David Beckham's Company Sues F45 Training for $18.8 Million Over Breach of Contract

David Beckham's company, DB Ventures Limited, filed a lawsuit against F45 Training Holdings Inc. in October 2022, alleging breach of contract. The lawsuit claims that F45 failed to transfer 1 million freely tradeable shares to DB Ventures within six months of F45's IPO, as stipulated in their promotional agreement. This delay resulted in a significant decrease in the share value, causing damages exceeding $18.8 million.

According to the lawsuit, Beckham had agreed to be the global ambassador of F45, promoting the company to his millions of followers as part of the deal. However, F45's founders, Adam Gilchrist and Rob Deutsch, along with Beckham's former friend and neighbor, actor Mark Wahlberg, who has a stake in F45, have asked a judge to dismiss the lawsuit. They argue that the allegations of "fraudulent conduct" are baseless.

The legal battle has strained the long-standing friendship between Beckham and Wahlberg, who became friends after Beckham moved to Los Angeles in 2007. Wahlberg, who owns a 36% stake in F45 and serves as the company's chief brand officer, refuted the allegations and called for the lawsuit to be dismissed. He stated that Beckham's company is blaming everyone but not examining its own actions.

F45 Training Holdings has denied the allegations, arguing that they abided by the agreement to issue 1 percent of their outstanding shares to DB Ventures six months after their stock became publicly tradeable. The case is currently scheduled for trial in January 2025.

Why this matters: The lawsuit highlights the risks and complexities involved in celebrity endorsement deals and the potential consequences when such agreements are allegedly breached. The outcome of this high-profile case could set a precedent for similar disputes in the future and may impact the way companies structure their contracts with celebrity ambassadors.

In August 2023, F45 Training Holdings announced that it had delisted from the New York Stock Exchange after its share price fell by 75%. The legal battle between Beckham's firm and Wahlberg's F45 Training began in 2022 and was later joined by Australian golf entrepreneur Greg Norman, but the judge directed the two parties to present their cases separately. As the dispute continues, it remains to be seen how the court will rule on the allegations and the potential impact on the parties involved.

Key Takeaways

• Beckham's company sues F45 for breach of contract over delayed share transfer
• Lawsuit claims $18.8M in damages due to share value decrease
• F45 founders, Wahlberg seek dismissal, deny "fraudulent conduct" allegations
• Lawsuit strained Beckham-Wahlberg friendship, F45 delisted from NYSE in 2023
• Case could set precedent for celebrity endorsement deal disputes