EXO members Chen, Baekhyun, and Xiumin have filed for contract termination with SM Entertainment, saying through a legal rep that they tried to settle the money owed to them multiple times, also claiming their contracts are unjustly long.
Previously, the artists sent certifications of contents to SM seven times through their legal representative from March 21 until recently, and through this, they repeatedly requested copies of transparent settlement reports and settlement grounds.
In addition, after SM signed long-term contracts with the artists that span over 12 to 13 years in the past, they pushed for the artists to sign subsequent exclusive contracts once again, resulting in long-term contracts that span over at least 17 to 18 years or more. SM has been repeatedly committing unjust use of power such as this.
Regarding this, the artists feel that SM is using their superior position to force artists to sign so-called slave contracts that span over almost 20 years including their training periods, which are also far from being short. The artists would like to convey the various injustices that they have not been able to speak of through the statement below.
They then go into specifics, which you can read in full here, but I will try to summarize.
It starts out by restating that the lack of providing a settlement has been a problem, as until now they had trusted SME that the finances were correct. However, SME has failed to provide the reports to the members, which they say is grounds for termination. They mention that if Chen, Baekhyun, Xiumin are unable to get their reports, then the same may apply for other artists under the company as well.
They state their exclusive contracts were actually from 12 to 13 years, with the key part being that they claim in addition to a seven-year contract there’s also an additional three-year contract if they do overseas stuff, so effectively a guaranteed 10-year deal from the start (plus military service).
Moreover, SM made the artists sign exclusive contracts for seven years based on their debut date and an extension of additional three years in the case [they do] overseas activities. However, in the case of K-pop artists, it takes at least a few months and up to several years to debut after signing an exclusive contract, and overseas activities are presupposed. Furthermore, even though Xiumin and Chen are the members who [SM] planned from the start to be active in China, they were forced from the beginning to sign long-term contracts which span over 10 years or more from the date of their exclusive contracts.
The lawyers cite precedent with TVXQ repeatedly, and again state that this could apply to other artists under the company as well. The members also apologize for causing concern with fans.
We have detected an external influence taking advantage of the time when we were focusing our abilities to prepare to take a new leap by approaching our artists with false information and delivering wrong legal assessment, making unconventional proposals such as persuading them that it is okay to ignore their exclusive contracts with us and to sign contracts with them. Even though they don’t sincerely care about the artists at all, the external influence is committing illegal acts by using false rumors, slander, and flattery to lure artists into making misjudgments, violating their exclusive contracts, and signing additional contracts [that would breach the exclusivity of the pre-existing contract].
We confirmed that the external force did not only stop at luring our agency’s artists into violating their valid exclusive contracts with us, but they also lured other artists from our company to violate their exclusive contracts or to sign additional contracts through the relevant artists.
These attempts by the external force are clearly illegal, encouraging conflicts between our company and artists as well as between the artists while also having a hidden agenda of wanting to collapse the existing team. This attempt cannot be tolerated as it fundamentally destroys the trust of fans who send infinite love and support, and it is an illegal act that cannot be excused for the sound future of the entire K-pop industry.
Therefore, we will not stand idle to the movements of those who only pursue monetary greed and do not pay any attention in the slightest to essential details such as the future of our artists or their legitimate legal rights, and we will take all legal action possible. This is because if we do not do that, the reputation and image of our artists could be severely damaged by the actions of those who are only taking care of their own interests as well as have a negative impact on the future of promising artists.
This is obviously just getting underway so we don’t have many details at the moment.
That said, it’s hard to really take SME’s word on literally anything regarding contracts for their artists given their history, and the statement they made is almost comically dramatic, making it seem like they are a cult preaching that Satan is trying to influence their kids or something.
It’s been confirmed that BPM Entertainment, home to VIVIZ and others, is the accused outside force. They are alleged to have done this through MC Mong somehow. SME has confirmed sending them a certification of contents to prove they approached the trio trying to sign them away.
BPME has responded with a denial and threatening legal action of their own.
Hello, this is Big Planet Made Entertainment. We would like to inform you that the information reported regarding our agency today (June 1) is not true.
First, Big Planet Made Entertainment has never met with the artists mentioned in the report and has never discussed or shared opinions regarding any exclusive contracts.
Second, MC Mong (Shin Dong Hyun) is currently not an executive director of our agency, and he is not given any position or title [in the company] nor is he involved in management at all.
Third, we confirm that our agency recently received a certification of contents from SM in the name of their CEO, and we express regret at their intention to link their own internal contract situation with our unrelated agency. If they continue to insist as such, we will take strong legal action.
In response to the detailed claims against them by EXO-CBX’s side, SME issued a detailed rebuttal, the gist of which is basically that they have a system where artists can find the settlements any time they want and that their attitude only changed after they heard about outside forces meddling.
First of all, EXO is an artist we cherish greatly. As a result, we increased the artists’ settlement rates twice even during periods when their existing exclusive contracts were valid. We have been carrying out their payments for several years with a system in which the artists can check the basis for settlements at any time, and they have not brought up any issues with this process over the years. Even when discussing new contracts with the artists when their existing contracts were expiring, the three artists Byun Baek Hyun, Kim Jong Dae, and Kim Min Seok all signed new valid exclusive contracts after carrying out mutually level negotiations, and there were no issues with the settlement aspects in that process either.
However, the artists’ legal representative suddenly started to claim that their newly signed exclusive contracts cannot be accepted, and we began to hear that there is an external force that is influencing the artists. We were very taken aback, but we worked to sign an agreement in order to fully respect the opinions of our valuable artists, but we requested the guarantee of not signing additional contracts that would breach their exclusive contracts. Then the artists’ legal representative, who initially requested that we sign an agreement, changed their attitude, ending negotiations for the agreement and unilaterally notifying us of their contract termination without any explanation of whether there are dual contracts.
Summing up the rest, SME claim the EXO-CBX members were paid every month and settlements are available whenever, but importantly they said they cannot provide copies of the settlements for external parties for security reasons.
They also claim the contracts follow all regulations and were not coerced, but rather signed in front of lawyers. They cite Tao‘s contract case as evidence that their new contracts are valid. Then they go onto mention members of other groups with SME who have left the company of their own free will.
Until the next episode of As SM Entertainment Turns.