Stuart Karl, Video Boy Wonder Hit by Scandal, Dies at 38

Stuart Karl, the one-time boy wonder of the video industry who became a millionaire selling Jane Fonda workout tapes but saw his business empire dissolve in bankruptcy and political scandal, died Friday at Hoag Memorial Hospital. He was 38.

Karl succumbed after a two-year battle with skin cancer. He had been in and out of the hospital for the past six months and had been hospitalized for the past week, according to his father, George Karl.

Despite the illness, Karl had recently embarked on a new business venture, establishing a Newport Beach-based video company called Steel Wings and had worked until just recently, his father said.

Longtime business associate and friend Court Shannon said Karl had recently completed a new video called the “Club Med Workout” and that Karl was excited about its prospects for success.

“He was the most creative, innovative person that has been involved in home video,” Shannon said. “He created an industry that did not exist before. (His passing) may signal the end of an era.”

The youthful, blond-haired Karl became a local symbol of the financially booming ‘80s after he persuaded Jane Fonda to videotape exercises for sale to the public.

During the early 1980s, he began earning a reputation as a major Democratic Party activist and fund-raiser, especially on behalf of presidential hopeful Sen. Gary Hart (D-Colo.)

But the political and financial successes eventually boomeranged on the Newport Beach entrepreneur, who played in a rock band as a youth and reportedly dreamed of one day making a movie.

After establishing a business partnership with Lorimar Telepictures, Karl was forced to resign in 1987 amid conflict-of-interest charges that he and two associates had a financial interest in a company doing business with Lorimar.

His political career took a tumble a year later. In December, 1988, he was fined $60,000 and sentenced to three years’ probation after admitting to funneling $185,000 in illegal campaign contributions to Hart and other political candidates.

In July, 1989, Karl filed for Chapter 11 bankruptcy protection just as the Internal Revenue Service was preparing to auction his 15,000-square-foot Newport Beach home for non-payment of $717,701 in federal taxes.

Despite such setbacks, Karl reportedly maintained good spirits and was optimistic about his future. He rarely granted interviews in recent years, but in a 1990 court appearance, he testified that he strived to “look forward, not back.”

He also admitted in the Superior Court hearing in Fullerton to holding himself responsible for some of his legal troubles, specifically in his dealings with Lorimar.

“I made the mistake. I didn’t listen to . . . advice,” he testified.

If his business judgments were not always sound, there was almost unanimous agreement among associates and friends that Karl was wholly likeable. Friends portrayed him as a good-natured, unpretentious man devoted to his two young sons.

“He didn’t want to have a big company. . . . He wanted to be able to have time to spend with his children and family,” Shannon said. “He was energetic with an energy that was catching for others around him. The people who worked for him assimilated his passion.”

But his actual talents provoked debate. For some, Karl was a visionary who early on realized the potential of the budding home video market. To others, he was a flash in the pan who squandered his big break.

Born in Pasadena, Karl lived in La Canada and then moved with his family to Corona del Mar in 1968. He graduated from high school there but dropped out of Chapman College in Orange.

His lack of formal business training apparently did not hinder his knack for making money, first with a series of trade magazines that promoted water beds, saunas and spas.

By the early 1980s, Karl had created his own video company, Karl Home Video. The big break came when he talked movie actress, activist and then-budding health guru Fonda into putting her exercise classes on tape. The company went from a one-man operation to one employing more than 200.

The Fonda tapes were considered an innovation and remain the best-selling, non-music video tapes ever made.

The Lorimar entertainment firm bought Karl Home Video in 1984 and Karl was put in charge of the newly created Karl-Lorimar subsidiary. But by 1987, he was forced to resign over the conflict-of-interest charge.

It was apparently the combination of politics and Kennedyesque charm that attracted Karl to the Hart campaigns.

He was eventually accused of concealing illegal campaign contributions made through people who were later reimbursed and dealing out corporate contributions disguised as personal contributions in six states during 1984 and 1988.

Karl’s defenders portrayed him as simply naive and too generous.

“He always wanted to make people happy,” Shannon said. “He genuinely believed that if you worked hard enough and did all the things you were capable of, that anything was possible.

Karl is survived by his wife, Deborah; two sons, Cooper, 8, and Hamilton, 6; his father, George; and mother, Barbara Karl; and two sisters, Lynn McMahan of La Canada-Flintridge and Kristina DeLorme of Huntington Beach.

A rosary will be held from 6 to 8 p.m. Monday at Pacific View Mortuary in Newport Beach.

Funeral services are scheduled for 10 a.m. Tuesday at Our Lady Queen of Angels Church in Corona del Mar.

Times staff writer Dana Parsons contributed to this story.