Bang Si-hyuk, Chairman of HYBE, Keynote Speech at Kwanhoon Forum
Focusing on Preparing the 'Next Bang Si-hyuk'... Multi-label as Its Achievement
Will Continue Efforts Toward Multi-label and Global Companies
"It was the most Hive-like choice. Some might say 'Jjeotjalsa' (a Korean abbreviation meaning 'lost but fought well'), but personally, I am very satisfied with the outcome. I never viewed the SM acquisition battle as a war."
Bang Si-hyuk, Chairman of HYBE, is delivering the keynote speech at the Gwankun Forum held on the 15th at the Press Center in Jung-gu, Seoul. Photo by Dongju Yoon doso7@
On the morning of the 15th, Bang Si-hyuk, Chairman of HYBE, made this self-assessment regarding the results of the SM Entertainment acquisition at the Kwanhun Forum held at the Press Center in Jung-gu, Seoul.
This was his first statement after HYBE announced the suspension of the SM acquisition process on the 12th. Chairman Bang said, "I find it difficult to view the acquisition in terms of winning or losing. The acquisition was initiated for the happiness of artists and fans, and ultimately, it was a decision made with consideration of not harming shareholder value as a publicly listed company."
During the Q&A session following his keynote speech, Chairman Bang explained, "HYBE started considering the SM acquisition card from 2019. We quietly made two offers but were rejected, and since then, there has been ongoing internal debate."
He added, "Then, quite suddenly, we received contact asking about the intention to acquire shares from Mr. Lee Soo-man, and I judged that many of the previously perceived obstacles to the acquisition had disappeared, which led us to proceed with the acquisition process."
Chairman Bang mentioned the recent slowdown in K-pop growth, emphasizing, "While domestic entertainment companies like HYBE are praised for their strong performance in the global market, those in the industry are working with a sense of crisis and mission, determined that the current popularity should not be just a fleeting moment."
According to customs statistics on music export and import, the growth rate of K-pop album exports has been declining since 2020. Even in Southeast Asia, where the Korean Wave remains popular, the album export growth rate dropped by 30% in 2022 compared to the previous year, which is a representative signal.
Bang Si-hyuk, Chairman of HYBE, is delivering the keynote speech at the Kwanhoon Forum held on the 15th at the Press Center in Jung-gu, Seoul. Photo by Dongju Yoon doso7@
Regarding the suspension of the SM acquisition process, Chairman Bang stated, "The market overheating and the fiercer-than-expected acquisition battle were unforeseen. When the acquisition battle began, the situation exceeded the value we initially considered, and I thought we could not proceed if it meant damaging shareholder value and disrupting market order."
He further explained, "Also, since we reached an agreement through consultations with Kakao regarding platforms that will become more important in the future, I am personally very satisfied."
About the contract with former SM Chief Producer Lee Soo-man, Chairman Bang said, "I understand that unconditional fulfillment is not a premise for everything, and there was absolutely no personal benefit involved in the ESG-related agreements." Regarding Lee's reaction to HYBE's decision to suspend the SM acquisition, he said, "I explained everything in detail, and he did not show any special emotions. He only said something like, 'If you can win, why stop?'"
He continued, "Outsiders might have seen only the numbers, but it involved countless hours, efforts, and emotional labor from the members. Ultimately, we judged that the SM acquisition was not 'Hive-like,' and decided to pursue a global entertainment company according to our existing roadmap while investing in innovative companies."
In response to some opinions that Kakao was the unilateral winner of the acquisition battle, Chairman Bang, who began by saying he disagreed with viewing the acquisition in terms of winning or losing, evaluated, "Personally, I am very satisfied with the result as we contributed to resolving SM's governance structure and reached an agreement with Kakao on what we consider the most important future axis, the platform."
Bang Si-hyuk, Chairman of HYBE, is attending the Kwanhoon Forum held at the Press Center in Jung-gu, Seoul on the 15th, delivering the keynote speech. Photo by Dongju Yoon doso7@
In his keynote speech that day, Chairman Bang emphasized multi-labels, platforms, and people as the driving forces for K-pop's sustainable growth.
He said, "Current K-pop is like David among Goliath-like major companies in the global market. Just as Samsung exists in the global semiconductor market and Hyundai in the global automobile market, it is a crucial time for the emergence and role of a global entertainment company that will break through the current situation in the K-pop industry."
Chairman Bang identified the driving forces for K-pop's sustainable growth as △ strengthening presence and influence in the global market △ an operational method that can continuously produce superstars △ platform evolution to increase the possibility of creating super IPs.
Along with a blueprint to further strengthen HYBE's multi-label system, he stated, "HYBE aims beyond K-pop and will strive harder to become a leading player in the global entertainment industry through more intense contemplation and challenges."
Regarding BTS, who are currently on hiatus for complete group activities due to fulfilling their military service obligations, Chairman Bang said, "We hope to resume full group activities around 2025 when all members complete their military service, and this is an agreement with the members." He added, "There is still some time left on the members' contracts, and we will discuss further whether they will continue with HYBE during the remaining period."
Chairman Bang, who revealed that he is putting much effort into preparing for the 'next Bang Si-hyuk' whether it is five or ten years from now, reiterated, "A more solid infrastructure must be established across the industry to support the repeated emergence of global superstars like BTS."
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