News SM makes YouTube video about Hybe’s attempted takeover (2 Viewers)

[lexus]

 

[ichigohon]

This is getting fucking wild.

 

[uarmyhope]

a video??? 💀

 

[Wingfrost]

Oh boy this is getting intense

 

[Xeulgi]

sigh I have so much I can say about this but I won’t…💀

 

[GOJOSWIFE]

HELLO?! LMAO THE SHOCK WHEN I SAW THE TITLE

 

[Selfmate]

They fight and bite and fight,
Fight fight fight, bite bite bite,
The SM & LSM Show!

 

[Dreamer_of_Songs]

and the drama continues.

 

[dnb]

I am looking forward to the Performance video and the Behind the Scenes video.

 

[ichigohon]

Okay, I have a few thoughts after watching this video.

This confirms what I've thought about HYBE the entire time: they want to eat the entire K-Pop market. Nearly the entirety of SM executives and artists seem to be against this deal although very few outside the top levels of leadership seem to want to speak openly about their opinions on this deal.

I see this going one of two ways:

Good: The Korean FTC rejects HYBE's proposal to acquire more shares of SM Entertainment and they remain the largest shareholder at under 15%. Fundamentally nothing would change much in this timeline and I hope

Very Bad: The Korean FTC approves HYBE's proposal to acquire more shares of SM Entertainment. If this happens expect all hell to break loose even more than we have already seen. I expect that if this were to happen a substantial portion of SM's artists would file for contract termination and a large portion of SM employees will resign from the company. As a result the stock prices of HYBE and SM would tank and this would likely create an extreme strain the financial position of SM and HYBE and could possibly lead to HYBE's bankruptcy. I suspect that the contract terminations would be approved by the courts and former high level and mid level employees would establish several new labels to sign and manage the artists that would have left SM. I sincerely hope that this does not happen, but if this scenario happens and HYBE would declare bankruptcy their sub-labels would likely be sold off as part of a restructuring process leading to them becoming independent again or being acquired by another company(ies).

Those are just my thoughts about this. I really hope the Korean FTC sees a problem in a single corporate entity becoming too big too fail in K-Pop. There is no reason that a single corporation should control that much of any market. If they do acquire more shares even with my theory coming true this shouldn't impact artists from outside of HYBE or SM in any meaningful manner nor does it create a risk of the entire Korean music industry going belly up, so I wouldn't worry too much even if my worse case scenario comes true.

Spoiler

Don't read too much into this as I do not know enough about Korean law nor have I worked for a K-Pop industry so just take this as my limited knowledge or coprorate structure projected onto this situation

 

[VillageIdiot]

THEY USED THE TWITTER ACCOUNT LMAOOOOOOOOOOOLOLOLOLO

 

[PloryWinxyMYBlnk]

Why are they revealing this to the public, though? That's what I'm confused about.

So, Hybe is basically somewhat like EA of KPOP industry now -- take over or buy out a competitor company. :::: sigh ::::

 

[cocomelon]

THIS IS THEIR VERSION OF BYE SISTERS

 

[cocomelon]

idk but if sm’s music quality shifts even a little i’ll cry

 

[litc]

idk but if sm’s music quality shifts even a little i’ll cry

don't you like hybe production for txt, le sserafim and newjeans

 

[Abeamus]

Why are they revealing this to the public, though? That's what I'm confused about.

So, Hybe is basically somewhat like EA of KPOP industry now -- take over or buy out a competitor company. :::: sigh ::::

I assume it's to directly damage Hybes image since Hybe basically built their company on them being good and the Big 3 at the time being evil so now the tables have turned and SM is saying Hybe is the evil one in this situation even calling out one of Hybe stans biggest defenses being "the subsidaries are independent" flat out saying that's a lie.

 

[Abeamus]

Okay, I have a few thoughts after watching this video.

This confirms what I've thought about HYBE the entire time: they want to eat the entire K-Pop market. Nearly the entirety of SM executives and artists seem to be against this deal although very few outside the top levels of leadership seem to want to speak openly about their opinions on this deal.

I see this going one of two ways:

Good: The Korean FTC rejects HYBE's proposal to acquire more shares of SM Entertainment and they remain the largest shareholder at under 15%. Fundamentally nothing would change much in this timeline and I hope

Very Bad: The Korean FTC approves HYBE's proposal to acquire more shares of SM Entertainment. If this happens expect all hell to break loose even more than we have already seen. I expect that if this were to happen a substantial portion of SM's artists would file for contract termination and a large portion of SM employees will resign from the company. As a result the stock prices of HYBE and SM would tank and this would likely create an extreme strain the financial position of SM and HYBE and could possibly lead to HYBE's bankruptcy. I suspect that the contract terminations would be approved by the courts and former high level and mid level employees would establish several new labels to sign and manage the artists that would have left SM. I sincerely hope that this does not happen, but if this scenario happens and HYBE would declare bankruptcy their sub-labels would likely be sold off as part of a restructuring process leading to them becoming independent again or being acquired by another company(ies).

Those are just my thoughts about this. I really hope the Korean FTC sees a problem in a single corporate entity becoming too big too fail in K-Pop. There is no reason that a single corporation should control that much of any market. If they do acquire more shares even with my theory coming true this shouldn't impact artists from outside of HYBE or SM in any meaningful manner nor does it create a risk of the entire Korean music industry going belly up, so I wouldn't worry too much even if my worse case scenario comes true.

Spoiler

Don't read too much into this as I do not know enough about Korean law nor have I worked for a K-Pop industry so just take this as my limited knowledge or coprorate structure projected onto this situation

I can definitely see people leaving SM if Hybes purchase goes through as that's what happened with Source Music when they announced Gfriend was leaving since only Gfriend and top people in Source Music knew about it and when other employees found out some of them left Source Music all together.

 

[the101]

I mean this is what they should have released in the first place instead of letting Chris Lee pop off with conspiracy theories. This was well thought out and well explained. It's very very interesting to me that the Powerpoint is in English and not Korean and is speaking to the larger global audience. (This poor person who had to jam to do the research and put together this deck while watching Chris Lee get up there and say dumb shit. )

Again it's interesting that less than half of employees voted in the survey they're touting. It will be interesting to see the earnings announcements - revenue and profits have been up and I doubt that's changed, despite all the shenanigans this year.

I do feel like there's something unspoken here that we're not seeing in the way SM is fighting so hard against this.

I expect that if this were to happen a substantial portion of SM's artists would file for contract termination and a large portion of SM employees will resign from the company. As a result the stock prices of HYBE and SM would tank and this would likely create an extreme strain the financial position of SM and HYBE and could possibly lead to HYBE's bankruptcy. I suspect that the contract terminations would be approved by the courts and former high level and mid level employees would establish several new labels to sign and manage the artists that would have left SM. I sincerely hope that this does not happen, but if this scenario happens and HYBE would declare bankruptcy their sub-labels would likely be sold off as part of a restructuring process leading to them becoming independent again or being acquired by another company(ies).

But where would they go tho - this is the same thing I've been stuck on in the fandom (EXO-Ls) when many are focused on EXO leaving SM with the contracts up. BUT WHERE WOULD THEY GO? The only other big companies are Hybe, which everyone is avoiding, YG, JYP and a Kakao subsidiary like Starship.

NCT and aespa have the best chance of landing somewhere big as they are currently trendy, very profitable (although NCT has its own challenges - 127 and Dream contracts are up this year but WayV is not - would a new label take the whole package?) and - from the company's perspective - young, although 127 is beginning enlistments there are multiple viable options for soloists. EXO and RV are big, significant, successful brands but I still can't see the biggest labels making a play for them when they have existing younger groups who outsell them. (I hate to say that about EXO but SKZ has outsold their last releases. And yes, I know DFTF was a fan gift, but sales there were hard-carried by international fans. Kerries and Cherries are going to need to step up on the next EXO album.) That's not even counting the second gen groups altho Taeyeon would be appealing as one of the top female soloists. When you combine all of SM, it's a very impressive roster of artists, but if you start breaking them apart, I think it becomes more challenging. There are certainly many mid-tier or up and coming labels that will be interested and artists will have to decide where they want to go, understanding promotions and budgets may be very different (altho tbf, that XG Shooting Star MV looks expensive so maybe you're not trading down that much..) That said, I know EXO may also have an edge with CF opportunities, which might also make them extra appealing to labels but I can't see one of the big 3 going in..

 

[velvet]

This isn't the way to fight Hybe's attempt of a takeover but I do believe what Hybe is doing is wrong here. As what @wagamama said above and in my basic understanding of economics, what Hybe is doing is attempting to make a monolopy, which overall will be bad for the K-pop industry as it will stifle creativity and innovation in K-pop's concepts and sounds. Though they won't create such a monolopy if they acquire SM, it'll definitely be a start and a bad sign for the industry as it'll be harder for small companies and groups to achieve success. I hope the deal doesn't go through.

 

[ichigohon]

But where would they go tho - this is the same thing I've been stuck on in the fandom (EXO-Ls) when many are focused on EXO leaving SM with the contracts up. BUT WHERE WOULD THEY GO? The only other big companies are Hybe, which everyone is avoiding, YG, JYP and a Kakao subsidiary like Starship.

NCT and aespa have the best chance of landing somewhere big as they are currently trendy, very profitable (although NCT has its own challenges - 127 and Dream contracts are up this year but WayV is not - would a new label take the whole package?) and - from the company's perspective - young, although 127 is beginning enlistments there are multiple viable options for soloists. EXO and RV are big, significant, successful brands but I still can't see the biggest labels making a play for them when they have existing younger groups who outsell them. (I hate to say that about EXO but SKZ has outsold their last releases. And yes, I know DFTF was a fan gift, but sales there were hard-carried by international fans. Kerries and Cherries are going to need to step up on the next EXO album.) That's not even counting the second gen groups altho Taeyeon would be appealing as one of the top female soloists. When you combine all of SM, it's a very impressive roster of artists, but if you start breaking them apart, I think it becomes more challenging. There are certainly many mid-tier or up and coming labels that will be interested and artists will have to decide where they want to go, understanding promotions and budgets may be very different (altho tbf, that XG Shooting Star MV looks expensive so maybe you're not trading down that much..) That said, I know EXO may also have an edge with CF opportunities, which might also make them extra appealing to labels but I can't see one of the big 3 going in..

I think it would be just an absolute shitshow if the HYBE's acquisition was approved, so I have no idea how or which artists would plan on leaving at all. A group like EXO could likely set up their own record label with their management if they leave. I HIGHLY doubt any of the major companies would sign any, but I could see Taeyeon go to ABYSS, EXO starting their own label (like I said previously), SHINee I think would jump to a smaller label personally, and I have no clue as to what would happen with the rest.

I'm in full agreement with your overall point though that broken up SM artists become less impressive, but they would still bring a lot of much needed money into smaller labels that would be able to manage them effectively. Their fans will stay with them regardless of what would happen but I think this scenario would be WAYYY more messy than any of us could imagine for HYBE and SM. If the deal is opposed by the vast majority of employees across the corporate ladder alongside artists and HYBE is going to take out a loan to buy SM that just seems like an example of a poor financial decision. I don't see any scenario in which a wave of resignations and artists filing for contract termination if the additional acquisition of shares is approved.