To support the long-term financial stability and competitive balance of the LEC, the league is going to introduce new financial regulations – known as Sporting Financial Regulations (SFR) – for the start of the 2024 LoL Esports Season.
The LEC SFR will encourage teams to maintain the total sum of its five highest-paid player salaries below a certain threshold, with teams exceeding the threshold having to pay an excess fee (SFR Fee).
In doing so, the LEC seeks to create a financially sustainable environment for its pro players, partnered teams, and the league itself, allowing all parties to grow at a healthy and scalable pace, and protect the ecosystem from unsustainable spending practices. In addition, the framework will support the league by creating a better competitive balance and more engaging competition, further enhancing the experience for players and fans.
“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. 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,” said Maximilian Peter Schmidt, Director of League of Legends Esports EMEA.
SFR will encourage each team to maintain the total sum of salaries (known as SFR Spend) paid to the top five highest-paid players in a team within a certain range. The range includes both an upper spending threshold (SFR Threshold) and a lower spending threshold (SFR Floor), with the lower spending threshold amounting to 50% of the SFR Threshold. Meanwhile, the SFR Threshold is calculated based on a number of considerations, including LEC player salaries, League Revenue Pool of the current and forecasted years, team financial data – such as revenue and expenses – and other market indicators. Teams that exceed the SFR Threshold will be imposed with an SFR Fee.
An exception will be made to teams if a player enters into a contract with the team either during or before the end of the 2023 LEC Season Finals. In this instance, the SFR Spend will be reduced by one-fifth of the SFR Threshold or the actual salary amount; whichever is lower.
The policy will be introduced starting from the 2024 LEC Global Contract Start Date (21 November 2023), with the first cycle running until the 2024 LEC Global Contract End Date (18 November 2024).