CEO Morning Brief

SM Entertainment Plunges After K-Pop Boy Band Members Seek Exit

Publish date: Fri, 02 Jun 2023, 08:49 AM
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TheEdge CEO Morning Brief

(June 1): SM Entertainment Co, one of Korea’s largest entertainment companies, dropped the most in two months as members of one of its most popular bands sought to end their exclusive contracts.

EXO members Byun Baekhyun, Kim Jongdae and Kim Minseok gave the company notice of termination of their exclusive contracts, according to a statement from the company. The members allege that SM Entertainment is forcing its artists to spend more time with the agency in addition to the existing long-term contracts and called it abuse of power, Yonhap News reported earlier Thursday (June 1).

The nine-member K-pop group is one of SM Entertainment’s most popular acts.

The Seoul-based company fell as much as 8.3%, the most since the end of March, according to Bloomberg data. Trading volume rose to nearly five times the average as investors fretted about what the news meant for future profit.

Lee Jae-hak of the law firm Lin, the legal representative for the boy band members, didn’t respond to requests seeking comment.

In their statement, SM Entertainment said they’ve “identified external forces” that are giving false information to their artists, including “suggestions that it is okay to ignore our exclusive contracts and sign contracts with them”. The company said it would pursue all possible legal action.

Source: TheEdge - 2 Jun 2023

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