Riot Games has announced they will introduce a salary cap to keep a competitive balance in the League of Legends European Masters Championship (LEC).
This strategic move is announced with the intent to support the long-term financial stability and competitive balance of the high-stakes League of Legends esports championship.
The move is in-line with many sports leagues around the globe, which have introduced salary caps to stop powerful or rich clubs from dominating the league. It essentially means teams with a rich backer or many sponsors does not just buy up all the LoL talent.
The impending 2024 League of Legends (LoL) esports season will witness the inception of Sporting Financial Regulations (SFR). These newly-minted financial rules are designed to encourage teams to keep the cumulative salaries of their top five highest-paid players beneath a specified annual threshold. Should teams overshoot this financial benchmark, they will be subjected to an additional fee (known as the SFR Fee).
Notably, a portion of this fee is allocated to support the tier 2 League of Legends esports ecosystem. The specifics of how these funds will bolster tier 2 remain unclear, with further clarification pending from Riot Games.
According to Alejandro ‘anonimotum’ Gomis, who initially disclosed the news via Blix, the LEC salary cap is projected to be approximately €2 million. This amount is not static, with reports indicating that the cap will undergo annual adjustments.
Through a post on the official LoL esports website, the LEC outlined its vision behind the introduction of the SFR. The overarching goal is to cultivate a financial landscape that is not only sustainable but also conducive to the steady and scalable growth of professional players, partnered teams, and the league as a whole. This structured approach is expected to shield the LEC ecosystem from the perils of unsustainable expenditure.
“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,” Director of League of Legends Esports, EMEA, Maximilian Peter Schmidt said.
“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.”
Schmidt further emphasized that this initiative is expected to prompt teams to adopt sustainable business practices, thereby offering players job security and serving the league’s fanbase for the foreseeable future.
“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,” he said.
The LEC’s decision to implement the salary cap comes as the Overwatch League battles financials troubles, while several other popular esports games have had to look at their business models and consider changes.