X1 Racing League in legal bind on non-payment of professional fees

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MUMBAI: X1 Racing League, organised by Indian racers, Aditya Patel and Armaan Ebrahim, and its CEO, Abhinandan Balasubramanian, is being dragged to court on non-payment of fees to senior professionals from the sports industry associated with the inaugural edition of the league in end-2019.

After much hype during its launch phase, the first edition itself was a watered-down version of what was announced earlier, and that itself should have given an indication of financial trouble. But those who worked on the event were unaware of the magnitude of the problem, and are realising it now as nearly eight months after the completion of the league they are still to be paid amounts ranging from 60 to even up to 75 per cent of the amount owed to them contractually.

The problems have been compounded for these professionals as sports has been the worst-hit by the ongoing global pandemic. All of them who agreed to speak to SportzPower, on conditions of anonymity, depend on projects like these, and after having committed two to three months for the league, followed by six months of no assignments, have been hit very badly financially.

"I have been repeatedly chasing them, and they kept promising that they will pay, but are now using COVID-19 as an excuse; but the money was owed long before COVID happened. They have been making empty promises and giving dates of payment which have never been met. It's absolutely disgraceful what they've done," said one of them who has a legal contract. 

The others echoed these views and would be resorting to legal pressure to get their dues. "We were to be paid almost 80 per cent of our contracted amount before the final day. We didn't get it, and despite that, in the interest of the event we completed the work, hoping that we would get the amount immediately after the event. Initially the excuse was that one of the team owners has not paid up, while now COVID is a convenient excuse," said a veteran from the industry. He said that many events have had financial problems, but most sort it out and ensure payments are made, even if there is some delay.

The non-payment to those who executed under multiple constraints what was finally a hurriedly-strung-together event comes as a surprise because X1 Racing had announced raising funds through multiple investors, selling the teams to financially strong entities, and had also got sponsors in top brands such as OnePlus and JK Tyres.

Investments came through well-known names like Kunal Shah, founder and CEO of Freecharge, Anupam Mittal, founder of Shaadi.com, Raghunandan G, co-founder of TaxiForSure, Mohit Burman, vice chairman of Dabur India, and Jitendra Gupta, founder of Citrus Pay.

Add to this team owners in Sheikh Tahnoon Bin Saeed Bin Tahnoon Al Nahyan from the Abu Dhabi royal family, industrialist Akhilesh Reddy, Dhaval Gada, promoter of Pen India Studios, and Ameet Ghadoge, owner of the Ghadoge group.

In October 2019, in an interview to Overdrive, the CEO, Balasubramanian, had said: "We are investing about Rs 25 crore (Rs 250 million) for just the execution and production of the overall event - esports and motorsports. Also, the team owners are spending $10 million over a span of 10 years, incrementally on their respective teams."

In the same interview he said that "from the first round of investment to the second round of investments, people like Mohit Burman and LetsVenture have invested, we've seen over the last 18 months that valuation has grown 10x without the first season launch, and now with everything in place we're expecting to return at least 20-30x to them over the next 10-year period."

With this kind of economics at work, the professionals who are yet to be paid state that there seems to be no intention of paying it, even as some pointed out that they have been told that the league will continue in the coming years as 2020 seems a non-starter due to the COVID crisis.

In a recent report in exchangeformedia.com, it has been stated that the production company for the league is also a victim of non-payment. Moreover, the report said that though the company was given a cheque it has bounced, which could also lead to legal implications for the league organisers. X1 Racing had on board Sony Picture Networks (SPN) and its OTT platform, Sony Liv, as broadcast partner.

From what promised to be a game-changer for motorsports in India, X1 Racing is another victim of the folly many others have made of trying to replicate the Indian Premier League (IPL) template in toto, ignoring the main factors that make IPL a huge success story.

In an interview on 2 February 2020 to thebridge.in, Aditya Patel was already speaking about Season 2 and changes that would be made. “Cars – that will change without any doubt. We have a handful of other changes that you will see coming in Season 2."

He also said: “We’re not here to make a quick buck and run."

The sports industry, especially motorsports, will be hoping that is the case. But for any more seasons to happen, it is imperative for the organisers to clear all dues of professionals who ensured that some sort of a league hit the track in 2019. The fact that money was raised, and since there seems to be no complaints on payments from the highly-paid international racers who competed, it seems only these professionals who put together the event have been left high and dry.