Episode 19: The Slaying of Echo Fox
You're one of those things that when I read them they were so crazy that I I went over to one of my colleagues. I was like, you are never going to believe within this thing. Welcome to episode 19 of the great sale a podcast that examines the greatest success stories and they're spectacular fails would led to the demise of the most prolific people Brands and companies. I am your host Deborah Chen off this week. We'll be looking at Echo Fox In May of 2019 riot games, one of the biggest game developers and Esports tournament organizers made a public announcement to the nearly 400 million members of the E Sports community in an issued statement ride announced that it had been investigating a situation with a team owner who had allegedly used discriminatory and rakes language. The team in reference was echo-fox. One of the ten franchise teams that had the coveted slot in Riot games prestigious League of Legends World Series tournament off the incident involved the co-founders of echo Fox former NBA player Rick Fox and entrepreneur Amit raizada Fox had publicly accused rosada of making threads young and spewing racist comments towards another executive as more dirt began to surface allegations swirl constantly each one more out. Wages than the last but Riot games had enough and elected to issue a 60-day mediation. For Equifax to either remove the executive who violated their hate speech these or forced to relinquish their spot in the championship series The Clock Was ticking and the objective was clear. But what with the management office Echo Fox Jew Welcome to the story of echo Fox spawns in 2015 eliminated by 2019. When echo-fox emerged there was the Paragon of Excellence that projected a legitimacy that mirrored the increasing lucrative and popular Esports world's. It was really the first celebrity driven team managed by a few pro athletes that understood the performance parallels between sports and gaming wage but that promising star soon devolved into a he said he said accusation restraining orders death threats drug-fueled parties and other scandals that track the company down. I myself have been fascinated with gaming culture for some time and have had the privilege of attending several competitions including the Intel extreme Masters in kattowitz of Poland and some local events within the United States. The tournaments were insane often times matching the same intense energy, you'd find a traditional live sports events from Celebrity Status Gamers off their dedicated fanbase to experience the same nerve-wracking Thrills watching their favorite team battle worthy rival down to the jerseys the theme music and trash talk and perhaps that's why it's the fourth biggest sport in the world with the market for Esports betting valued at around Thirty billion dollars. Back in 2015 former Los Angeles Laker and 3 time NBA champion Rick Fox made a bed of his own when he met an investor by the name of Amit raizada at a Hollywood party and decided to dive into the Esports business with him along with another gentleman by the name of Khalid Jones rosada and Jones both put in a million dollars to purchase a spot in the league championship series a k a l c s which was owned by Riot games and that cost them a million dollars on its own with the second million going towards running the new team ground and if anyone was groomed to put Esports on equal footing with the NFL and NBA Fox was a man. He was the first one of the prominent figures just the traditional Sports World to embrace professional gaming in a serious way here is Daniel rossen journalist news editor and content creator with the score Esports, I think. Echo Fox started in 2015 early to kind of became known to the public is when he took the end date they bought their spot in the League of Legends championship series, which are sort of the the major league for North America a bunch of teams, you know and NBA equivalent or an MLB equivalent, you know, this is where you go to play if you're North American player and want to play professional baseball saw and believed and that saw previously belong to gravity games not as important, but the the exciting thing was that it was being at least from the outside looking in we all thought wow, Rick Fox is coming into Esports and especially in 2015, you know these days Esports a lot of celebrity investors, you know, he'll O'Neill even vested in an RGA. Gluco is Jennifer Lopez so is a rod right like live a lot of celebrity and investors, you know, the weekend has changed ownership share in an OverWatch League team and drink a lot of stories like that. But in 2015 now really wasn't the case there were very very few big names investing Sports and it felt like in 2015 wage. Wow, you're the 81 NBA change be right a famous celebrity a sports star who really seems to care. You know, he went to the League of Legends Final Madison Square Garden and I think twelve or fourteen right that whole video about it. His son was a big League of Legends dinner or still is he seems to genuinely care and like this and and you know wants to use it at least partially the way to connect with his son but also as a way to like, you know, courage new athletes, he went on The View to talk about sports. He went on all kinds of like, you know, MSNBC just new shows to talk about e-sports and how we do to positively and how it compared and positive thoughts to traditional Sports and and compared to his experience as an athlete and that was something that was really really cool and exciting and we were all and we all thought wow, this is going to be the beginning of something really really big fox and his Partners usually purchase Major League of Legends team gravity in 2015 under Vision Venture partners, and then rebranded it as Echo Fox then in 2006. When the New York Yankees invested actually dropped ten million dollars to become one of the first franchises in the North American professional league for the LCS. And when fox went off he went in big-time Echoes headquarter was based in the ritziest part of Los Angeles Beverly Hills. The 30,000 square-foot facility was like a jacked up man cave box with plush leather seating and inviting Lounge area that had ping pong tables a handcrafted with handmade wood with a state-of-the-art training facility where the Academy teams would practice six days a week the vibe and the execution of Echoes mission was at the intersection of experimentation and Innovation and tested the Realms of professional gaming. Here's the other thing though. It wasn't just the facade. It was plainly apparent how passionate Fox was about gaming and he proved to be Visionary running the team through applying Concepts that he had learned as a professional job. Athlete to e-sports. He recruited former Denver Nugget Jared Jeffries who then came on board to manage the actual running of the team hiring coaches scouting talented players, negotiating contracts merchandising and finding sponsors and for a while. They were really making moves. I remember I am a really big Street Fighter guy that's sort of my sports background and I remember one day they taught every fighting game free agent. That was out there. They bought Justin long. They bought momochi. They bought I think so. So keto the song box a bunch of Smash requires me to King some of the biggest most famous fighting game players in the world. And so the most successful I think Echo Fox something like something observe like three Evo championships were won by the plane a while. They were under Echo box these fighting game players put together something like three or four World Championship or playing for the team and that's crazy and it rarely happens in in in fighting game competitions that like dead. Team dominates things cuz it's not really team-based and not a lot of players get sponsored by bigger dogs like this, but Echo Fox was all over fighting game tournament for like a year and half that was sort of I think for a while. They're real claim to fame. They I think they also had a Call of Duty team that wasn't all that special like years of war team that I think did did okay. I haven't really called ears too heavily. They briefly had a csgo theme that was not very impressive. But really they're they're you know, there'll be that they were a league team that had a lot of fans do too I think race being popular and then finding a good number of like popular belief players like Brogan's and they're fighting in division. That was just some of the best most popular place in the world playing at their Peak. My 2018 Vision has raised an additional thirty eight million for its e Sports Venture from some major names and sports including Kevin Durant's Odell Beckham jr. And the Saint Louis Cardinals. It was a huge influence to the E Sports World and the first time a major non-endemic organization formed inherently changing how people looked at a sports and for a while. Everyone had their eyes on a guy. But just like a team where no one wants to play support echo-fox would ultimately find themselves in a losing position back in 2018. Rumors began to emerge the first rumors. We always heard about Echo Fox were about just sort of things behind the scenes being a little bit. What's the word like a loosey-goosey off? There wasn't a lot of Direction in order behind the scenes, but then we started hearing in 2018 players being dropped sort of en masse that kind of dropped everybody who was at the absolute best names that they had many of those betting employers were dropped. I think the only people they retained were some of the Smash Bros players need to King and those guys they dropped pretty much all of their like non League of Legends players aside from those two and even the link team I think saw some pretty significant cuts. And so we were kind of looking everything what's happening here and then sort of the first like really big public off. Right a flag was in early 2019. I wanted it was March or April a journalist. Richard Lewis released a report through the outlet skirt show that Rick Fox was trying to leave Echo box office. He founded the company. His name is technically on due to racist language used by a shareholder in emails to him and to his business partner Jake Paul who at one point with the CEO of Equifax this shareholder who used that break this language came out to be a guy by the name of Amit raizada. But so that was our first evidence that like things were wrong because of race box wants out something must be up. However, the public spectacle occurred in April of 2019 when Fox alleged that Rosanna use racist language aimed at Echoes previous CEO Jace home during an internal dispute and according to the accusations. This wasn't the first time that the racial epithets were used towards Hall and even Fox himself crucially, the claims were backed up evidence Regatta in an interview with me. He did confirm that he used greatest language specifically the n-word in an email to Jace Hall. He also confirmed that he did send an email to Rick Fox that Rick Fox construed as being threatening to him. He can kind of be construed either way, you know as a journalist. I'm not going to say which way I feel about it or whatever but he has owned off to me saying the things that people have accused website when Fox first went public with this he announced that he would sell his stake in the team that he had founded stating that such flagrant racism coupled with Jim. That's against his family had created an environment that he could not be a part of in an email obtained by dick sarit. Oh, he also announced a situation with the shareholders. He was quoted saying off. This is an official notification of my intention to exit the echo Fox organization as a shareholder and participant as soon as I am able to facilitate a transaction to do so the recent purchase and abhorrent display of pure racism made by a significant Equifax shareholder as well as threats to my family have made it impossible for me to continue to remain associated with the company. However, Fox quickly reversed course and instead offered an ultimatum to the parent company of echo to Vision Venture partners, and that was let rosada go or am I would walk rosada along with the vision Venture Executives Stratton sclavos Khalid Jones and they're legal team fired back with a lawsuit claiming that fox was simply create wage. Diversion from an apparent Trainwreck. He had caused that Echo alleging self dealings and gross ineptitude that cost investors millions of dollars rosatos lawyer said in an email statement that quote if Rick Fox wants to blame someone for Echo Fox's failures. He should start by looking in the mirror Rick ping pong back with a suit of his own office alleging that his ex-partners committed fraud conspiracy and breach of contract interestingly enough Stratton sclavos a co-owner of the San Jose Sharks and former CEO verisign filed a restraining order against Fox, but he was denied and he and the rest of the members of the parent company along with others affiliated with Equifax accused Fox of quote willful wanton and intentionally destructive efforts towards the partnership Fox had also accused rosada in sklavos of using his star power as the faith. The company and then behind the scenes misappropriating corporate funds that included leasing a $20,000 a month Beverly Hills house a hundred thousand dollars in unapproved expensive and it's $350,000 yearly salary. So there's a little bit of a he-said-she-said here or he said he said in this case Rick Fox alleges that raizada wouldn't budge that. He didn't want out of life was getting some significant share of the proceeds from the sale of Equifax has sought or rather. He wanted to be bought out and nobody could buy out what he had or something like that. It was it's sort of complicated. But either way Rick box right now that wasn't budging on his position unless some significant amount of money was being presented to him raised NADA says that actually what Ryan was telling us publicly was not what was happening. He presented document that package which this that Riot found for material breaches and Echo Fox's agreement with Riot games. So those reaches were the first one was right out of you that problematic language that I thought of violated the rules of the league. Yep. Using racist language in telecommunications. They don't stand for that. That's a big one. But the other three were more about their Finance. The second one was that they had over a million dollars in debt without rice cakes. The third one was that they didn't have at least five million dollars in a liquid reserves, which personally that seems very difficult for any sports team to have honestly, but maybe that is what is in rights agreement with them and the third choice not getting rise consent for having over 10% new equity in the company, which that takes us down a whole other mess with how that Equity was was created for I thought it to have but the point is that right out of Ledges. They were far more issues with Echo Fox behind the scenes than him using that language. Riot very quickly caught wins at the situation and wasted no time going into full investigation mode and after conducting its own independent review it gave Echo and ultimatum. If its own get rid of your races executive or sell the LCS lot now, we're Thirty million dollars, but within the 60-day period nothing happens except for management continuing to fight amongst themselves this ultimately led to riots seizing the slot and taking matters into his own hands to find a buyer. Once they made that move it was crystal clear that Echo Fox was going down, you know. But wait, there's more in October 2015 Rick Fox sued, Amit raizada and strong strong Volvo's. I think formerly of the San Jose Sharks NHL team as well as a former CEO of Equifax and general investor in Echo Fox and vision Venture Partners on the whole Echo Fox family of investment groups, but he walks around major investor in a call and response accused him and raised out of several broad was in there, but do Siri misdeeds it was kind of crazy but the absolute craziest part of this month actually insane and I want to preface it by saying I have never found evidence to this being true or untrue. And as far as I know this lawsuit was settled or dismissed, but he accused Strong's clavos of putting the company into a financial tailspin because he was self-dealing he was taking money out of the company in order to fund his heavy use drug lifestyle and that whole thing sucks. And being addicted to illegal drugs made him financially indenture to Amit raizada because he needed right. His money to fuel his drug habit and right. I had a lien on Chicago's his house which meant that until he paid off his debt to him for drugs. He wound his home. It was a truly absurd story that started with brasada and scavo was doing drugs together as as follows will get addicted to said drugs and then again financially indentured to him to deal with drug habit. It was crazy. It was one of the wildest lobsters have ever read and I have read all weirdly enough any sports. I have heard a lot of lawsuits. He was truly insane and to this day. I don't know where the accusations came from. I don't have any evidence that they were true. I guess I also don't have any evidence that they were untrue, but they really were urging you're one of those think that when I read them they were so crazy that I went over to one of my colleagues. I was like, you are never going to believe within this thing. Finally by October of 2019 the LCS slots was sold two prominent Esports organization Evil Geniuses for thirty million dollars, but not without some drama there as well the sale officially marked the end of what turned out to be a very short era for Echo Fox after the sixty day grace period when Regatta had not been removed from Equifax Riot sort of took control of the sale of echo Fox Echo box had brokered some sort of deal to have kroenke sports and entertainment which is run by the coffee family who owned the LA Rams and Arsenal. I believe among a bunch of other sports any sports teams cranky was supposed to buy Echo Fox and the LTS lot that deal ended up falling through Ryan's ended up selling the slots to Evil Geniuses and other major sports organizations for $30. And then it was pretty much over the party was done without their LCS La Vaca Loca Fox couldn't hold onto their League of Legends player. So they were all let go. They didn't have a major team that was bringing in advertising. There was no reason to keep around other people. They still held on to some of their fighting game players actually kind of hilariously a lot of the fighting game players were still playing with Echo Fox jerseys for months and months and months because technically took a little legal entity that existed and they were still under contract to wear that Jersey at events. But echo-hawk was social went dark. Nobody was really like thinking about them. With countless rumors floating around accusations flying pending lawsuits looming this became the point of no return and by the end of 2019 and Ed Fox investor officially confirmed that the team was defunct its players had been let go and the company itself disbanded. Once the mudslinging starts off is really hard to fix all the other problems. This has happened. I'm sure in plenty of other phases of plenty of other companies but like once things start going bad in public all your under the surface problems just get exacerbated if it's already a sort of Rick Fox versus the world conversation going on behind the scenes of getting people money. Once that conversation becomes public and people are taking time. You start looking around, see if you can jump to another shift one. That's a little bit safer when it's a little bit more, you know PR friendly there is no shortage of people trying to create new e sports teams trying to have new Esports startups. There was also especially at the time No shortage of teams trying to get in on newly franchise leaks. The OverWatch League was on was you know, I think happening at that point it already happened. The Call of Duty Lee was on the horizon League of Legends was people were talking about buying out font. Another thought was sold that very reason I believe why was you who are in all this trouble like with you know, this whole public relations trouble and your league spot. Your entire major aspect is at risk of being sold, but I'm sure content with possibility you not making all the money you would want to make on why should we invest in you? Not only eight hundred other new Esports startups who could potentially not be collapsing in a life and I think it would it would Echo Park would have been a really unsettled to an investor once all of this dirt came out, you know, as soon as this whole Rick Fox versus Amit raizada viewed it went public was soon as you know, this reporter Victor tow came out as soon as Rick Fox News on TMZ saying he would not work with a racist. Once that happened. I really do think it was kind of in retrospect with the end. The storm of problems around Echo Fox was simply too great to weather and unlike most games. No one had an extra life to spare. What had ensued at Equifax highlights the issue of racism diversity and accountability within an industry that is undergoing explosive growth and despite all the star power and strong players. The company was crushed by its own ownership and the controversy surrounding the allegation and misbehavior of its management. I think one of the biggest things that that goes off from the outside looking in it that we all wanted to succeed because we all we all like four Fox and I really do think to a certain extent all of these Sports still really likes for Fox. We we recently did a video recapping all of this stuff on the forty-fourth YouTube channel, like sort of a a look Bank more narrative than than journalistic and in the comments were flooded by people saying that Red Sox are raw deal whether I agree or disagree is irrelevant. I think that he was such a great figurehead for the company that people couldn't help want him to want the company to succeed. I think if I were to give advice to these were is trying to find that kind of person can honestly be a great idea. Maybe that person doesn't have to be in charge. Of Team operations or financial operations, but I do think having that kind of face having something that fans can rally behind somebody who gets the community and they get them. I think that I'm thinking only be helpful. You see it with some organizations now Hector Rodriguez, otherwise of hex founded optic or co-founded optic with a major part of that team's growth and after he got sort it out due to complicated series of financial things and RG6 them up and the entire optic fanbase moved with him. He became co-ceo of that company and he brought people with him. He's on a player, you know, he does create some content but she's not a guy who is out there playing games on the server every day. He is a business person and that's still worked and and I think that finding it's hard to find a guy like her career Fox his home to find a guy like X, but I think finding that kind of person he's going to make your company stand out and be different and be special and you know, if you find that person and you also managed to not you suck. Good language and Communications with your public shareholders. I think you'd have a pretty great company going. Regardless of actual legal rulings it's clear that there were no real winners after the echo Fox debacle would started out as a true glimpse of potential for new air bags of Esports Came Crashing Down and no matter how much settlement money gets paid out. Nobody likes to lose in front of a crowd in the end Equifax. His fate was not determined by a fierce competitor on the game stage, but rather by throwing a hand grenade into its own tent. Special thanks to Daniel rossen for contributing to this episode and sharing his valuable insight and research on Echo Fox and thank you for tuning in. This week's The Great fail. Please make sure to visit our website at the great failed, for behind-the-scene audio and video footage. 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