K-Pop

Fans Discuss SM Entertainment’s 5% Profit Sharing With Artists After EXO Members Baekhyun, Xiumin, & Chen File For Termination of “Slave Contracts”

June 1, 2023
Silvio Pena

In a shocking turn of events, three members of the popular K-pop group EXO, Baekhyun, Xiumin, and Chen, have taken legal action against SM Entertainment, demanding the termination of their exclusivity contracts. This move comes after the artists requested transparency regarding the company’s earnings but allegedly faced refusal from the agency. The news has sparked discussions among fans, particularly regarding SM Entertainment’s profit distribution model, which reveals that artists only receive a meager 5% share. However, it is important to note that the data provided is from 2018 and may have changed since then.

Below is the list of profit distribution rates from Top 8 management companies in Korea (as of August/2018) (source)

SM Entertainment

Contract years: 7 years
Physical sales: Agency (95%), Artist (5%)
Physical sales renewed: Agency (90%), Artist (10%)
Events: Agency (60%), Artist (40%)
Overseas promotions: Agency (30%), Artist (70%)

JYP Entertainment

Contract years: 7 years
Physical sales: Agency (50%), Artist (50%)
Physical sales renewed: Agency (30%), Artist (70%)
Events: Agency (60%), Artist (40%)
Overseas promotions: Agency (50%), Artist (50%)

YG Entertainment

Contract years: 7 years
Physical sales: Agency (50%), Artist (50%)
Physical sales renewed: Agency (30%), Artist (70%)
Events: Agency (40%), Artist (60%)
Overseas promotions: Agency (50%), Artist (50%)

Big Hit Entertainment

Contract years: 7 years
Physical sales: Agency (50%), Artist (50%)
Physical sales renewed: Agency (30%), Artist (70%)
Events: Agency (50%), Artist (50%)
Overseas promotions: Agency (30%), Artist (70%)

FNC Entertainment

Contract years: 7 years
Physical sales: Agency (60%), Artist (40%)
Physical sales renewed: Agency (50%), Artist (50%)
Events: Agency (60%), Artist (40%)
Overseas promotions: Agency (50%), Artist (50%)

CUBE Entertainment

Contract years: 7 years
Physical sales: Agency (80%), Artist (20%)
Physical sales renewed: Agency (70%), Artist (30%)
Events: Agency (60%), Artist (40%)
Overseas promotions: Agency (40%), Artist (60%)

Starship Entertainment

Contract years: 6 years
Physical sales: Agency (20%), Artist (80%)
Physical sales renewed: Agency (20%), Artist (80%)
Events: Agency (50%), Artist (50%)
Overseas promotions: Agency (30%), Artist (70%)

Pledis Entertainment

Contract years: 6 years
Physical sales: Agency (80%), Artist (20%)
Physical sales renewed: Agency (80%), Artist (20%)
Events: Agency (70%), Artist (30%)
Overseas promotions: Agency (20%), Artist (80%)

EXO Members Seek Contract Termination:

Baekhyun, Xiumin, and Chen, who have been part of EXO since 2012, have engaged the services of the law firm Lin to represent them in their legal battle against SM Entertainment. The artists claim that the agency forced them to sign lengthy exclusive contracts spanning 12-13 years and subsequently extended them to a minimum of 17-18 years. Referring to these contracts as “slave contracts,” they express their desire for transparency and fair treatment.

Demand for Transparency and Fair Treatment:

Baekhyun, Xiumin, and Chen requested “clear and transparent records” of SM Entertainment’s earnings. However, the agency reportedly refused to provide the requested documents, leading the artists to take legal action. The three members apologized to their fans for the concern caused and expressed their fear and apprehension in speaking up against the alleged unfairness. They vowed to find a wise resolution to the dispute and thanked their fans for their continued support.

SM Entertainment Blames External Forces:

In response to the legal action taken by Baekhyun, Xiumin, and Chen, SM Entertainment released a statement suggesting that external forces were influencing the artists’ decisions. The agency accused these forces of committing illegal acts by attempting to lure the artists into making wrong decisions and violating their exclusive contracts. SM Entertainment vowed to take all possible legal measures against those pursuing financial gain at the expense of their artists.

Fans React to Profit Sharing Model:

As the news broke out, fans discovered data regarding profit distribution rates among the top management companies in Korea. The figures revealed that SM Entertainment only allocated 5% of profits to its artists in 2018. This revelation shocked fans, igniting discussions about the fairness and equity of the company’s business practices. However, it is important to note that the provided data is outdated and may not accurately reflect the current profit-sharing arrangement at SM Entertainment.

Profit Distribution Rates of Top Korean Management Companies:

Comparing the profit distribution rates of various entertainment companies, it becomes evident that SM Entertainment’s 5% allocation to artists is significantly lower than other major agencies. However, the data presented dates back to 2018 and may not reflect the current practices within the industry. It is crucial to consider that profit sharing models may have evolved since then.

The recent legal action taken by EXO members Baekhyun, Xiumin, and Chen against SM Entertainment has brought attention to the alleged unfairness of their exclusivity contracts and profit sharing practices. Fans have expressed shock and concern over the reported 5% profit allocation to artists. However, it should be noted that the data provided is from 2018, and it is essential to consider the possibility of changes in profit distribution models within the company since then. As the situation unfolds, fans and industry observers eagerly await further developments and hope for a resolution that ensures fairness and transparency for all parties involved.