David Beckham and Greg Norman are suing a gym for more than $20 million after it allegedly withheld payments for their sponsorship.
In a lawsuit obtained by The Blast, Beckham and Norman state that they entered into endorsement deals with Australia-based F45 Training to help the brand grow.
As part of the deal, the pro athletes would receive annual payments — totaling $1.5 million for Beckham, while Norman’s annual compensation remains unclear — as well as a percentage of the company’s stock.
Since then, they have appeared in a number of advertisements and held various promotional events for the fitness company’s expansion into the United States, with athletes’ attorneys saying the company has “benefited significantly” from their arrangement.
The lawsuit alleges that by promoting the fitness company, Beckham and Norman “raised its public profile and credibility and helped launch new fitness offerings for F45,” and as a result of their efforts, the company went public in 2021 and went public nearly three times highly rated as previously been two years ago.
But, the pro athletes allege in the lawsuit, F45 failed to pay them “significant cash and stock compensation” because it fell in value in the stock market.
Shares of the fitness giant traded at just $3.07, down more than 76 percent over the year.
Soccer star David Beckham and golf pro Greg Norman are suing F45 Training for more than $20 million, claiming it withheld payments for their sponsorship
Mark Wahlberg acquired a 36 percent stake in the company in 2019 when it was valued at approximately $634 million.
Shares of the fitness company traded as low as $3.07 on Wednesday
Beckham joined the company at the behest of his friend, actor Mark Wahlberg, who acquired a 36 percent stake in the company in 2019 when it was valued at approximately $634 million.
Since then, he has provided marketing and advertising services such as public and private appearances, photo and video shoots, and promoted the company on its social media and in printed materials, according to the lawsuit.
Until 2021. F45 officially announced that Beckham is a global partner and posted pictures of him training at one of its facilities, with co-founder Adam Gilchrist reportedly calling the company’s affiliation with Beckham a “monumental partnership.”
He then fell due $5 million on July 14 this year as the company celebrated the one-year anniversary of its listing on the New York Stock Exchange, reports the Sydney Morning Herald.
But when the company’s stock prices began to fall in 2022 due to what the lawsuit describes as “fiscal mismanagement and macroeconomic pressures,” F45 allegedly began withholding millions of dollars from it.
At the same time, Beckham reportedly lost nearly $10 million when stock prices plummeted from about $11.33 million when it was broadcast on January 15, 2022, to just about $1.97 million on September 23 — a fraction of that value [Beckham’s company] would have received if F45 had fulfilled its contractual obligations on time.’
In the lawsuit, Beckham alleges he provided marketing and advertising services, such as public and private appearances, photo and video recording, and advertising for the company on his social media and in print materials, but that the company withheld millions of dollars from him
The lawsuit also alleges that the company gave other investors, including “insiders and directors,” “preferential treatment” that allows them to benefit more from their property, according to The Blast.
During the same period, it said, the company “issued significantly more stock to various companies affiliated with Fortress Investment Group and accelerated the transfer of other stock to Wahlberg, another celebrity who is also a board member, director and insider. ‘
DailyMail.com has reached out to F45 Training for comment.
The former NFL wide receiver previously filed a lawsuit against the fitness company, alleging it owes him more than $700,000 in unpaid wages
Former NFL wide receiver Terrell Owens previously filed a similar lawsuit against the fitness company.
According to the Bleacher Report, in his 2017 lawsuit, he alleged that F45 paid him no more than $700,000 in unpaid wages.
In the lawsuit, Owens claimed he agreed to appear in a promotional video for $15,000, which both sides say was paid for.
But Owens said the gym should also pay him $25,000 for each of the first 25 gumball shops opened in the United States and another $5,000 for each additional opening thereafter.
At that time there were at least 45 gyms in the United States.
Owens is seeking at least $725,000 in damages, but according to the Bleacher Report, the CEO has denied the allegations, saying, “Everything that has been filed is a pure fabrication of the truth.”
He said the company plans to counter Owens over the claims, saying, “We’re not a company that doesn’t pay our bills.”
But a judge eventually ruled in favor of Owens.
The company went public on July 15, 2021. F45 Founder and CEO Darren Richman, Greg Norman, Michael Raymond, Chris Payne, Mark Wahlberg and Adam Gilchrist are seen ringing the bell on the New York Stock Exchange on the day
However, the company has previously announced that it plans to cut staff and downgrade its profit and revenue forecasts for this year after promising a number of celebrities hefty compensation for their support.
For example, former NBA star Magic Johnson received $4 million in cash and $5 million in stock, while American model Cyndi Crawford received $5 million in stock, reports the Sydney Morning Herald.
Overall, the company reported $4.5 million in stock-based expenses related to its celebrity deals over the summer and future liabilities of $4.5 million in stock-based expenses, according to the Herald.
And by the end of June, the company was down to $8.5 million in cash but $60.6 million in debt.
CEO Ben Coates then announced in July that the company no longer plans to expand as it shifts its focus to maintaining its liquidity and profits.