News EXO's Baekhyun, Xiumin and Chen have ended their exclusive contracts with SM Entertainment (1 Viewer)

[Myth]

EXO’s Baekhyun, Xiumin, and Chen have notified SM Entertainment regarding the termination of their exclusive contracts.

Baekhyun, Xiumin, and Chen delivered their official statement on June 1 through their legal representative and lawyer Lee Jae Hak from law firm LIN, announcing that they informed SM regarding the termination of their existing exclusive contracts as of June 1.

Read the full statement below:

This is lawyer Lee Jae Hak of the law firm LIN, representing EXO members Baekhyun, Xiumin, and Chen (Byun Baek Hyun, Kim Min Seok, Kim Jong Dae, hereafter “artists”). Hereinafter, our legal representative would like to express the position of the artists regarding the exclusive contracts between the artists and SM Entertainment (hereafter “SM”).
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.
It is the bare minimum and legitimate right of the artists to request accurate and transparent basis for settlements that have not been clear until now, and SM is also obliged to comply in accordance with the exclusive contracts and the Popular Culture and Arts Industry Development Act. However, SM eventually maintained an unjust position stating that they cannot provide copies of the reports.
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.
1. The artists’ positions regarding their activities and SM’s refusal to provide settlement reports
1. The artists signed long-term exclusive contracts with SM for more than 12 to 13 years and have faithfully carried out entertainment activities as members of EXO.
2. During the period of long-term exclusive contracts mentioned above, the artists only believed SM’s explanation about the settlement amount and received their shares only by referring to the reports unilaterally made by SM, which had no specific and objective evidence. Regarding this, the artists have recently officially requested copies of the settlement reports and the basis for their settlement several times through the legal representative, but SM responded that they cannot provide copies of the reports in the end.
3. SM has an obligation to provide settlement reports and settlement basis including details of total income, details of expenses subject to deduction, and details of amount subject to deduction according to the existing exclusive contracts and the Popular Culture and Arts Industry Development Act. Moreover, since the above exclusive contracts state that the settlement cycle comes twice a year, the above settlement reports and settlement basis must also be provided twice a year. However, during those 12 to 13 years of the exclusive contract period, SM has not properly provided such settlement reports and settlement basis to the artists.
4. According to a judicial precedent, an exclusive contract is based on a high degree of trust. Thus, if the agency does not fulfill its obligation to provide settlement reports, the artists’ rights to review the settlement of profits and file an objection against the agency are not properly guaranteed, resulting in failure to provide settlement reports to be a reason for terminating the exclusive contract (refer to Seoul High Court order from 2019Na2034976 on January 31, 2020). Despite numerous requests made through the artists’ legal representative in the meantime, SM has failed to fulfill its obligation to provide reports, and as a result, grounds for termination of the existing exclusive contracts have arisen.
5. Although the artists earnestly requested that copies of the settlement reports be provided by May 31 through certifications of contents on several occasions, [SM] refused to provide the basis for their settlement, so it was inevitable that they have come to notify SM of the termination of the existing exclusive contracts as of June 1.
6. If SM had accurately paid the settlement to the artists, there would have been no reason why they could not provide the settlement reports and settlement basis. The fact that SM is unable to provide such settlement reports and settlement grounds is strong counter-evidence that SM did not properly pay the settlement to the artists. Thus, the artists plan to take all civil and criminal legal action including a lawsuit for settlement payment against SM in order to check the exact details of the settlement.
7. Furthermore, as in the case of the artists (Baekhyun, Xiumin, and Chen), if settlement reports and settlement basis have not been provided to other SM artists, this is not just a problem for Baekhyun, Xiumin, and Chen but a potential issue for all artists under SM.
8. In fact, it is very difficult for Baekhyun, Xiumin, and Chen to file a legal lawsuit against a large enterprise like SM, but they undertook it with the thought and courage that this is also for [clarifying] various doubts that many SM artists have.
2. Artists’ positions regarding the unjust long-term contracts and attempts to extend them further
1. The artists have signed exclusive contracts that are over 12 or 13 years with SM. This is far beyond the seven years determined by the Fair Trade Commission for the Standard Exclusive Contract Form for Entertainers, and it is unilaterally disadvantageous to the artists as it exceeds a reasonable limit at the very least.
2. Previously, regarding the 13-year contract period, which includes the extended period from the provisional injunction decision at TVXQ’s case, SM received the judgment that it is an excessively long-term exclusive contract that is unilateral in structure and that it is a contract that excessively infringes on the economic freedom and basic rights of the applicants (TVXQ members) by imposing excessive quid pro quo (benefit in return) or an unreasonable burden on them, exercising unfair control using their superior position. As it is a legal act that violates good moral and other social order, it was judged that there is considerable room to consider that all or part of the contents of the contract are invalid or that its validity has expired due to the expiration of the reasonable duration (refer to the Seoul Central District Court order from 2009KaHap2869 on October 27, 2009). In addition, in the case of provisional injunction in the above case, the court once again pointed out that it is very difficult for idol stars such as the applicants (TVXQ members) who have teenagers as their main fanbase to maintain their existing popularity in the same field until or after they are in their 30s. Thus the exclusive contracts with unreasonably long contract periods deprive the artists of the opportunity to acquire appropriate compensation for their exceptional talent and constant efforts they put in to succeed in the entertainment industry, and in fact, they may perform the same function as lifelong contracts (refer to the Seoul Central District Court order from 2010KaHap1245 on February 15, 2011).
3. The existing exclusive contracts have contract validity periods that severely bind personal rights for a long period of time, which is applicable to “making transactions with the other party to the transaction by unfairly taking advantage of the bargaining position of the business entity itself” from Article 45 Paragraph 1 (6) of the Monopoly Regulation And Fair Trade Act. In addition, according to the types of unfair trade practices from Table 2 of this act’s decree, enforcement of a long time period like this applies to “coercive provision of benefits” or “provision of disadvantages.”
4. 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.
5. Meanwhile, as if a 12 to 13-year-long contract period is not enough for them, SM is trying to claim a contract period of at least 17 to 18 years by having the artists sign the subsequent exclusive contracts again. This is SM repeatedly perpetrating extremely unjust use of power against their artists.
6. In the process of sealing the subsequent exclusive contracts, the artists were unable to negotiate properly, and it was difficult to reflect their wishes or set the terms of the contract on equal footing. Even in the case of the provisional disposition for TVXQ, the court determined that the applicants (TVXQ members) only passively signed a fixed exclusive contract presented by SM, and they were not involved in determining the contents of the contract through negotiations with SM. In the case that an agreement was not drawn between the applicants (TVXQ members), it should have been possible to stop existing negotiations and start negotiations with entertainment agencies other than SM, but no choices were guaranteed, and therefore, no negotiations in the true sense of the word could occur between the applicants (TVXQ members) and SM. Even if there was an annex agreement after the applicants (TVXQ members) became established as celebrities, as applicants who were already bound to the pre-existing contract, they could not link their elevated status to strengthening their negotiating power. It was determined by the court that subsequent contracts are unfairly signed contracts with defects due to the difference in bargaining power (refer to the Seoul Central District Court order from 2010KaHap1245 on February 15, 2011).
7. Furthermore, regarding the act of signing a subsequent exclusive contract, we criticize that it falls under Article 45 Paragraph 1 (6) of the Monopoly Regulation and Fair Trade Act under “making transactions with the other party to the transaction by unfairly taking advantage of the bargaining position of the business entity itself.” Compulsory long-term periods such as this using subsequent exclusive contracts applies separately to the “coercive provision of benefits” or “provision of disadvantages” of attachment 2 of Table 2 of the act’s decree.
8. Furthermore, we are aware that long-term exclusive contracts such as these are the similar cases for the majority of SM artists and not only just Baekhyun, Xiumin, and Chen.
9. Regarding the act of signing a long-term existing exclusive contract as well as a subsequent exclusive contract, Baekhyun, Xiumin, and Chen are sincerely considering filing a complaint to the Korea Fair Trade Commission.
3. Words to fans
1. We apologize for causing great concern to fans through this issue, and there is no way to fully express our apology.
2. Although legal action is inevitable due to a difference in our position with SM, we will do our best to find a wise way to resolve this dispute so that we do not cause fans too much concern.
3. As we try to speak up with our small voices regarding the unfairness we couldn’t speak of until now, we are actually very frightened and fearful of this moment right now.
4. We hope that you take interest in what we are saying as well as our difficult courage. We once again sincerely thank our fans who have supported us for a long time.

 

[Myth]

Uhhh

 

[Magician]

new statement from SM

 

[the101]

WOW.

Istg, the things that were not on my bingo card this year.

I'm not surprised that some EXO members want to go or are underpaid - am shocked that Baek is one of them as he's often seemed to be one of the pinkest of bloods. Tbf tho, he's the one that is a million seller as a soloist and has the power to counter a potential Jaejoong situation. I'm so sad they're not being paid what they deserve and as much as I'm like "aw man, my EXO cb", it's more important that these artists get paid what they should get paid and I support them.

This does open the door to a lot of the discussions all Czennies have had about other groups' contract renewals, like RV and NCT and some of the dgaf levels of all of these groups in some of the things they've said on camera.

You'd think that once the Hybe stuff went down, they would go through and handle everything instead of fumbling the bag here with these guys.
What is VERY interesting in the SM response is that 7 members resigned. Who didn't resign? 🧐

 

[seungfloral]

Lmao this gonna be messy

 

[Wingfrost]

It’s sad for the fact that it means Exo is losing 3 members, but they also deserve fair treatment so I completely support them on this, it’s not an easy thing to do. It does make me wonder about their other artists and if this will possibly be the beginning of other current artists under the company going against SM.

 

[Deleted member 4423]

Spoiler: This isn't true and probably borders on fanfiction... or is fanfiction... I don't know what the rules are around fanfiction...

This is all made up and not based on any real evidence, but I wonder if the 8th member who didn't re-sign was Chen, and it wasn't because he didn't want to, it was because SM decided not to renew with him. A way to comply with the anti's bs demands without technically removing him from the group. Because after all the other shit SM has done, nothing would really surprise me anymore if this turned out to be true.

And Xiu and Baekhyun, sick of all SM's bullshit, decided to take action alongside Chen to get what they're owed and bounce. (Maybe the other members too but they've got some contractual stuff that means they can't leave just yet. (Like Suho's musical) I don't know. Like I said this isn't true and is all made up based of of my seething annoyance at SM lol.)

(obviously there are a lot of holes in this theory so don't take it too seriously)

But it wouldn't surprise me if this turned out to be true.

 

[nekolecrimson]

 

[nekolecrimson]

WOW.

Istg, the things that were not on my bingo card this year.

I'm not surprised that some EXO members want to go or are underpaid - am shocked that Baek is one of them as he's often seemed to be one of the pinkest of bloods. Tbf tho, he's the one that is a million seller as a soloist and has the power to counter a potential Jaejoong situation. I'm so sad they're not being paid what they deserve and as much as I'm like "aw man, my EXO cb", it's more important that these artists get paid what they should get paid and I support them.

This does open the door to a lot of the discussions all Czennies have had about other groups' contract renewals, like RV and NCT and some of the dgaf levels of all of these groups in some of the things they've said on camera.

You'd think that once the Hybe stuff went down, they would go through and handle everything instead of fumbling the bag here with these guys.
What is VERY interesting in the SM response is that 7 members resigned. Who didn't resign? 🧐

Kpop and jpop are filling that list of things I didn't have on my 2023 bingo card.

 

[The_LastRomeo]

Uhhh

Yeah sure

 

[RandAlThor]

This feels like the first of the shoes to drop.

 

[Abeamus]

This feels like the first of the shoes to drop.

SM somehow ended up blaming BPM for trying to lure CBX over but well the more things change the more they stay the same I guess

 

[ani07]

I guess hybe wasnt lying when they said sm's internal management is fucked up.

 

[RandAlThor]

SM somehow ended up blaming BPM for trying to lure CBX over but well the more things change the more they stay the same I guess

i saw that .. I was like what the hell?

Cleary BHS ( who neither of us are fans of ) was right they are a very poorly run company and getting worse year over year.

notice teh stock was well under all the tender offers even before this..

 

[Abeamus]

i saw that .. I was like what the hell?

Cleary BHS ( who neither of us are fans of ) was right they are a very poorly run company and getting worse year over year.

notice teh stock was well under all the tender offers even before this..

They even tried bringing up TVXQs treatment like... that isn't the W you think it is SM clearly hasn't changed at all over the years and I think unless they get a grip there's a chance SM loses some of its power through other companies using what they have smarter

 

[RandAlThor]

They even tried bringing up TVXQs treatment like... that isn't the W you think it is SM clearly hasn't changed at all over the years and I think unless they get a grip there's a chance SM loses some of its power through other companies using what they have smarter

Jessica twitter( it was trending at 2 am when i first saw this.) is full of quotes from her book saying she told you...

 

[Abeamus]

Jessica twitter( it was trending at 2 am when i first saw this.) is full of quotes from her book saying she told you...

SM just hasn't adapted to the industry it helped kickstart and it makes me wonder how strong SM would be if it was created today if they'd be able to still create something unique or if they'd struggle being as a disadvantage with how competitive the market is now

 

[alo]

sm haven't ever learnt, have they? jtl (the og jyj, formed by 3 members of h.o.t who were fucked over by sm, they were paid only $10,000 usd for every 1 million albums - extremely fucked), jyj themselves, hangeng, krislutao, and now cbx. this actally now means that 50% of exo's debut lineup is in the so-called "lawsuit line"... which man, speaks volumes on how fucked this situation is. and it struck me (though this may seem irrelevant idk) - chen has a literal family. he has mouths to feed. how the fuck is he to do that if he's not making money? this is just so sad...

good on cbx for speaking the fuck up

 

[Jewel]

I shoulda looked b4 I posted about this too

 

[Jewel]

Spoiler: This isn't true and probably borders on fanfiction... or is fanfiction... I don't know what the rules are around fanfiction...

This is all made up and not based on any real evidence, but I wonder if the 8th member who didn't re-sign was Chen, and it wasn't because he didn't want to, it was because SM decided not to renew with him. A way to comply with the anti's bs demands without technically removing him from the group. Because after all the other shit SM has done, nothing would really surprise me anymore if this turned out to be true.

And Xiu and Baekhyun, sick of all SM's bullshit, decided to take action alongside Chen to get what they're owed and bounce. (Maybe the other members too but they've got some contractual stuff that means they can't leave just yet. (Like Suho's musical) I don't know. Like I said this isn't true and is all made up based of of my seething annoyance at SM lol.)

(obviously there are a lot of holes in this theory so don't take it too seriously)

But it wouldn't surprise me if this turned out to be true.

Unfortunately it is true. Unless multiple kpop news outlets are lying.