[News Figures] Lee Seong-su, 'Cheo-joka' Targeting Lee Soo-man

From SM Part-Timer to CEO
Conflict with Lee Soo-man Triggered by Alignment Management Participation
Escalating Rivalry for Allies Leads to Public Exposures 'Intensifying Drama'

[Asia Economy Reporter Yuri Choi] "I will make management decisions as a CEO, not as Lee Soo-man's rubber stamp."

Lee Sung-soo, co-CEO of SM Entertainment (SM) and nephew-in-law of founder and Chief Producer Lee Soo-man, who holds the company's helm, has sounded the opening salvo of a war. After a fierce power struggle entangling Align Partners Asset Management (Align), Kakao, and HYBE, it escalated into an off-market expos? battle. Lee Sung-soo was once a figure who called Lee Soo-man "teacher" and followed him. Why are these two now fighting relentlessly, even if it means rolling in the mud?

Starting as a Part-timer... CEO in 15 Years

Born in 1979, Lee graduated from Hankuk University of Foreign Studies with a degree in International Trade. At 19, he took his first step into the entertainment industry as a part-time worker at SM. His job was to report fan trends on PC communications during Shinhwa's debut to the company. He officially joined as an employee in 2005 and by 2009 was managing f(x) and leading the A&R (Artist & Repertoire) team, a department overseeing everything from artist discovery, development, contracts, to production and marketing. During this time, he helped produce hits for Girls' Generation, Super Junior, TVXQ, and others. Lee is also Lee Soo-man's nephew-in-law. However, their family ties were severed in 2014 when Lee Soo-man lost his wife.

Lee Sung-soo, co-CEO of SM Entertainment, is being interviewed by Asia Economy on the 9th. / Photo by Moon Ho-nam munonam@

As he solidified his position, in 2015 Lee was promoted to head of the Producing Division directly under Lee Soo-man. After serving as CEO of SM's U.S. branch in 2019, he became co-CEO alongside Tak Young-joon in 2020. This marked a rapid rise to CEO within 15 years of officially joining the company.

This success was not solely due to Lee Soo-man's influence. Lee Sung-soo personally learned composition and arrangement, creating songs such as SHINee's "The Name I Loved" and "Boys Meet Girls." He traveled worldwide to discover producers and songwriters, establishing a collective creative system called the "Song Writing Camp."

He expanded beyond Lee Soo-man's "Three Stages of Hallyu" theory into the virtual world. His strategy involves actual members and their avatar counterparts crossing between reality and virtual worlds to present content. The first act to lead this was aespa. He also announced plans to connect all artists into a vast universe called the "SM Culture Universe," similar to Marvel's expansive world.

From Mentor to Rival... The Management Rights War with Lee Soo-man

Lee Sung-soo is one of the closest aides who knows Lee Soo-man best. He called Lee "teacher" and learned the entertainment business from him. Lee Soo-man also said of him, "I've known him since he was four years old, and he joined SM at nineteen and worked alongside me."

The rift between them began when conflicts with activist fund Align started. Align, an independent asset manager, aggressively made shareholder proposals without concern for its financial parent company. It strongly criticized Lee Soo-man and SM's internal transactions, as Lee Soo-man, who had no official title and had stepped down from management, took about 6% of the company's revenue as fees.

Align's offensive intensified from March last year. Through auditor Kwak Jun-ho, appointed at the March shareholders' meeting, Lee Soo-man's activities were restricted. Lee Soo-man expressed dissatisfaction, saying the company was not adequately defending against Align. Meanwhile, Lee Sung-soo was also under pressure. This year, when Align filed a shareholder representative lawsuit, Lee faced a crossroads. Depending on the lawsuit's outcome, the company could be shaken, and Lee might bear legal responsibility. Ultimately, Lee Sung-soo broke away from Lee Soo-man and allied with Align. On the 3rd, he announced the end of Lee Soo-man's exclusive producing system and the start of the "SM 3.0" era.

The conflict escalated into a management rights battle. When Lee formed a joint front with Kakao, Lee Soo-man counterattacked with HYBE. Injunction lawsuits and competition to secure minority shareholder stakes are ongoing. Lee Sung-soo even launched an off-market expos?, alleging that Lee Soo-man created an overseas version of Like Planning in Hong Kong in 2019 to engage in offshore tax evasion. Lee Sung-soo declared he would disclose a total of 14 additional issues related to Lee Soo-man. Meanwhile, the organization has been engulfed in internal strife, and the company's image has been tarnished. Attention is focused on whether Lee Sung-soo can protect his management rights and restore trust in the company.