July 15, 2005

Schwarzenegger ends criticized fitness deal

By Adam Tanner

SAN FRANCISCO (Reuters) - California Gov. Arnold
Schwarzenegger, facing criticism for receiving millions of
dollars for his links to two fitness magazines, said on Friday
that he is ending his ties to the publishing group.

Schwarzenegger was to receive at least $13 million over
five years for serving as executive editor of Muscle & Fitness
and Flex magazines, Reuters reported on Wednesday.

The information in a Security and Exchange Commission
filing by publisher American Media Operations prompted wide
media attention and criticism about a perceived conflict of

"When I became governor I pledged to put the people of
California front and center," he said in a statement. "I don't
want there to be any question or doubt that the people have my
full devotion."

"Therefore, effective today I will relinquish my title as
executive editor and forego any compensation from the

The statement marks an abrupt reversal for Schwarzenegger,
whose spokesman strongly defended the magazine deal on
Wednesday saying: "My reply is so what, what's the harm?"

The American Media deal had the former Mr. Olympia
receiving $8.15 million over five years for serving as
executive editor of the two magazines. In addition, his firm,
Oak Productions, was to receive 1 percent of its net print
advertising revenues, with a minimum payment of $1 million a

Critics pointed to Schwarzenegger's veto of a nutritional
supplements bill last year as an area where the arrangement
constituted a conflict of interest. Fitness magazines draw much
of their advertising revenues from such supplements.

The author of the bill, state Sen. Jackie Speier, welcomed
Schwarzenegger's move.

"Yesterday I asked the governor to make the right decision
about his financial contract with American Media. Regardless of
the legality of the contract, it was time for him to be a
leader and to sever the contract. I am pleased that he has
acted appropriately," Speier said in a statement.

In his statement, Schwarzenegger cited his long links to
the magazines, which played a key role in transforming a little
known Austrian into one of the world's best-known people.

"For more than 35 years I have had an extraordinarily close
personal and business relationship with Weider Publications,"
he said. "Given that bodybuilding and fitness have been central
to my life, I saw no reason to discontinue that relationship
when the franchise was sold in 2003."

Schwarzenegger become governor that year as well.

American Media bought Weider Publications, which had been
owned by Schwarzenegger's mentor Joe Weider, for $357 million.
A company spokesman did not return calls for comment.

Analysts said Schwarzenegger wisely backed away from the
magazine contract because they gave an opening to opponents
ahead of a special November election he called in a bid to
reshape California's government with ballot measures.

"It's just the sort of thing that takes you down two points
in the polls, which he can ill afford," union lobbyist Barry
Broad said.

The Field Poll last month reported his approval rating
among registered voters stood at 37 percent, which analysts
said casts doubt over whether he can win in November.

(Additional reporting by Jim Christie)