1-2 punch for publisher (American Media, Ahnold, & Gigi)

[struggle4progress]

1-2 punch for publisher
By David Carr
The New York Times
MONDAY, AUGUST 15, 2005

NEW YORK <snip>

First came the report that <American Media> had paid off a woman who had a relationship with Arnold Schwarzenegger before he became governor of California. Then it reported a sharp decline in operating profit.

The woman, Gigi Goyette, an actress and long-running character in reports about Schwarzenegger, was quoted on Friday by The Los Angeles Times as saying that she had been paid $20,000 in 2003 to sign a confidentiality agreement with American Media, which had published articles saying she had a relationship with Schwarzenegger. At the time, she said, she assumed that the company was seeking exclusivity for her story about her relationship with the governor, but no such articles appeared. <snip>

In November 2003, just before he was sworn in as governor, American Media agreed to pay Schwarzenegger a minimum of $5 million and as much as $10 million in exchange for his services as an executive editor of two magazines, Flex, and Muscle and Fitness. Both magazines rely heavily on ads for nutritional supplements, which have come under increased regulatory scrutiny.

"The whole deal is sleazy," said Lawrence Leamer, author of "Fantastic," a biography of Schwarzenegger, a well-known bodybuilder and actor before he entered politics, that detailed his relationship with American Media. "I find it troubling that they cut a deal with a celebrity, including making payoffs to women he knew, and no one bats an eye." <snip>

http://www.iht.com/articles/2005/08/14/business/ammedia.php