Riot Games plans to terminate Echo Fox's team participation agreement in the League of Legends Championship Series on Monday if the team does not oust minority owner Amit Raizada, who used racist language in an email toward a business partner in April, league sources told ESPN.
If Echo Fox, co-founded and led by former NBA player Rick Fox, doesn't sell or buy back Raizada's equity, Riot will notify Echo Fox of a breach of their agreement and the team will be forced to relinquish its LCS slot, sources said. Echo Fox will be allowed to complete the season, sources said, but Riot will put the slot up for sale following the end of the LCS Summer Split on Aug. 8, with Echo Fox receiving a portion of the sale.
Over the next 48 hours, Echo Fox will be searching for a buyer or group to purchase their entire organization to avoid having their spot taken from them by Riot, a team source told ESPN. Representatives of Echo Fox declined to comment when reached by ESPN.
A specific sale price for the slot has not been determined. In June, Clutch Gaming's owners, the Houston Rockets, completed a deal with Dignitas parent company Harris Blitzer Sports & Entertainment for Clutch and Dignitas to merge. In that deal, Clutch was valued at $30 million, according to documents obtained by ESPN in April. The Echo Fox LCS slot is expected to be valued similarly to Clutch, sources said.
Riot had set a deadline of July 15 for Echo Fox to remove Raizada as a shareholder. That deadline was extended to Monday after Echo Fox submitted a resolution to Riot that would transfer Raizada's equity to a company operated by one of his family members, sources said. Riot declined that proposal.
In April and May, Dexerto reported Raizada's use of racist language toward Jace Hall, former Echo Fox CEO and the head of Twin Galaxies, in an email exchange. In another email thread to Rick Fox's attorney, Raizada threatened Fox and his family after Fox expressed interest in leaving the company to work on other projects with Hall.
On May 15, Riot notified Echo Fox that it would give the company 60 days to remove Raizada as a shareholder of the company. Over the past two months, Echo Fox have looked for a solution but due to internal disagreement, the team has not been able to find one beyond the proposal submitted to Riot last week, sources said.
If left unresolved by Monday, it will be the first time Riot Games has seized an LCS slot from one of its teams since the league moved to a franchise model in late 2017. Riot previously removed two teams, Renegades and Team Impulse, from the LCS in May 2016, citing wrongdoing and collusion for the former, and failing to pay its player for the latter.
In late 2015, Fox, Raizada and another investor, Khalid Jones, founded Echo Fox and purchased an LCS team slot from Gravity Gaming for $1 million.
Since then, the organization has become one of the most notable and valuable organizations in esports, with Forbes reporting that the team was worth $150 million in October. Fox has taken an ambassador role in the industry, appearing on American television talk shows and participating in the International Olympic Committee and the Global Association of International Sports Federations esports forum in July 2018.
In October 2017, Echo Fox was among 10 teams selected as permanent partners in the LCS. To obtain the slot, Echo Fox agreed to pay $10 million, paid over a number of years, in franchise fees. So far the organization has paid $5 million of that total, sources said.