LEC lowers SFR threshold from €2M to €1.65M for 2027

As revealed this Friday, September 25, on its official EMEA Competitive Operations website, the LEC, League of Legends' EMEA regional league, the league's Sporting Financial Regulations are set to see their maximum threshold drop from €2 million to €1.65 million, representing a 17.5% decrease. The SFR minimum is also being lowered, from €1 million to €825,000. Unveiled In September 2023, this format has been in place since the 2024 season and will therefore undergo its first major change after three seasons, with a significant decrease in the maximum threshold.

In short, and to keep things simple, the SFR is a financial regulation mechanism introduced by the LEC that limits the payroll of each team's five highest-paid players through a spending cap. If the cap is exceeded, the team is subject to a luxury tax, with the penalties redistributed to help ensure the league's economic sustainability and competitive balance. Therefore, in both directions, in 2024, 2025, and 2026, clubs could spend a maximum of €2 million per season on these five highest-paid players, including salaries, bonuses, or additional compensation such as image rights.

It should be noted that revenue from players' personal sponsors, cash prizes, or housing assistance is excluded. In addition, a 5% error margin is allowed over the course of a year. In other words, if a team exceeds the threshold by 5% or less, it will not be sanctioned but will have to comply with the rule the following season or face penalties. Any team that exceeds the salary cap set by the league is subject to a luxury tax, requiring it to pay a fine equivalent to 50% of the excess spending. Conversely, if a club falls below the minimum threshold, it will not be penalized but is simply excluded from the list of teams eligible for redistribution.

As early as the last update on September 30, 2025, Riot had already hinted at this upcoming reduction of the maximum threshold, likely anticipating a decline in interest in its flagship product in Europe. Indeed, in an update to its document, the North American publisher stated that for the 2027 and 2028 LEC seasons, the SFR baseline would be €1.2 million, following three seasons at €2 million. Here, the baseline did not define the limit Riot would set, as the latter is recalculated each year for the following season, but rather the minimum level that this maximum threshold could reach. In the same update, Riot Games also revealed that the 2029 Baseline is expected to be lowered to 1 million, which likely implies a decrease in the maximum in upcoming seasons.

In this case, for 2027, the maximum threshold is indeed €1.650 million, above the €1.2 million baseline, and could not have been set below that €1.2 million level. With the minimum also being lowered, the SFR Floor is dropping from €1 million to €825,000. The calculation here is simple: the Floor is set at 50% of the Threshold.

To protect teams from an abrupt change in regulations, the LEC introduced a grandfathering clause, officially called a "Special Reduction." In practice, when a player has a contract signed before new salary rules come into effect, their compensation does not fully count toward the organization's regulated budget if it is particularly high. The regulations therefore state that, when calculating a team's spending, the salary of these "existing" players is capped at one-fifth of the league-wide threshold, or at their actual salary if it is lower.

Therefore, if the overall threshold is set at €1.65 million, as it is for 2027, the salary of a player benefiting from this exception would count for a maximum of €330,000, or one-fifth of €1.65 million. As the new threshold is taken into effect since September 16th, Movistar KOI’s recent re-signing of star midlaner Joseph Joon "" Pyun does put him under the new SFR Threshold reduction. However, with jungler Javier "Elyoya" Prades Batalla and support Álvaro "Alvaro" Fernández del Amo, both still under contract with the Spanish organization, this softens the limits of the organization. Indeed, players signed with an organization since the LEC Season Finals of 2023 benefit from a “Legacy player” status.

Beyond the adjustment to the amounts, version 1.3 of the regulations introduces a significant tightening of accounting rules aimed at further controlling organizations' spending. From now on, any termination payment, financial settlement, or amount paid to release a player early, aka “Termination Payments” will be fully counted toward the current season's payroll, preventing organizations from circumventing the cap through undeclared buyouts.

To counter disguised arrangements, the league now has the authority to reclassify each payment based on its actual economic substance, formally including leadership or conduct bonuses, and requires organizations to submit a detailed, line-by-line financial statement, with disciplinary sanctions for non-compliance. Finally, the LEC management is increasing its institutional flexibility by reducing the notice period required to modify the reference floor (Baseline Threshold) from three seasons to two.

While the LEC is facing its first major change and China's LPL is maintaining strict controls on excessive investments, the South Korean league, the LCK, has approved a strategic overhaul of its Sporting Financial Regulations for 2027. While the spending cap remains set at 4 billion won, approximately $2.8 million, the league is significantly tightening its exemption criteria to curb the dominance of "super-teams." Lifetime merit-based reductions and loyalty bonuses are being replaced by a new "six-point rule" based on titles won over the previous three years, now limited to a maximum of two players per organization.

At the same time, the luxury tax is being structured into four progressive tiers, reaching a rate of 60% for spending exceeding 250% of the cap. Combined with a grandfathering clause protecting contracts signed before July 19, 2026, this regulatory tightening aims to preserve the Korean ecosystem while forcing organizations to manage their budgets much more carefully during transfer windows. A rule that will carry significant weight in the future of the Korean League of Legends league, as Arnold Hur already acknowledged on X on September 15. In his message, he stated that "this change does make things harder for us. I'm not going to pretend it doesn't, but I'm not going to use it as an excuse either. [...] The game changed and it didn't change in our favor, so now we go figure out how to win under it."

In a report published last January, Sheep Esports, for example, covered the XXL salary signed by star jungler Kacper "Inspired" Słoma with LYON, the highest salary in the North American league, which does not have a salary cap of any kind. According to figures obtained by our reporters, his salary "is estimated to exceed $500,000 per year and could rise significantly with bonuses." Beyond this figure, the report also highlighted how the region had no longer offered the exorbitant salaries seen in previous years, with average salaries falling below the €240,000 offered by the LEC in 2025. However, and still, according to information obtained by Sheep Esports, it was Rasmus "Caps" Borregaard who reportedly had the highest salary in the West, including the LEC and LCS, excluding Inspired's bonuses.

While Sheep Esports cannot determine exactly which teams will be affected by this change, only the league’s top three teams, G2 Esports, Karmine Corp, and Movistar KOI, are currently nearing or exceeding the new SFR threshold. These teams are also the league’s highest spenders, and this assessment does not account for exemptions such as legacy players.