Since 2021, there have been ongoing discussions about implementing salary caps in the LCK, despite opposition from T1, one of the league's biggest teams.
However, on April 13, a report by Inven revealed that all ten LCK teams reached a consensus to introduce a salary cap in response to the escalating wage costs within the league. Some prominent organizations like T1 and Gen.G reported significant operating losses, highlighting the urgency of resolving the league's financial situation.
As of July 19, the LCK has officially introduced the Sporting Financial Regulations (SFR), a system that establishes an upper limit on the total annual salary paid to players by each team. If the cap is exceeded, teams will pay additional costs, and these excess funds will be distributed to other teams, ensuring continued investment in players and maintaining competitiveness across the league.
The SFR comprises two main components: a spending cap and a recommended spending floor. The spending cap is determined based on the combined total of the top five highest-paid players on each team and will be recalculated every two years. Notably, there is no salary cap for individual players. Additionally, players with exceptional track records, like T1's Faker, will have only half of their salaries counted towards their team's overall cap, acknowledging their past performances.
The recommended spending floor requires each team to invest a minimum amount of annual salary in players, set at 70% of the revenue currently distributed by the LCK to each team in 2022.
If a team surpasses the upper limit, a tax will be applied, and the collected tax will be distributed among LCK teams that fall just above the lower limit or below the upper limit. There are certain exemptions for players who have achieved remarkable milestones in their careers, such as winning five or more LCK splits or three or more international competitions like the Mid-Season Invitational and Worlds. These players will only have 50% of their annual salary counted towards their team's total cap.
Moreover, players who have been with a team for three years or more will receive a 30% discount when calculating their team's total cap amount.
With the implementation of these regulations, the LCK aims to stabilize its financial situation, ensure fair competition, and secure a sustainable future for the league and its teams.
