Riot Games’ League of Legends EMEA Championship (LEC) announced early Thursday morning that it will introduce new financial regulations for teams called “Sporting Financial Regulations” (SFR – the same name used for these regulations in other regions) – for the start of the 2024 LoL esports season.
The LEC pushed back on the term “player salary caps” (a phrase used in a report by Blix.gg on Wednesday) because the new guidelines do not put a ban in place on what teams may pay an individual player based on a threshold of a specific amount of money (LEC did not provide exact numbers related these new regulations).
The new regulations, which will be in effect at the start of the 2024 LoL Esports Season, will require teams in the league to maintain the total sum of salaries (“SFR Spend”) paid to the top five (5) highest-paid players in a team within a certain range that 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.
The “SFR Threshold” is calculated based on LEC player salaries, “League Revenue Pool” of the current and forecasted years, team financial data (revenue and expenses) and other market indicators.
Teams will have to pay an “SFR Fee” (50% of the excess) to the league when the top five player salaries on a team exceeds the “SFR Threshold.” If the total sum exceeds 150% of the “SFR Threshold,” the team has to pay 100% of that excess to the LEC as an SFR Fee. Around 50% of that fee would be distributed to LEC teams that have complied with the “Team Floor” and the “Threshold” rules, while the other 50% would go to the league to support the EMEA LoL Esports tier-two ecosystem.
There are some expectations, according to LEC’s announcement:
“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.”
This new policy will be introduced at the start of the 2024 LEC Global Contract Start Date (Tuesday, Nov. 21), with the first cycle running until the 2024 LEC Global Contract End Date (Monday, Nov. 18, 2024).
“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.”
More details on these new regulations can be found at lolesports.com. The League of Legends Champions Korea (LCK) for South Korea announced similar regulations earlier this year, and the League of Legends Pro League (LPL) in China has reportedly initiated something similar, though there has been no official announcement on that in the region that we are aware of. If new regulations are implemented within regions within the LoL Esports ecosystem, we suspect that stakeholders will have some say in how they are shaped and local labor laws will be taken into consideration. It is unclear, as of this writing, on when and if the North American LoL Esports ecosystem (LCS) plans to implement any of these regulations.
