Hart Denies Knowing of ’84 Financial Improprieties : Sweet Life Soured for Video Whiz

Things have always moved pretty fast for Stuart Karl, Orange County’s boy wonder of the video business, and the limelight is nothing new for him.

Said one former employee and admirer, interviewed before the Miami Herald reported Wednesday that Karl may have been involved in improper campaign contributions on behalf of presidential candidate Gary Hart: “Stuart loves that publicity.”

During the late 1970s and early 1980s, he got a lot of it--mostly focusing on his image as the whiz kid with surfer-boy looks.

Karl made great copy.

While his peers were still in college, he was publishing trade magazines--first for water beds and later for spas and saunas and the burgeoning video industry.

Fonda Tape Made Fortune

Still later, while competitors in the home video industry of the late ‘70s and early ‘80s were looking for alternatives to studio movies, Karl’s firm, Karl Home Video, struck it rich by persuading Jane Fonda to demonstrate her passion for fitness in a videocassette.

When Fonda’s first workout tape sold a million copies, Karl, not yet 30, became known as a man who had started a revolution of sorts by proving that people would pay for alternative home video programming. Karl’s reward: In 1984, Lorimar-Telepictures bought out his company but left him in charge of a new subsidiary, Karl-Lorimar Home Video.

Karl’s approach, associates said, was to go, go, go.

But by March of last year, Lorimar believed Karl had gone too far. Pretty soon, he was gone.

Karl, now 34, and two associates resigned from Karl-Lorimar Home Video after Lorimar-Telepictures said Karl’s company bought products from another company in which Karl and the two associates reportedly had an interest. That alleged conflict of interest, involving an amount estimated between $500,000 and $600,000, represented a “breach of our code of ethics,” Lorimar officials said at the time.

Then, last November, Lorimar sued Karl, alleging that he had violated the terms of an agreement made with the company at the time of his resignation.

Karl could not be reached for comment Wednesday.

While the sweet world of Stuart Karl appears to have turned sour overnight, the charismatic, enthusiastic 1971 graduate of Corona del Mar High School has always had his share of detractors.

Those who like Karl describe him as a visionary with guts--a boyish gambler who sees openings and possibilities before others do and isn’t afraid to act. But to others, Karl is like the guy who hits the lottery, without any bedrock of real talent, and who rankles people after his success.

“It was the old story,” said a former competitor, “of seeming too big for his britches.”

Resentment toward Karl, or his company, had run so high that one competitor “broke out the champagne” when Karl’s demise at Lorimar made headlines.

“There was a lot of rejoicing in the industry when the things that came to light came to light,” said a former home video executive who insisted on anonymity. “He had a lot of power in the home video industry, and he was resented, especially for the people he had surrounding him who tended to be . . . well, let’s say they saw themselves as a rather exclusive group.”

Another source familiar with the home video industry said: “The rap on Karl-Lorimar was that their eyes were bigger than their stomachs, and they made too many ambitious deals that they couldn’t possibly devote the appropriate amount of attention to. . . . Karl’s a victim of a problem that a lot of people in the entertainment business share: because he had early success in the business, he thinks he’s a genius.”

But Karl’s supporters describe a man who has succeeded because of his belief in the work ethic and his knack for beating others to the punch--and one who leaves business meetings early to spend time with his family.

Stan Chambers, now the publisher of Home Spas and Pools magazine, worked with Karl in the late ‘70s. “He had a lot of foresight into forming markets. That was his skill,” Chambers said. “A lot of the stuff I’m doing now, I learned from Stuart.”

Chambers especially remembers when Karl was trying to carve a niche for a trade magazine out of the then-new water bed business. “There was this incredible dichotomy between Stuart and the water bed guys (dealers). He had a hard time getting some of them to wear shoes to the trade shows. They were basically out-of-the-’60s hippie guys who started out liking water beds.”

Grif Amies, who lived next door to Karl as a teen-ager and later worked for him, said, “Of all the people I’ve known, he’s the most creative and forward-thinking person, as far as knowing what the next trend is going to be.”

Amies said it wasn’t unusual for Karl to be at work by 5 or 5:30 a.m. at Karl-Lorimar. “He was continually busy. It was kind of his baby.”

When the Lorimar problems resulted in Karl’s resignation, Amies said, it took “a little bit out of him. But he’s gotten to spend more time with his wife and kids, which is important to him.”

The Miami Herald’s disclosures have come at a time when Karl was hoping to reverse the negative publicity. Last week, Karl, cheerful and enthusiastic, gave his first interview since his Lorimar problems surfaced 10 months ago. Although he said he was granting the interview reluctantly, he seemed eager to discuss the formation of Karl-Irvine Films, a company he is starting with James Irvine, fourth-generation scion of the pioneering Irvine family.

In that interview, which preceded the Herald’s published disclosures by several days, Karl said, “I’m very much hoping we can concentrate on the business and not the past. It comes off so hypish. I’m just trying to focus now on making a living, keeping my family happy and having a nice comfortable life with my wife and boys.”

‘I’m Not a Horn Blower’

Karl said that even during the wave of good publicity years ago, he was uncomfortable in the spotlight. For that reason, he said, he almost decided against granting an interview.

“People say, ‘Oh, there’s another Stuart Karl story. Oh, what’s he doing now? Blowing his own horn.’ I’m not a horn blower. I never have been as much as it was interpreted. We were doing publicity to sell a product and to build a business.”

Asked whether his problems with Lorimar would hamper efforts to get his new film company started, Karl shrugged. He said he was taking a “no comment” stance on the Lorimar situation but added: “I think I can contribute to the entertainment of this country by making some quality films.”

He and Irvine have modest goals, he said. They hope to make films mostly in the $3-million to $5-million category and in various genres, including children’s films. “I’d love to make a Chipmunks movie,” Karl said.

Karl and Irvine are hoping to get two projects “off the ground” this year, including “Jack,” a feature film on societal changes of the last 25 years in which John F. Kennedy returns to modern-day America.

As usual, Karl had some ideas about how to make the film venture fly.

“I think we’ve found an approach to making films that isn’t addressed on a regular basis,” he said. “Marketing-driven programming is an interest of mine. I think there’s going to be one campaign for films, from the day it hits the theaters to the day it’s rented, where traditionally, there have been two campaigns--for the theatrical release and then another one for the home rental release.”

The previews that moviegoers see in the theaters might also mention the future home video availability, he said. Karl is convinced that such pre-rental advertising won’t cut into box office sales. “Nobody’s interviewing Michael Douglas on ‘Fatal Attraction’ now,” Karl says. “Why not? Keep the heat on.”

He wasn’t concerned, he said, about the perils of show business. “This is the most comfortable venture I’ve ever been in,” he said. “When I was in the water bed business, nobody knew what water beds were, and they said I was crazy. When I was in the spa business, everybody said hot tubs were a fad. When I was in the videocassette business, way back when, doing alternative programming, everybody said the only thing people want is movies. . . . This is the first time in my life I’m going into something where I don’t have to defend the product I’m making.”

He’s also hoping that even low-budget films can attract the big-name stars that can make the difference between profit and loss. “The advantage we’ll have in making small, quality films is that there may be people who may do it for reasons other than economic. For example, Fonda didn’t do the workout tapes to make money. It was her life. It wasn’t solely motivated by ‘here’s the deal and I’m going to make some money.’ She did it because she had a tremendous desire to communicate her feelings about being healthy.

“So if you take a film that touches on Kennedy, or a children’s story that’s true to a star’s heart, you can attract a person without (paying them) $3 million.”

Talking about his new company, Karl said, “I’m just very comfortable doing what I’m doing now. I’m as motivated as I’ve ever been, as happy as I’ve ever been. I’m pleased because I’m back where I’m probably more comfortable--the smaller environment.”

But Karl hasn’t shed the old whiz-kid mentality. “I have an attitude about business,” he said. “I don’t see if things go. When I go into them, they go. You have to have that attitude. You can’t say, ‘I hope it goes.’ This (venture) will happen. You have to get up in the morning with that attitude.”