Stuart Karl; Made Fortune on Fonda Workout Tapes

Stuart Karl, a political fund-raiser and one-time music video Wunderkind who made a fortune 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 had battled skin cancer for two years. He had been hospitalized for a week, said 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 he went into the hospital, his father said.

Longtime business associate and friend Court Shannon said Karl had not long ago completed a new exercise video. “He was the most creative, innovative person that has been involved in home video,” said Shannon. “He created an industry that did not exist before. (His death) may signal the end of an era.”

The youthful Karl became a local symbol of the financially booming 1980s after he persuaded Jane Fonda to videotape her exercises to sell 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 political and financial successes eventually boomeranged on the Newport Beach entrepreneur. After establishing a partnership with Lorimar Telepictures, Karl was forced to resign in 1987 amid conflict-of-interest charges.

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

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

Despite such setbacks, Karl was optimistic. In a 1990 court appearance he testified that he strove to “look forward, not back.”

He was a community college dropout, but his lack of formal business training did not keep him from making money, first with a series of trade magazines promoting 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 Fonda into putting her exercise classes on tape. The company went from a one-man operation to more than 200 employees.

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 new created Karl-Lorimar subsidiary. But by 1987, he was forced to resign over the conflict of interest charge.

Karl is survived by his wife, Debra, and two sons, as well as his parents and two sisters.

Times staff writer Dana Parsons contributed to this story.