LCK reportedly introducing salary cap amid financial struggles

According to a report from Inven, the LCK is considering adding a ‘salary cap’ to the league. As confirmed by multiple esports officials, both the organizers as well as all 10 teams seem to have agreed on the decision, following continuous discussions.

The salary cap was already a hot topic at the end of 2021 when multiple LCK teams were hoping to see it implemented. That said, T1, the most successful team in the league, was strongly against it.

In the past, there were multiple concerns about the salary cap, especially the fact that it could lead to an overall decline in the competitiveness of the league caused by talented players leaving the region for better economic conditions.

However, it looks like opinions on the matter have changed, as there is a plan to lower excessive salary inflation to guarantee long-term sustainability for the organizations.

Even T1, a team with one of the largest fan bases in Korea and worldwide, is also operating at a loss. According to Inven, SK Telecom CST1 reported an operating loss of about 166 billion won (approximately 140 million USD) in its latest consolidated audit released in April.

Last year, Gen.G’s CEO Arnold Hur made some important comments on the esports economic landscape, with multiple signs pointing at an “esports winter”. The salary cap implementation might be one of the countermeasures used to improve teams’ long-term sustainability, which is going to be a crucial factor for the industry going forward.

“If the salary cap is introduced, there is a possibility that an annual salary disclosure will follow,” said an LCK official to Inven. Introducing a salary cap to the league will also indirectly disclose players’ annual salaries, guaranteeing more transparent operations.

The LCK isn’t the first region to consider a salary cap model, as China’s LPL has implemented a salary cap since 2021. While there were soft caps to help make the transition easier for teams, stricter regulations have been enforced this year, using three different tiers to classify players and give each one of them a limit on their compensation.

According to Inven’s report, however, the LCK hasn’t confirmed whether the salary cap is going to be introduced: “We are constantly discussing various plans with the teams for the sustainable growth of the LCK, but there is nothing we can confirm at this point.”