Almost exactly a year after Chen, Baekhyun and Xiumin of K-pop group EXO first took legal action against their longtime label and management company, SM Entertainment, over contractual issues, a company founded by the trio has has now declared “all-out war” on the K-pop giant, according to Korean media reports.
Representatives of INB100, the start-up company founded by Baekhyun in 2023 — which signed Chen and Xiumin for their respective solo careers, though all three remain under contract with SM for EXO's group activities — held what has described as an “emergency press conference” in central Seoul on Monday (June 10). Chen, Baekhyun and Xiumin were not present.
During the press conference, as reported by Korea JoongAng Dailythree reps for the trio — who also play together in a splinter unit called EXO-CBX — said Chen, Baekhyun and Xiumin had a month-long dispute over fees and contracts with SM. Cha Ga-won, chairman and majority shareholder of INB100's holding company One Hundred, and one of the representatives who spoke at the press conference, claimed that a former SM CEO verbally promised in a recorded agreement to charge INB100 only a 5.5% fee for distributing its music releases through Kakao (SM Entertainment's current majority shareholder), as opposed to the 15% to 20% percent typically charged to companies outside of Kakao's umbrella. But Cha says that SM is now demanding a 10% fee for the members' use of the agency's intellectual property (such as the members' stage names, as well as EXO and EXO-CBX) in exchange for the reduced distribution fee.
“We are declaring full-scale war against SM Entertainment, which has made promises it couldn't keep and committed what could be considered fraud,” Cha said during the press conference, during which INB100 representatives also asked SM to reveal the collapse. of EXO's earnings — rekindling the same contract issues that were reportedly resolved last June. The representatives further claimed that INB100 sent an official letter of complaint to SM Entertainment two months ago regarding fees and earnings disclosure, but had not received a response.
On Monday night, SM Entertainment denied the claims in a press release. According to SM, an outside company imposed the 10% copyright fee after a court mediation for former EXO members who had left the label while still under contract. (Between 2014-2105, three other members of EXO left the group and terminated their contracts with SM to focus on the China market.) SM also claims that EXO-CBX's contract is still valid and that the trio benefits from the EXO brand, but it is not a fulfillment of their contractual obligations with SM, despite the company acting in good faith with a lower distribution rate.
SM's statement also claims that Chen, Baekhyun, and Xiumin were “smuggled” by Cha and MC Mong — a one-time rapper-producer in Korea who fell out of favor after allegations he evaded the country's mandatory military service, and who went on to start his own agencies, including BPM Entertainment, which now houses former SHINee artist SM Taemin .
SM added that they did not respond to INB100's complaint letter earlier to avoid being distracted by the new EPs released by EXO members Chen, DO, and Suho last month. The company concluded its statement by saying it would respond with legal action as opposed to trying to influence public opinion through press conferences.
from our partners at https://www.billboard.com/pro/exo-chen-baekhyun-xiumin-sm-entertainment-dispute-distribution/
