EXO’s Chen, Baekhyun, and Xiumin have announced their intention to sue SM Entertainment over what they claim is unfair profit distribution. The three members, who recently signed with Baekhyun’s new label INB100 for their individual activities, held a press conference earlier this week to voice their grievances. They accused SM Entertainment of failing to honor a promised 5.5 percent music distribution fee for INB100 and criticized the agency for demanding 10 percent of their revenue from individual activities.
In response, SM Entertainment stated that Chen, Baekhyun, and Xiumin, collectively known as CBX, had prematurely ended their exclusive contracts with the agency. According to SM, the trio had signed an agreement to pay 10 percent of their revenue from individual activities in exchange for early termination of their contracts. The agency also claimed that there was no clause in their final agreement regarding a distribution fee, as SM did not have the authority to set such a fee.
Following several additional statements from CBX, SM Entertainment announced on June 13 that they would be taking legal action against the trio to enforce the terms of their contracts. On June 14, Chen, Baekhyun, and Xiumin released a new statement announcing their decision to sue SM Entertainment over profit distribution and apologizing to their fans.
The trio’s statement read:
“CBX’s position regarding the lawsuit filed by SM and our legal response is as follows.
1. SM’s response was a lawsuit.
On June 12, SM filed a lawsuit against us.
At our press conference on June 10, we criticized SM for demanding 10 percent of our revenue while not fulfilling their promise of a 5.5 percent distribution fee.
And we asked once again what SM’s position was regarding our criticism. Additionally, at that press conference, we actively proposed an agreement of paying a fee for SM’s music, assets, and name instead of 10 percent of our revenue, but SM ignored this proposal.
In the end, SM did not make any reply to our attempts at negotiation, and they immediately drew the mighty sword of legal action.
2. We will do our utmost.
As SM has filed a lawsuit first, we will actively participate by revealing everything, including our negotiations from last year.
Additionally, regarding the distribution of profits that we had always doubted, we will file a lawsuit against SM over the distribution of profits. Through this lawsuit, we will assert our just rights by receiving accounting and profit-distribution data as decided by the law and our exclusive contracts. We will also reveal to the court that SM’s profit-distribution system is wrong.
Also, through our complaint to the Fair Trade Commission regarding the unfairness of our exclusive contracts, we will receive a proper judgment from the law.
3. A message to our fans
To our fans who always send us love and support and should only receive joy [in return], we feel truly sorry for bringing you anxiety and disappointment due to the same issue as last year.
In the future, we will minimize releasing official statements, and we will try to resolve this situation quickly.
Also, we promise to remain a Chen, Baekhyun, and Xiumin who can forever be together with you through the precious memories we’ve made with you all.
Thank you for taking the time to read this long statement. We apologize for once again making you feel unnecessary emotions.”
The dispute between CBX and SM Entertainment has garnered significant attention, with many fans and industry observers closely watching the developments. This legal battle could have far-reaching implications for other artists under SM Entertainment, as well as the broader K-pop industry.
Chen, Baekhyun, and Xiumin’s decision to take legal action comes after more than a decade of working under SM Entertainment. They cited a lack of transparency and inequity in profit distribution as key reasons for their decision. This is not the first time SM Entertainment has faced legal challenges over similar issues. In 2011, the Fair Trade Commission (FTC) recommended changes to reduce the length of exclusive contracts for artists from 13 years to 7 years. However, SM Entertainment reportedly included conditional terms that extended the duration of these contracts to up to 12 years.
The trio’s legal battle highlights ongoing concerns about labor rights and contract transparency in the K-pop industry. Fans and supporters have rallied behind Chen, Baekhyun, and Xiumin, calling for fair treatment and equitable profit distribution for all artists under SM Entertainment.
As the legal proceedings unfold, the public’s attention remains focused on the outcome and its potential impact on the industry. Chen, Baekhyun, and Xiumin’s fight for their rights serves as a reminder of the importance of transparency and fairness in the entertainment business.
