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LEC Introduces Salary Cap
- The LoL EMEA Championship introduced a salary cap
- It'll go into effect with the 2024 season
- The teams will have to maintain salaries within a certain range
LoL Europe (Getty Images)
On Thursday, September 28, the League of Legends EMEA Championship announced it is introducing a salary cap for the 2024 season. This confirms previous rumours of the Sports Financial Regulations coming into effect in the European LoL league at the end of the 2023 season.
The LEC announced Sports Financial Regulations, or SFR, which will introduce salary caps for all European LoL teams starting with the 2024 season. According to the new rules, the teams will have to maintain the total sum of its five highest-paying player salaries below a certain threshold. Teams who exceed that threshold will have to pay an excess fee – the SFR fee.
The LEC explained that by introducing salary caps, it intends to create a financially sustainable environment for the players, teams, and the LEC league as a whole. This would create a situation where "all parties" will be able to grow at a scalable place while protecting the ecosystem from unsustainable spending.
The LEC also believes that introducing salary caps will create a better competitive balance in the league so as not to give an unfair advantage to more financially capable teams from signing the top players.
"In the current economic climate, we are dedicated more than ever to creating a sustainable future for our players, teams, and the LoL Esports ecosystem in EMEA as a whole," said Maximilian Peter Schmidt, Director of League of Legends Esports, EMEA.
"The LEC SFR, which will come into effect from the beginning of the 2024 Season, is one way in which we're continuing to work towards our goal of long-term financial sustainability. By doing this, we aim to encourage teams to operate more sustainable businesses to provide job security for players and ensure we serve our fans for decades to come."
The new rules will introduce two SFR thresholds – the upper and lower SFR thresholds. The lower threshold will amount to 50% of the SFR threshold, so there is a minimum wage teams have to pay their players. The SFR will consider the players' salaries, team financial data, the League Revenue Pool, and other market indicators.
With the new LEC DFR system, the teams will have to follow certain rules.
- Maintain the total sum of salaries paired to the top five highest-paid players within a range
- The range includes the upper and lower spending threshold
- The lower spending threshold is 50% of the SFR threshold
If the sum of the top five players' salaries exceeds the DFR threshold, the teams will have to pay 50% of the excess to the league as a fee. If the sum exceeds 150% of the threshold, the team will have to pay 100% of the excess to the league.
One exception to the rule applies to teams if a player entered a contract with the team during or before the 2023 LEC Season Finals. In this case, the SFR spend will be reduced to 1/5 of the SFR threshold.
The new rules will be introduced on Tuesday, November 21, 2023, and end on (Monday, November 18, 2024.