The LEC has implemented a salary cap for teams, restricting the amount they can pay players in wages. Starting from the 2024 season, the Sports Financial Regulations (SFR) will be in effect. Under this system, teams must keep the total sum of salaries paid to their top five highest-paid players within a certain range.
The SFR system consists of two thresholds: the upper (SFR Threshold) and the lower (SFR Floor). The lower spending threshold must be at least 50 percent of the SFR Threshold, ensuring a minimum wage for competing squads.
The SFR Threshold is calculated based on various factors, including LEC player salaries, League Revenue Pool for the current and projected years, team financial data, and market indicators.
If a team exceeds either the SFR Floor or SFR Threshold, they will be required to pay an additional SFR Fee. There are two scenarios in which organizations must pay this fee. Firstly, if the total sum of the top five players’ salaries surpasses the SFR Threshold, the organization must pay 50 percent of the excess to the League as an SFR Fee. Secondly, if the sum exceeds 150 percent of the Threshold, the organization must pay 100 percent of the excess to the LEC.
These SFR Fees are not solely claimed by Riot. Fifty percent of the fees will be distributed to LEC teams that comply with both thresholds, while the remaining fifty percent will be allocated to EMEA League teams to provide better support for the tier-two ecosystem.
Exceptions to the rules are also available. If a player signs a contract with a team during or before the 2023 LEC Season Finals, the SFR Spend will be reduced by one-fifth of the SFR Threshold or the actual salary amount, whichever is lower.
The new salary regulations will be implemented on the 2024 LEC Global Contract Start Date, scheduled for November 21, 2023.
Source: DOTESPORTS
