It has recently come to light that the LEC is considering the introduction of the salary cap. Apparently, the league is reportedly developing a new salary system.
High salaries in the LEC
Over the past decade, LoL league fans in Europe have witnessed the emergence of strong “superteams.” Likewise, in recent years, the community has seen organizations that belong to the LEC increase their budgets. These increased budgets are used to build rosters with superstars at every position on the team.
LEC salary cap
According to information revealed by Alejandro Gomis, a journalist specializing in esports, the LEC has plans to impose a salary cap. According to Alejandro Gomis’ information, the days of high budgets for LEC organizations are ending. Apparently, teams will be able to spend a maximum of €2 million on their players’ contracts. However, organizations that exceed that limit will be required to pay a luxury tax.
The luxury tax is a strategy that the LEC intends to implement to encourage teams to spend within the given budget. In turn, the purpose of this tax is to punish organizations that do not comply with it. On the other hand, it has been reported that the luxury tax will be 50% of the amount the organizations spend above the salary limit imposed by the LEC. In turn, it has been reported that the money collected from the luxury tax will reportedly be distributed among the league’s teams, as in other second-tier regional leagues.
Sources: LEC 🇪🇺 is expected to apply a salary cap.
At the moment it is expected that there will be a spending limit of 2 million annually per team.
Read all details on @blix_gg ⬇️https://t.co/UP5ZzF8mxP
— Alejandro Gomis (@anonimotum) September 27, 2023
Given the current situation in esports, many fans have been surprised by how long it has taken the LEC to implement the salary cap system. Recall that in recent months, we have seen how many organizations have had to close their doors due to financial problems. Similarly, some organizations have had to reduce operating expenses to keep their doors open substantially.
Winter in esports
The idea of a winter in esports has been floating around the league for a long time. This idea has taken on particular strength after seeing how so many teams have recorded losses in the millions over the past few years. This year, we saw how some European organizations closed their Game Changers rosters in VALORANT. While other traditional organizations like TSM and CLG said goodbye to the LCS.
Now, a salary cap in the LEC can go a long way in stabilizing the LEC in the long run. With this measure, teams cannot splurge money on their payrolls during the off-season unless they want to risk paying a high luxury tax. Undoubtedly, some organizations could pay these luxury taxes without affecting their finances. But, in general, the salary cap can provide uniformity among the teams in the league.