Under One Roof 11 Labels Criticized Amid Internal Conflict
Label Control Issues... "Will Enhance and Improve"
HYBE, the largest K-pop agency, has been engulfed in internal strife as its subsidiary ADORE comes into direct conflict. HYBE has launched an audit against ADORE CEO Min Hee-jin on the grounds of an 'attempted takeover of management rights,' with the multi-label system that guarantees the independence of each organization being pointed out as the root cause of the conflict.
On the 23rd, Park Ji-won, HYBE CEO, stated in an email to HYBE employees, "We will take measures after confirming the details (of the truth) more specifically through the audit." Regarding Min's statement the previous day that "I am being dismissed because I raised an issue that HYBE's rookie girl group AILET copied NewJeans," he explained, "The current issues are pre-planned matters unrelated to AILET's debut timing."
The group AILET, which debuted on the 25th of last month, is a rookie group under HYBE's label BELIEF LAB, produced by Chairman Bang Si-hyuk, attracting attention. Even before debut, their long straight hair girl image and concept were similar to NewJeans, earning them the nickname "NewJeans' younger sister group."
In a statement released on the 22nd, CEO Min claimed, "AILET copies NewJeans in all areas of entertainment activities, including hair, makeup, costumes, choreography, photography, videos, and event appearances." She added, "Chairman Bang Si-hyuk produced AILET's debut album. AILET's copying of NewJeans is not something done solely by the label BELIEF LAB but involves HYBE as well." She appealed, "NewJeans is currently preparing for a comeback in May. However, the emergence of a copycat has exhausted NewJeans' image, and the culprits behind this situation are HYBE and BELIEF LAB, yet the victims are ADORE and NewJeans."
Since concepts, costumes, hair, and choreography of artists have not yet been recognized as copyrighted works, Min's claim of copying is expected to be difficult to accept legally.
Some analysts view this internal conflict as a predictable clash arising from HYBE's emphasized 'multi-label' system.
HYBE, which started from Big Hit Music founded by Chairman Bang in 2005, has built a multi-label system by absorbing Pledis, Source Music, ADORE, KOZ Entertainment, US-based Ithaca Holdings, hip-hop label QC Media Holdings, Latin label Exile Music, and others. BELIEF LAB, jointly established with CJ ENM in 2018, was incorporated as a subsidiary last year. Currently, HYBE oversees a total of 11 domestic and international labels.
Under the multi-label system, trainees are managed collectively by HYBE, while album production and marketing are independently handled by each label. Additionally, HYBE centrally manages non-production departments such as performances, advertising, and human resources across multiple labels. Park Ji-won, HYBE CEO, expressed pride in the system during a conference call in February, stating, "HYBE's multi-label system is designed to reduce dependence on specific artists or labels by operating each label independently, fostering competition and cooperation among labels," emphasizing respect for each label's originality. HYBE's system has drawn attention after this year's earnings announcement, especially since many K-pop agencies have attempted but failed to implement a label system.
On the 16th, Hana Securities released a report titled "The Value of Multi-Label Seen Through NewJeans," evaluating ADORE as the label with the highest growth potential, having achieved an unprecedented annual sales of 100 billion KRW within the shortest period (one and a half years). Lee Ki-hoon, the Hana Securities analyst who authored the report, predicted that NewJeans would grow to the level of BLACKPINK by comparing their Billboard HOT100 and 200 performances, forecasting ADORE's expected sales and operating profit in 2025 to be 300 billion KRW and 90 billion KRW, respectively. He added, "Some may think the value of girl groups is too high, but YG Entertainment's peak market capitalization was 1.8 trillion KRW, reflecting BLACKPINK's world tour performance," analyzing that "ADORE's fair value within two years will be around 2 trillion KRW."
However, HYBE's proud multi-label system is being pointed out as the structural cause of the current ADORE incident. Industry insiders note, "The structure inevitably fosters competition among labels under one roof," warning that "conflicts may escalate if a particular label's influence grows too strong." This is evidenced by the episode where CEO Min, while preparing a rookie girl group at HYBE, left Source Music after a disagreement with CEO So Sung-jin and established ADORE. Unlike other labels acquired or split off, HYBE invested 15.4 billion KRW to establish ADORE in 2021.
Behind the competitive dynamic between Source Music's LE SSERAFIM and ADORE's NewJeans, which debuted around the same time, lies subtle tensions from the production process unique to the multi-label system, despite both groups belonging to HYBE. Ultimately, both Source Music and ADORE succeeded commercially. Judging by results, NewJeans appeared to be ahead. During this process, CEO Min and ADORE developed a perception that they succeeded independently without the support that HYBE and Chairman Bang provided to LE SSERAFIM, leading to feelings of not receiving fair treatment relative to their achievements.
Following NewJeans' success, in the first quarter of last year, HYBE reduced its stake in ADORE, which it wholly owned, from 100% to 80%, and CEO Min exercised a call option (the right to purchase shares at a predetermined price) to acquire an 18% stake in ADORE for about 1.1 billion KRW. However, ADORE's position is that this compensation is insufficient, and CEO Min has internally expressed related dissatisfaction continuously.
On the 22nd, HYBE exercised its audit rights against CEO Min and executive A. HYBE's audit team retrieved ADORE management's computer assets and discovered documents outlining plans to separate management rights. These documents reportedly included plans for Singapore's Government Investment Corporation (GIC) and Saudi Arabia's Public Investment Fund (PIF) to acquire HYBE's 80% stake, as well as strategies to secure internal allies to persuade HYBE to sell its shares.
HYBE also sent inquiries to CEO Min and executive A regarding facts about the alleged conspiracy to seize management rights of ADORE, business secret leaks, and personnel requests. In response, CEO Min has claimed through some media outlets that the conflict arose because rookie girl group AILET copied NewJeans' concept. She stated that although she officially raised issues about AILET within HYBE, HYBE instead exercised audit rights against her.
HYBE CEO Park Ji-won said in an internal email, "This matter clearly reveals an attempt to seize the company, so we started an audit to verify and correct it," adding, "If some of the facts confirmed internally and externally are clarified through this audit, we will take clear measures against responsible parties." Regarding the multi-label system, he stated, "We will carefully conclude this matter and continuously consider and improve what needs to be supplemented to advance the multi-label system."
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