LEC rules for long-term financial sustainability

Shirley Pulis Xerxen October 2, 2023

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LEC rules for long-term financial sustainability

The League of Legends European Championship (LEC) has introduced a set of financial rules known as the Sporting Financial Regulations (SFR). The reason behind the move is to promote the long-term financial stability and competitive balance of EMEA’s tier-one League of Legends tournament. The aim of the LEC SFR is to encourage teams to keep the total of their top five player salaries below a predetermined threshold, with those who do so having to pay an additional fee (SFR Fee). The rules will come into effect at the start of the 2024 League of Legends esports season.

The SFR Threshold is calculated based on several 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 a contract with the team either during or before the end of the 2023 LEC Season Finals.

Financial sustainability

In the statement announcing the new rules, Maximilian Peter Schmidt, Director of League of Legends Esports, EMEA 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. 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 rules will be welcome news, as salary inflation in esports can dramatically interfere with team progress. Esports teams concur that the best players are necessary for team success. Since esports salaries are determined by an open market system (no unionization in esports leagues means there are no collective bargaining agreements capping what teams can spend), a team’s owner is the only factor that sets spending restrictions. Rich teams spend a lot to get the players they desire, which has caused salary instability because of raised player expectations.

The 2024 LEC Season Finals will be held in Munich, Germany. According to Esports Charts, the LEC Finals 2023 drew a peak viewership of 654,942, with an impressive average of 244547 viewers. Total hours watched was 8,762,907 over just under 36 hours of airtime.

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