Will BLACKPINK renew their contract with YG Entertainment? has become a hot topic in K-pop market.
As BLACKPINK is in their seventh year of contract with their agency YG Entertainment, whether they will renew the contract with the agency or not has emerged as a keen interest in the K-pop market.
A securities firm also released a report saying, “It is expected to proceed smoothly, but it is expected that there will be considerable hard work to be done until the actual renewal is achieved. This is because YG Entertainment has to bear a huge burden to gain the upper hand in the money game, as overseas markets are also preparing to give BLACKPINK a huge down payment.”
BLACKPINK debuted on August 8, 2016,and their contracts will expire in August. On January 19, NH Investment & Securities analyzed, commenting, “The fact that stock prices are still undervalued compared to competitors despite various momentum reflects concerns about BLACKPINK’s contract expiration by August this year. BLACKPINK’s renewal is expected to proceed smoothly, so it is time to put down excessive concerns.”
However, according to the Munhwa Ilbo’s report, BLACKPINK’s contract renewal process with YG Entertainment is not expected to be easy. This is because BLACKPINK, who has been reborn as a global star over the past seven years, has risen tremendously. An industry official familiar with overseas markets said, “We got to know that Lisa, who has an absolute influence in Southeast Asian markets including her hometown Thailand, has been known to be offered 100 billion won ($81,000,000) in guarantees from China and other countries. This is hard to handle considering the size of Korea’s market.”
Of course, BLACKPINK members do not simply decide their future based on the size of the down payment. This is because it is easy to keep working as a group only when they join hands with YG Entertainment, which is the original agency and has the trademark “BLACKPINK.” However, YG’s suggestion of an appropriate level of down payment to them is also the key. This is because from the artist’s point of view, it is an absolute indicator of their status.
Even considering the situation, industry officials predict that YG Entertainment should offer a down payment of at least 20 billion won($16,000,000) per member to keep BLACKPINK. Currently, they are on a world tour gathering a whopping 1.5 million people. When calculated at an average of 120,000 won($97) per ticket, performance sales alone amounted to 180 billion won($146,000,000). On top of that, considering album sales, music revenue, other activities such as commercial filming, the symbolism YG Entertainment will gain from maintaining BLACKPINK, and market capitalization as a listed company, YG Entertainment should offer an astronomical down payment to renew their contract with BLACKPINK.
Another industry official said, “The contract period is usually about two to three years. Assuming that a total of 80 billion won($65,000,000) in down payment of 20 billion won9$16,000,000) per person is spent as rumored, we should calculate whether YG Entertainment will be able to make a profit within the period.”
YG Entertainment’s recent announcement of the launch of a new girl group Baby Monster is also weighed on the analysis that it is a stepping stone to keep in mind that it will face difficulties in renewing its contract with BLACKPINK in the future. YG Entertainment has a thinner ‘player base’ than other major music agencies. Recently, the number of affiliated groups has decreased further, with all of the members of group iKON leaving YG Entertainment. In this situation, if BLACKPINK can no longer accompany YG Entertainment, it will inevitably suffer a huge blow. If this situation occurs, it is highly likely that Baby Monster will be used as an alternative to minimize damage.
Meanwhile, BLACKPINK’s current world tour will wrap up in June. It is only two months before the contract expires. This is why YG Entertainment’s footsteps are bound to get busy.
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