How the LCK spending cap works: limits, discounts and luxury tax

Every offseason, the same question follows the biggest contracts in South Korean League of Legends: how much room does a team have left under the cap? The LCK, the country's top professional league, does have a spending rule, and it shapes how teams build their rosters. But it is not a cap in the sense most sports fans know. Nothing forbids a team from paying a player whatever it likes, or from spending past the line. What the rule does is count part of the payroll, compare it with a limit, and charge a tax on what goes over.

The league calls it the Balanced Spending System. In English it also goes by SFR, for Sporting Financial Regulations, the name Riot Games, the game's publisher, uses for the same kind of rule in Europe. This guide explains what the system measures, how the upper limit and the floor work, who qualifies for a reduction, how the luxury tax is structured, how the rules have changed from their launch in 2023 to the rulebook update of September 2026, and how the LCK's version differs from the European one.

LCK office announcement of July 19, 2023, and the rulebook terms in force from September 18, 2026, as reported by Sheep Esports on September 10, 2026.

Why the LCK introduced it

The LCK office announced the system on July 19, 2023, on the LoL Esports site, the publisher's news hub for its leagues. Its reasoning was about money. The league wrote that the average combined pay of each team's five highest earners had risen by 71% in two years, and that teams were spending most of their operating budgets on player salaries.

The league presented the rule as a way to support its own sustainable growth. It was set to apply from the stove league of 2023, the Korean name for the offseason, when contracts expire and teams rebuild.

The system was not written by the league office alone. Its exceptions, the LCK said, drew on opinions raised at a meeting in April 2023 between the league office and the representative players of each team in the league's player division. That origin matters for what follows: the reductions for long-serving and decorated players, which became the most debated part of the system, were among those exceptions.

What the system counts

The measure is narrow on purpose. The LCK counts the total pay of each team's five highest-paid players, and only those five. The rest of the roster, substitutes and academy players included, does not enter the calculation. There is no limit on what any one player may earn.

Some pay is left out even for the top five. The 2023 announcement says that salary increases obtained through development rights and through the designated player special negotiation system are fully excluded. Both are mechanisms of the league's own rules, and development rights have an appendix of their own in the rulebook. A raise that comes through either route does not count against the team.

Sheep Esports, the esports news outlet, notes that the rulebook in force from September 2026 also exempts certain portions of salary from the calculation. Everything else in the system works on the total that remains: the five largest salaries, with these exclusions and the reductions described below.

The upper limit and the floor

The system has two lines. The upper line, which the league calls the spending upper limit, is the one that triggers the tax. The LCK said in 2023 that it is set from the recent revenue of the league's ten teams, and that it is recalculated every two years. The limit therefore follows what the league earns rather than a fixed figure written once.

The lower line is a recommended floor. The league placed it at about 70% of the revenue the LCK distributed to each team, on the 2022 figures. A team is not fined for spending under it. The floor works through the tax money instead: a team below it is left out when the tax collected is shared.

Between the two lines sits the zone the system rewards. A team there pays nothing and receives its share of whatever the teams above the limit pay. The league put the logic of this in plain terms in 2023: it does not regulate the teams above the limit directly, and redistributes what they pay over it to the teams inside the range.

How the luxury tax is charged

The tax is progressive. The 2023 announcement said only that a tax by bracket applies when a team spends above the upper limit, and that the money goes in equal shares to the teams that keep their player pay between the floor and the limit. Sheep Esports describes the tax in the same terms: a financial penalty on teams whose total player spending passes a threshold the league defines.

The structure was rebuilt in 2026. According to Sheep Esports' reading of the rulebook that took effect on September 18, 2026, the tax now has four brackets instead of two. The outlet gives the top of the scale: a rate of 60% on the part of a team's spending above 250% of the upper limit. A team would have to spend two and a half times the limit before that rate applies.

The new scale comes with a cushion. Sheep Esports reports that a transitional buffer adjusts the increase in tax in proportion to the share of a team's spending tied to contracts that already existed. A team whose payroll is mostly made of older deals feels the new scale less than one that signs its players afresh. The league's own notice of September 8 describes this part in one line: the plan for operating the change of tax brackets has been updated.

The discounts of 2023

From the start, the system let a team count some players at less than their real pay. The 2023 announcement set two reductions.

The first rewarded titles. A player with five or more LCK split titles, or three or more international titles such as the Mid-Season Invitational or the World Championship, counted for 50% of his salary. A split is one of the two parts into which the league's year was divided before 2025. The second rewarded loyalty: a player who had spent three or more years with the same team, whatever his trophies, earned a 30% reduction in the calculation.

The two could be combined. The league wrote that a player with three or more years at one team who had also won domestic or international titles would count for only about 30 to 40% of his actual pay. Applying both rates in turn, half of the salary and then 70% of that half, gives 35%, which sits in that range.

The launch also protected contracts already signed. A player whose contract with his team ran beyond 2023, as submitted in the integrated roster of the 2023 LCK Spring season, was classed as an existing contract player. Until that contract ended, the salary the system counted for him was one fifth of the upper limit, whatever he was actually paid.

The six-point test of 2026

The rulebook update the LCK announced on September 8, 2026, ahead of the stove league, replaced both reductions. The notice itself states the principle: the discount for high-achieving players is now judged on results over the past three years, and it applies to two players per team at most. The figures sit in the rulebook, revised on August 19 and in force from September 18, which Sheep Esports set out on September 10.

According to the outlet, a player now needs at least six points earned in the three years before the date on which the calculation starts. Domestic and international titles add up together. A player who qualifies counts for 50% of his salary, as before. The old terms are gone: the career scale that made a decorated player permanently eligible, with minimums to reach in domestic and international play at the same time, and the loyalty rule that counted a player with three consecutive seasons at one organization at 70%.

Only titles earn points, and each competition has its own value.

The two values for an LCK title follow the league's calendar. A title won before January 1, 2025, when the league was played in two splits a year, is worth 1.5 points; a season title from 2025 onward, under the single-season format, is worth 2. The Mid-Season Invitational, MSI for short, is one of the international titles the LCK named in 2023.

A worked example, with illustrative results, shows where the bar sits. A player who won an LCK split in 2024, the LCK season in 2025 and an MSI inside the window has 1.5 plus 2 plus 2, or 5.5 points: not enough. Two MSI titles, one LCK Cup and one First Stand give 2 plus 2 plus 1 plus 1, exactly six. No single title qualifies a player, and a title stops counting once it falls out of the three-year window.

Contracts signed before the change

A rule change in the middle of long contracts raises the obvious question of the deals already signed. The 2026 rulebook answers it with a transition clause, which Sheep Esports reports: a player who met the former criteria and whose contract was signed before July 19, 2026 keeps his 50% reduction until that contract ends. A team with more than two such players keeps the reduction for all of them while those deals run, even though the new limit is two.

The outlet names four players who hold that legacy status: Faker, Chovy, Canyon and Ruler. It adds that Canyon's contract expires this year, so a renewal would be assessed under the six-point test.

The way the system has treated older contracts thus follows the same idea at each change, in two different forms. In 2023, an existing contract was counted at a fixed share of the limit until it ended. In 2026, an existing discount is kept until the contract ends, and the new tax scale is softened in proportion to the older deals on the books.

The contract rules around it

The spending system sits on top of the LCK's ordinary contract rules, which are in the main body of the same rulebook. Several of them decide what pay exists to be counted.

The rulebook sets a minimum salary. A team must pay at least 60 million South Korean won a year before tax, in cash, to at least five players registered at the first integrated roster submission, the LCK minimum. Its other players must receive at least the LCK CL minimum of 20 million won before tax; the LCK CL is the Challengers League, which the rulebook places at the semi-pro level, below the professional LCK. A team must also pay each player at least one twelfth of his annual salary every month of the contract.

Every contract must state the specific annual salary paid to the player each year, or, when that cannot be done, at least the minimum annual salary for each season. A team must report a contract's end date to the league office within seven days of signing, and submit the contract summary and the contract itself by the roster deadline. The rulebook also requires every player contract to carry a confidentiality exception that allows the contract and its full content to be disclosed to the league office.

The length of a deal is capped. A player's contract may not run longer than four seasons. League of Legends esports has a global official contract end date, which the rulebook defines as 23:59 UTC on the third Monday of November; in 2026 that falls on November 16. The September update loosened this calendar: under Articles 1.4.2 and 2.9.7, player and coaching staff contracts may now end on another date, but a multi-year contract that runs past a global end date must still be written to end on one. Sheep Esports reports that the rule requiring short-term deals to run from the start of the LCK Cup to the global end date was removed.

How the teams have responded

The 2026 update drew a public reaction from the league's reigning champions. On September 15, two days after Gen.G won the LCK Finals, the team's chief executive, Arnold, wrote on X about the revised rules, Sheep Esports reported. He said Gen.G had no vote and no veto on the regulations, that the change made things harder for the organization, and that he would not use it as an excuse. He added that the team would now work out how to win under the new system.

Sheep Esports noted that two of Gen.G's players, Chovy and Ruler, already qualify for the exemption, and that the contracts of two others expire this year.

How Europe's version differs

Riot Games built a rule of the same family for the LEC, the top league of Europe, the Middle East and Africa, announced on September 28, 2023, for the 2024 season. The two systems share their core: both count the pay of a team's five highest-paid players, and both charge a team that spends above the line. The details differ at almost every step.

The LEC's floor is set at 50% of its threshold, while the LCK's was placed at about 70% of the revenue distributed to each team. The LEC's fee is 50% of the excess over the threshold and 100% of the excess above 150% of it. The LEC splits its fee money in two: half goes to the LEC teams that respect both the floor and the threshold, half to support the tier-two scene of the region. The LCK shares its tax equally among the teams between its two lines.

The older-contract rules are close cousins. For a player signed during or before the end of the 2023 LEC Season Finals, the LEC reduced the team's counted spend by one fifth of the threshold, or by the player's actual salary if that was lower. The LCK, in the same year, counted an existing contract at one fifth of its limit. Neither rule is carried from one league to the other: each league publishes its own text and its own figures.

The calendar from here

The revised LCK rulebook has applied since September 18, 2026. The contracts written to the global end date expire on November 16, the date the rulebook sets for 2026 as the global end of contracts.

Before that comes the World Championship, which Riot Games has scheduled from October 15 to November 14, 2026. It is the title the new scale values most, at three points, half of what a player needs to qualify. Under the 2023 announcement, the upper limit that the tax brackets are measured against is recalculated every two years from the league's revenue.

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