission, said income such as in the
American Media deal was legal provided it was disclosed.

In the SEC filing, American Media said it would pay
Schwarzenegger's firm Oak Productions one percent of its net
print advertising revenues, with a minimum payment of $1
million a year. This is in addition to the $8.15 million over
five years. Zakim, a senior vice president, said American Media
is also contributing $250,000 a year over five years to the
Governor's Council on Physical Fitness.

An American Media filing on Wednesday said Schwarzenegger
was helping "the overall editorial direction of the specific
Weider magazines and otherwise helping in various ways to
further the business objectives of the Weider business."

The filing added: "For the avoidance of doubt, Mr. S shall
not provide any consulting services to Weider pursuant to this
agreement during normal business hours on business days." The
"M. S" reference, the filing said, referred to Schwarzenegger.

Weider's magazines helped transform Schwarzenegger from an
obscure Austrian into the world's best-known bodybuilder, and
he has appeared on their covers dozens of times.

American Media also publishes tabloids such as the National