Three members of the nine-member group EXO have reportedly announced that they plan to end what they say are “unfair long-term contracts” with K-Pop agency SM Entertainment.
In a statement released by Lin Law Firm on Thursday (June 1), EXO members Baekhyun, Xiumin and Chen – whose full names are Byun Baekhyun, Kim Minseok and Kim Jongdae respectively) alleged that they were coerced into also under “slave contracts” for 20 years and lost faith in SM Entertainment after the company refused repeated requests for a detailed breakdown of its payments to artists.
The trio also said that “legal action is inevitable” following the announcement of the termination of their contracts.
SM Entertainment fired back with its own statement, saying it had received “information” suggesting that a rival company was trying to sow discord within the company and poach EXO artists for itself, potentially forcing them to sign an agreement in violation of the exclusive agreement they have with SM.
The K-pop giant has defended its lengthy contracts with EXO members, saying those contracts were indeed approved by Korea’s Supreme Court in prior litigation, and that EXO members had recently signed an extension of these contracts while being represented by “large scale law firms”. .”
The company also said that EXO artists have always had access to detailed breakdowns of their payouts, but that it will not distribute copies of these breakdowns to artists because they may be “unfairly provided to a third party.”
In the statement on behalf of the three EXO artists – released by Korean news site Newsen And translated on Soompi.com – Lawyer Lee Jae Hak said that Baekhyun, Xiumin, and Chen originally signed 12 or 13-year contracts with SM Entertainment when EXO was created around 2012, which is “far beyond the set seven years by the Fair Trade Commission for the standard exclusive contract for artists.
SM then “pushed artists to re-sign subsequent exclusive contracts, resulting in long-term contracts that span at least 17 to 18 years or more,” the letter states.
The letter also said that EXO members had attempted seven times since March to obtain “settlement reports” – a detailed breakdown of the company’s payments to artists – and had been rebuffed.
“If SM had properly paid the settlement to the artists, there would have been no reason why they could not provide the settlement reports and the basis of settlement,” the letter states.
The letter argued that EXO members’ contracts should be invalidated on the grounds that there is an imbalance in bargaining power between SM Entertainment and the artists.
He cited a legal precedent involving another K-pop group, a 2009 lawsuit in which three of the original five members of TVXQ sued SM Entertainment to be released from their contracts.
In that case, a court tentatively ruled that the long terms of the contract “unreasonably infringe the plaintiffs’ economic freedom and fundamental rights,” the letter says.
In a subsequent ruling, “it was determined by the court that the subsequent contracts are unfairly signed contracts with defects due to difference in bargaining power,” the letter said.
(In the case of TVXQ, all three members left the group, and since around 2010, TVXQ has continued as a duo.)
“External forces” at work?
However, in its own statement, SM Entertainment cited a different legal precedent – that of Hwang Zitao, a former EXO member who sued SM Entertainment in 2015, arguing that his 10-year contract contained unfair terms and that his term amounted to a restriction. about his freedoms.
In 2018, the Supreme Court rejected Hwang’s appeal against a lower court ruling and declared his contract valid for its full term until 2022.
Despite the court victory in this case, “we…have signed two side agreements with EXO members, including the artists in question, to change salary rates in favor of the artist,” SM Entertainment said in its statement, as posted on Koreaboo.com.
“This is a step we took to foster the joint growth of our business and our artist, even though there was no contractual obligation (on our side).”
SM Entertainment said that the lawyer representing the three EXO artists only recently came into the picture, “and we started to receive reports that there were outside forces that were causing our artists to waver.”
SM said they asked EXO artists to “reassure us that they have not signed any double contracts that would violate our exclusive contract. Then, the legal representative of the artists (…) suddenly changed their attitude and interrupted the discussions (…) and informed us that they would terminate their exclusive contract with us without any explanation regarding the (potential) double contract.
A report to Korean newspaper JoongAng Daily cited a “media report” stating that rival K-pop agency Big Planet Made, or BPM Entertainment, received a notification from SM Entertainment alleging that a company representative “met with the three EXO members and tried to convince them to join the company.”
BPM reportedly denied any involvement in the case.
“It is true that we have received a letter from SM, but we are very sorry that (SM Entertainment) involved us when we have no part in their internal situation. If they pursue their claim, we will take legal action. farms,” BPM said, as quoted by JoongAng.
The dispute marks another drama for SM Entertainment, which earlier this year was at the center of a standoff between Korean telecommunications and media giant Kakao and rival K-pop agency HYBE for control of SM.
Kakao ultimately emerged victorious from this battle, with a 39.9% stake in SM Entertainment.
However, in April, South Korea’s financial regulator raided the offices of SM Entertainment as part of an ongoing investigation into Kakao, whom the regulator suspects of manipulating SM Entertainment’s share price. during his struggle for control of society.
SM Entertainment is the second largest K-pop agency by revenue, behind rival HYBE. Besides EXO and TVXQ, he represents groups such as Girls’ Generation, Super Junior, aespa and Kangta.The music industry around the world