It Pays to Share

Failed business deal

In recent news, a former footballer and an actor go head-to-head in the ultimate legal showdown of a business venture gone awry.  In the U.S. District Court of Central California, David Beckham filed a complaint against the Syndey, Australia-based company F45 Training, which is 36% owned by Mark Wahlberg.  Beckham claims that Wahlberg approached him to serve as a brand ambassador for the company but was later allegedly duped out of millions.  The former athlete alleges breach of contract and fraudulent conduct.  Since the initial filing, Wahlberg has denied the accusations and is seeking a dismissal.

While Wahlberg claims that Beckham’s lawsuit is not factually based and lacks legal merit, Beckham refers to an agreement with F45 Training that contractually afforded him $1.5 million a year and shares of stock in the company that, after going public, would pay out at the six-month mark and the twelve-month mark.  Although Beckham claims that he upheld his end of the bargain, which included posting numerous social media posts promoting the brand, F45 Training seemingly failed to issue the stock payout until eight months after the agreement date, at a time when the stock price plummeted.  During this eight-month period, Beckham’s legal team sent various letters asking for the opposing party to remedy the breach of contract. 

In July 2021, F45 Training went public, which would subsequently make the company contractually obligated to issue shares to Beckham in January 2022.  According to the lawsuit, when the shares were actually paid out, the value was significantly less than what the shares were worth in January, at a difference of about $9.3 million.  In terms of compensation, Beckham’s lawyers are seeking the lost value of $9.3 million, an additional $5 million, as well as $4.5 million in wages that he would have received had he finished his agreed upon five-year tenure with the company.