David Beckham sues Mark Wahlberg over F45 investment loss
Former football star David Beckham is taking legal action against Hollywood actor Mark Wahlberg over a failed celebrity endorsement deal with the troubled F45 fitness franchise which allegedly cost him $US10 million.
Beckham’s action relates to Wahlberg having been instrumental in signing him to a deal in 2020 which led to Beckham becoming one of F45’s celebrity ambassadors before its public float on the New York Stock Exchange the following year.
After becoming a global brand ambassador for F45, Beckham stated “I’ve been a fan of the F45 franchise and training model since being introduced by my friend Mark Wahlberg.”
The pair, who reportedly were once neighbours and friends when Beckham played in Los Angeles are now on opposite sides of a US District Court legal battle over shares in the company that Beckham was promised.
As reported by News Ltd, Wahlberg was a significant investor in F45 at the time of Beckham’s agreement and a director of the fitness group.
Beckham’s firm DB Ventures Ltd (DVBL) alleges he lost more than $US10 million when F45 stocks he was promised were withheld until after the company’s share price plummeted from its IPO price of $US16 to below $US3 in 2022 - one year after the float.
His lawyers claim this delay cost him millions in potential profit.
F45 struck multimillion-dollar endorsement deals with other celebrities such as basketballer Magic Johnson, Australian golfer Greg Norman and supermodel Cindy Crawford. They were deemed crucial to the fitness group getting its name familiar with US gym enthusiasts.
In its financial statements last year when Beckham and Norman first took legal action against the group, F45 advised “the company disputes these claims and intends to vigorously defend itself.”
The most lucrative celebrity endorsement deal belonged to Wahlberg. He received 2.74 million share rights, which vested with the IPO at a valuation of just under $US44 million, and sold more than $US10 million worth of stock in the year following the float.
Wahlberg was also part of a group that invested $US100 million in F45 back in 2019. Wahlberg and his business partners sold $US25 million worth of shares at $US16 each ahead of F45’s NYSE public debut, but also offloaded 3.2 million shares to Australian fund manager L1 Capital in 2020.
F45’s share price was struggling within months of its public debut and was barely above the $US10 mark by the year’s end.
What followed in 2022 proved to be disastrous for investors as F45 was forced to slash its earnings guidance in July and make workers redundant as the debt it was relying on to fuel franchisee expansion dried up. Shares dropped to a low of $US1.35 just a year after its stock market debut.
The company was ejected from the New York Stock Exchange last year, its stock last changing hands for just US15¢. Financial accounts released in October last year reported that it made a loss of more than $US370 million over the previous two financial years. The company has not given any financial updates since that time.
Beckham’s DVBL is seeking damages directly from Wahlberg’s investment group - which owns his stake in F45 - as well as F45’s Australian founders, Adam Gilchrist and Rob Deutsch.
According to documents seen by UK newspaper The Sun Wahlberg and his co-defendants claim the allegations of “fraudulent conduct” are baseless and have asked for the lawsuit to be dismissed.
F45 failed to have the lawsuit dismissed in September last year.
Beckham is not the only party pursuing legal action against F45, its founders and Wahlberg. F45 investors have launched a class action against the company as well as current and former board members including Wahlberg and Gilchrist. Pledge Capital is the lead plaintiff and US law firm Labaton Sucharow is its legal representative.
The investors allege misleading statements were made by the group ahead of its public float in July 2021 (which valued the business at more than US$1.5 billion). F45 denies this.
Images: David Beckham (top) and Mark Wahlberg and F45's then Chief Executive Adam Gilchrist on the New York Stock Exchange floor in July 2021 (below).
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