SM Entertainment Issues Official Response After EXO-CBX Report Them To The Fair Trade Commission

Published Categorized as Kpop

After EXO members Baekhyun, Xiumin, and Chen have filed a complaint against SM Entertainment with the Fair Trade Commission, SM has issued a response addressing their points.

On June 5, SM Entertainment released an official statement, emphasizing that “the artists’ press release contains many parts that are not true and argue that its evident that the intention of the artists, who triggered this incident, is to invalidate the effectiveness of the new exclusive contracts.

Related: SM Entertainment Claim They Will Provide Copies Of Settlement Documents For EXO-CBX, Promise Not To Hinder Future Group Promotions

Read their statement point by point below!

Hello, this is SM Entertainment.

We would like to address our position regarding the press release issued today by the representatives of Byun Baekhyun, Kim Jongdae, and Kim Minseok regarding the report filed with the Fair Trade Commission.

Many aspects of the artists’ press release are not based on facts. It is evident that the intention of the artists involved in this incident is to invalidate the effectiveness of their new exclusive contracts.

Validity of exclusive contract period recognized by the Supreme Court

Firstly, the exclusive contract period that the artists are challenging with the Fair Trade Commission has already been recognized as valid by the Supreme Court in 2018. The Supreme Court acknowledged that the casting, training, and producing processes for rookie artists require comprehensive support and substantial investment from the agency. Therefore, the exclusive contract period cannot be considered excessively long.

During the artists’ trainee period, they do not generate any income, but our company fully bears the substantial investment costs during this period. Furthermore, we promptly settle the accounts and distribute profits to the artists without delay upon their debut, without seeking cost recovery.

The artists, however, disregard the Supreme Court ruling and falsely claim that the exclusive contract period is problematic or akin to “slave contracts.”

Voluntary Signing of New Exclusive Contracts

Including the three artists, the EXO members, without any coercion for contract renewal approaching the expiration of their previous exclusive contracts, voluntarily entered into new exclusive contracts after sufficient discussions and consultations with the assistance of a prominent law firm. Our company conducted a thorough review and made counterproposals regarding the various conditions presented by the EXO members, engaging in negotiations and exchanging modified proposals over the last month, reaching consensus even on intricate details.

Furthermore, the provision for automatic extension of the contract period based on album sales was also mutually agreed upon and reflected. From the artists’ perspective, they can expect the company to release a predetermined number of albums, while the company anticipates corresponding album activities. This clause was established based on mutual trust to continue active entertainment activities together. Naturally, the specific number of albums was determined at a reasonable level.

Upon the request of the EXO members, the amount of the signing bonus was adjusted, and it was agreed to be paid at the commencement of the new exclusive contracts. Some of the EXO members have already received the signing bonus in accordance with the new exclusive contracts as their previous exclusive contracts have ended, and they have begun their activities.

It should be noted that one member of EXO is still in ongoing discussions with our company and has not yet signed the new contract, further evidencing the voluntary nature of contract negotiations.

Unrelenting Pressure Attempts to Invalidate the Effectiveness of the New Exclusive Contracts

The previous exclusive contracts and the new exclusive contracts are separate. The three artists voluntarily entered into the new exclusive contracts.

However, the artists subsequently reversed their position and sought to invalidate the effectiveness of the new exclusive contracts. They repeatedly pressured the company by demanding renegotiations, threatening to terminate the exclusive contracts immediately if copies of settlement documents were not provided, and threatening to report to the Fair Trade Commission and disclose information to the media. The company has engaged in sincere discussions in response to these demands, but the artists continue to make unfounded claims and distort the facts by invoking the term “slave contract” when asked to verify the involvement of third parties.

Efforts to Sustain EXO’s Activities

Despite the lingering suspicions of third-party interference, the company will make efforts to sustain EXO’s activities, including the decision to provide copies of settlement documents to the three artists.

It is deeply regrettable that the artists reported to the Fair Trade Commission without conducting a proper review of the recent Supreme Court ruling and based on false or distorted information. Regarding the reported case to the Fair Trade Commission, we will provide objective facts and clearly present our position in a composed and respectful manner. However, in order to protect the dedicated artists under our agency and the precious fans who have consistently supported us, the company will actively respond to any unfair attempts to disrupt legally concluded contracts or distort objective facts.

Thank you.

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