Pro golfer Greg Norman and well-known soccer player David Beckham are suing a Mark Wahlberg-backed gym for more than $20 million, alleging withholding of sponsorship money.
Beckham and Norman claim in a complaint acquired by The Blast that they engaged into promotional contracts with F45 Training of Australia in order to expand the business.
The pro sportsmen would earn yearly salaries (amounting to $1.5 million for Beckham, while Norman’s annual remuneration is unknown), as well as a portion of the company’s equity, according to The Blast.
Their attorneys claim the business has “significantly benefited” from their agreement as a result of their appearances in many and holding different promotional events for the fitness brand’s entry into the United States.
According to the lawsuit, Beckham and Norman’s support for the fitness business “enhanced its public profile and credibility, and helped roll out new fitness offerings for F45,” and as a result of their work the business went public in 2021 with a valuation that was nearly three times higher than it had been two years earlier.
However, when F45 lost value on the stock market, the professional sportsmen contend in their complaint that F45 neglected to provide them “significant cash and equity compensation.”
The company’s stock price, which has fallen more than 76 percent over the last year, was barely $3.07.
Beckham joined the business at Mark Wahlberg’s urging. Wahlberg, an actor, bought a 36 percent share in the business in 2019, when it was estimated to be worth around $634 million.
The complaint claims that since then, he has offered marketing and promotional services, including public and private appearances, picture and video shoots, as well as promoting the business on his social media and in printed materials.
By 2021, F45 will have formally introduced Beckham as a worldwide partner, posting photos of him working out at one of the company’s facilities. Co-founder Adam Gilchrist is said to have called the relationship between the two parties a “monumental alliance.”
The firm celebrated the first anniversary of its listing on the New York Stock Exchange on July 14 of this year, at which point he was entitled $5 million, according to the Sydney Morning Herald.
F45 reportedly started withholding millions of dollars from him when the company’s share prices started to decline in 2022 as a result of what the lawsuit refers to as “fiscal mismanagement and macroeconomic constraints.”
The stock prices allegedly fell from around $11.33 million when Beckham vested on January 15, 2022 to just around $1.97 million by September 23, “a mere fraction of the value [Beckham’s company] would have received had F45 timely complied with its contractual obligations,” at the same time, and Beckham allegedly lost close to $10 million.
The Blast reports that the complaint also claims that the corporation allowed other investors, including “insiders and directors,” “preferential treatment” so they could earn more from their ownership.
It claims that at this time, the business provided “much more stock to different companies linked with Fortress Investment Group” and “had expedited the vesting of additional shares awarded to Wahlberg, another celebrity who is also a board member, director, and insider.”
Terrell Owens, a former NFL receiver, had brought a similar claim against the gym.
According to Bleacher Report, he said that F45 neglected to pay him more than $700,000 in outstanding wages in his 2017 complaint.
According to both parties, the $15,000 agreed upon by Owens to participate in the promotional film was paid when the lawsuit was filed.
However, according to Owens, the gym was also meant to pay him $25,000 for each of the first 25 gums that opened in the US, with an extra $5,000 for each subsequent opening.
At that time, the United States had at least 45 gyms.
According to Bleacher Report, Owens requested at least $725,000 in damages, but the CEO has refuted the claims, claiming that “everything that’s been brought is a blatant fiction of the facts.”
‘We’re not a corporation that doesn’t pay our bills,’ he said, adding that the business intended to countersue Owens over the allegations.
But finally, a court decided in Owens’ favor.
On July 15, 2021, the business went public. On that particular day, the New York Stock Exchange bell was rung by Adam Gilchrist, the founder and CEO of F45, as well as Darren Richman, Greg Norman, Michael Raymond, Chris Payne, Mark Wahlberg, and others.
But after offering a number of celebrities substantial sums of money in exchange for their endorsements, the corporation previously disclosed its intention to reduce personnel and decrease its profitability and sales projections for this year.
According to the Sydney Morning Herald, former NBA player Magic Johnson got a $4 million cash bonus together with $5 million in stock, while American model Cyndi Crawford also earned $5 million in stock.
According to the Herald, the firm recorded $4.5 million in stock-based charges related to its agreements with celebrities during the summer, as well as $4.5 million in future stock-based expense obligations.
And by the end of June, the business had just $8.5 million in cash and $60.6 million in debt.
The firm therefore stopped aiming to grow, according to CEO Ben Coates, who said this in July as the company shifted its emphasis to protecting its cash and earnings.