Michael 'Mike D' Diamond made the revelation in a New York courtroom last week (ends30May14) as he testified in the band's ongoing copyright infringement case against the bosses of Monster Beverage Corp, who stand accused of using five of the hip-hop icons' tracks in a promotional video without their permission.
The promo was posted online days after the 2012 death of founding Beastie Boys star Adam 'MCA' Yauch, who had made it clear in his will that he didn't want his likeness or art used in any advertisements following his passing.
During his testimony at Manhattan Federal Court, the rapper used the Schwarzenegger film offer to demonstrate how picky the group is when it comes to allowing its work to be used for promotional purposes, admitting movie chiefs had offered the stars "a lot of money" to use the 1994 hit on the soundtrack.
He explained, "We felt it was too much of an endorsement, and we weren't fans of Mr. Schwarzenegger's recent... work."
The movie Sabotage bombed at the U.S. box office upon its release in March (14), grossing just $5.3 million (£3.31 million) in its opening weekend, making it the worst debut for a Schwarzenegger film in over 30 years.