NewJeans, the Second Fifty Fifty? ... Will It Be Similar or Different Ending?

Contract with Adoer Still Has Nearly 5 Years Left
Penalty Expected to Reach Hundreds of Billions of Won

NewJeans, a group under ADOR, the subsidiary of HYBE, has made a sudden demand for the return of former CEO Min Hee-jin by the 25th, drawing attention to the possibility of terminating NewJeans' exclusive contract. On the 11th, NewJeans members Minji, Hanni, Haerin, Danielle, and Hyein held an emergency live broadcast without their agency ADOR's knowledge, expressing that their trust in HYBE has been broken and demanding that former CEO Min Hee-jin be reinstated at ADOR by the 25th.

The group NewJeans is performing at their first solo concert and fan meeting in Japan, "Bunnies Camp 2024 Tokyo Dome," held at Tokyo Dome on the 27th.
[Photo by ADORE]

The NewJeans members said, "What we want is the original ADOR where management and producing were unified," and lamented, "Contrary to words, HYBE's actions do not seem to be for NewJeans' benefit." They criticized the news of Min Hee-jin's dismissal, the article accusing Min of breach of trust released a week before NewJeans' comeback, and the fact that a week after Min's dismissal, they could no longer work with the content creators they had been collaborating with.

Although the members did not directly mention contract issues during the broadcast, Minji said, "The reason we are making this request now is to find a way to get along well without fighting with HYBE," leading industry insiders to interpret the 'fight with HYBE' mentioned by Minji as referring to a provisional injunction to suspend the effectiveness of their exclusive contract.

If the exclusive contract dispute materializes, it could cause major disruptions to next year's activities

NewJeans demanded on the 11th that Hybe and Chairman Bang Si-hyuk "restore ADOR to its original state by the 25th," expressing hope for the return of former CEO Min Hee-jin.
[Photo by YouTube]

ADOR recently held an extraordinary shareholders' meeting and dismissed former CEO Min Hee-jin from her position, appointing Kim Joo-young, chairman of the board, as the new CEO. Along with the CEO change announcement, ADOR stated that it would separate the previously integrated management and producing system established during Min's tenure. Considering that HYBE, which has already established a new system, is realistically unlikely to accept the demand for Min Hee-jin's return, speculation is rising that NewJeans will file a provisional injunction to suspend the effectiveness of their exclusive contract after the 25th.

NewJeans has a world tour scheduled for next year. If the exclusive contract dispute becomes a reality, it could cause significant disruptions to their activities. In this case, NewJeans' future will depend on which side the court favors in the injunction or other disputes. While the members could pay the penalty stipulated in the contract to become free agents, industry experts estimate that the amount could reach hundreds of billions of won, making actual contract termination difficult.

CEO Min Hee-jin of ADOR has filed an injunction to prohibit the exercise of voting rights against HYBE, continuing the conflict between HYBE and CEO Min.
[Photo by Jinhyung Kang aymsdream@]

Since their debut in July 2022, the specific contract terms of NewJeans have not been disclosed. However, according to the Fair Trade Commission's standard exclusive contract, the penalty is calculated by multiplying the average monthly sales of the previous two years by the remaining contract months at the time of termination. ADOR, which only has NewJeans as its artist, recorded sales of 110.3 billion won last year. Based on the standard contract, the penalty could exceed 300 billion won.

Above all, since the demand for the return of former CEO Min Hee-jin is something HYBE cannot accept, cautious predictions suggest that NewJeans will inevitably face lawsuits similar to the Fifty Fifty case. This is because the dispute, which had been a management battle between HYBE and Min, has now escalated to active participation by NewJeans members, the contracted artists. In particular, some interpret NewJeans' live broadcast as resembling 'tampering'?contacting other agencies or organizations before the existing contract ends?similar to the Fifty Fifty incident, suggesting that NewJeans is conducting a public relations campaign for a major legal response.

Previously, in June last year, some members of the rookie group Fifty Fifty filed a provisional injunction to suspend the effectiveness of their exclusive contract with their agency ATTRAKT, citing opaque settlements despite their debut song "Cupid" charting on the US Billboard within four months of debut and their global success. In August of the same year, they also filed a criminal complaint against CEO Jeon Hong-jun for breach of trust. During this process, it was revealed that The Givers, a service company responsible for producing, A&R (album and artist planning), and marketing for Fifty Fifty members, influenced the members.

The injunction filed by the members was dismissed, and Fifty Fifty had to halt all activities and replace members. Subsequently, Fifty Fifty restructured as a five-member team by adding Moon Chanel, Yewon, Hana, and Athena. Former members Saena, Aran, and Sio, who left the group, are preparing for a fresh start after signing with MASSIVE E&C, a new label under the entertainment company IOK Company.

Unintentionally following a path similar to the Fifty Fifty incident, the dispute between NewJeans and HYBE, which involves demands HYBE cannot accept, is cautiously expected to result in internal damage for NewJeans as well.