In a recent development, INB100, the agency representing EXO subunit CBX (Chen, Baekhyun, Xiumin), has addressed SM Entertainment’s statement regarding the terms of their deal. The controversy centers around SM’s demand for a 10% royalty on personal activities, which INB100 claims is unfair.
SM Entertainment has dismissed these claims, labeling them as “tampering.” In an official statement, SM clarified that the exclusive contract with CBX remains valid. However, an agreement allows CBX to engage in personal activities through their private corporation, with SM receiving 10% of those earnings. SM emphasized that this arrangement was established during a previous contract dispute with EXO’s Chinese members and was enforced through court arbitration.
SM further claimed that after INB100 became a subsidiary of One Hundred, it sent a notice indicating that it no longer needed to honor the agreement. According to SM, CBX wants to retain the rights and benefits of being EXO members without fulfilling their obligations. SM highlighted issues related to the provision of settlement data, emphasizing that such data and individual activity details are proprietary and confidential. They expressed concerns that sharing copies of settlement data might lead to unauthorized third parties accessing them.
Regarding the claimed 5.5% distribution fee, SM clarified that this was a supportive gesture to help CBX negotiate better with distribution companies and that SM had no authority to set such rates. During the agreement process, CBX had requested the inclusion of the distribution fee condition, but SM explained that it was not within their power and excluded it from the final agreement. SM also mentioned that when CBX’s preferred distribution fee adjustment became difficult, they allowed Baekhyun’s solo album to be released through CBX’s private corporation and covered the cancellation fees for Baekhyun’s Japan concert. SM asserted that CBX hasn’t suffered any specific losses.
SM announced its intention to take legal action against CBX, stating that it would not tolerate CBX’s repeated invalidation claims of both the exclusive contract and the subsequent agreement. They emphasized their commitment to EXO’s group activities and criticized the misleading public statements by CBX’s legal representatives. SM vowed to respond legally and uphold its principles against what it views as tampering with external parties.
In response, INB100 held a press conference to announce its intention to file a complaint against SM Entertainment for what it claims is an “unfair” demand of 10% of earnings from individual activities by EXO members Baekhyun, Chen, and Xiumin. The press conference was attended by INB100 CEO Kim Dong-jun, chairman Cha Ga-won, and the label’s legal representative, Lee Jae-hak.
Lee stated that negotiations with SM Entertainment, made on behalf of CBX in the first half of last year, have broken down. He mentioned that legal action, including the termination of CBX’s exclusive contract, has been ongoing since June 2023. INB100’s executives and legal counsel claimed that despite past negotiations, SM has “changed its position” and “defaulted on the 5.5% album distribution fee it promised.” They also allege that SM is now “demanding 10% of sales from artists’ personal activities.”
INB100 argued that the rate at which CBX has been receiving their distributions has been “the core of the conflict with SM.” They claimed that the rate the EXO trio agreed to was made verbally and disclosed a recording of SM Entertainment COO Lee Seong-soo stating these conditions during the agreement. INB100 continued by alleging that there was a clause in the agreement stating that CBX is obligated to remunerate SM Entertainment 10% in royalties from their solo activities, despite both parties agreeing to 5.5% in a previous agreement.
INB100 and its legal counsel reiterated their stance from contract negotiations with SM Entertainment last year, stating that CBX would like to review the settlement data relating to their existing contract with SM. They demanded that SM provide the required information immediately and warned that if the above requirements are not fulfilled, CBX and INB100 will pursue legal action.
The dispute between INB100 and SM Entertainment has garnered significant attention, with both parties standing firm on their positions. As the legal battle unfolds, fans and industry observers are closely watching to see how this conflict will impact the future activities of EXO-CBX and their relationship with SM Entertainment.
