On the 12th, HYBE stated, "We will respond according to principles"
NewJeans likely to file injunction to suspend exclusive contract
Estimated penalty amount around 300 billion to 500 billion KRW
Group NewJeans demanded on the 11th that HYBE and Chairman Bang Si-hyuk reinstate former CEO Min Hee-jin by the 25th. Amid this, some in the entertainment industry have speculated that this move might be a strategic step considering the possibility of terminating their exclusive contracts. If the NewJeans members decide to part ways with their agency ADOR, given their status as a leading K-pop girl group, HYBE is also expected to suffer significant damage.
The group NewJeans is posing at the 'SEOUL FASHION WEEK 2025 S/S' YOUSER collection held on the 3rd at Dongdaemun Design Plaza (DDP) in Seoul. [Image source=Yonhap News]
On the 12th, HYBE CEO Lee Jae-sang stated at an extraordinary shareholders' meeting that they would "respond calmly and according to principles" regarding the request made by NewJeans members on the 11th. The five NewJeans members?Minji, Haerin, Danielle, Hanni, and Hyein?said during a YouTube live broadcast, "What we want is the original ADOR where management and producing are integrated under former CEO Min Hee-jin," and demanded, "Restore ADOR to its original state by the 25th."
With HYBE effectively rejecting the demand for Min Hee-jin's reinstatement, industry insiders anticipate that the members might file for a provisional injunction to suspend the effectiveness of their exclusive contracts after the 25th. The specific mention of the 25th as the reinstatement date is interpreted as a move based on the standard exclusive contract clause, which allows a 14-day grace period to request correction of contract violations; if uncorrected, the contract can be terminated or canceled, and damages claimed.
In this case, the "ADOR incident" is expected to escalate into a "NewJeans exclusive contract dispute."
NewJeans only mentioned the reinstatement date of former CEO Min but did not specify their response if their demand was rejected. However, subsequent statements indirectly hinted at the possibility of parting ways with ADOR. Minji suggested, "This is the way to get along without fighting," implying potential legal disputes, and Haerin emphasized, "We do not want to conform, sympathize, or follow the society that those people (HYBE and ADOR's new management) belong to."
Notably, the direct criticism targeting HYBE Chairman Bang Si-hyuk, calling it an "inhumane company" while addressing him as "Chairman Bang," indicates that the relationship between HYBE and the current ADOR management has reached an irreparable state. In contrast, the members have shown a strong bond by affectionately calling former CEO Min "Mom." The dominant interpretation is that refusing to continue with ADOR without former CEO Min, who is an irreplaceable figure to them, is not a choice but a necessity.
Last May, NewJeans members submitted a petition to the court expressing their wish for former CEO Min's retention, and recently at a popular music awards ceremony, they publicly expressed their unwavering affection by saying, "We truly love and thank CEO Min Hee-jin, who always cherishes and protects us."
The industry is closely watching whether NewJeans will file a provisional injunction to suspend the effectiveness of their exclusive contracts against ADOR and enter a legal battle. If NewJeans becomes embroiled in an exclusive contract dispute ahead of their world tour next year, it will inevitably disrupt all future plans, including albums and tours.
Legal experts currently predict a low chance of NewJeans winning, as there is no clear fault on ADOR's part sufficient to justify contract termination.
On the other hand, NewJeans members could become free by paying a penalty fee stipulated in the contract. According to the Fair Trade Commission's standard exclusive contract, the penalty is calculated by multiplying the average monthly sales over the past two years by the remaining contract months. ADOR recorded approximately 190 billion KRW in sales over 24 months from the second half of 2022 to the first half of this year. This figure does not include revenue from two fan meetings held at Tokyo Dome in June.
The industry estimates NewJeans' penalty fee to be around 300 to 500 billion KRW. If former CEO Min ends her relationship with HYBE, becomes independent, and attracts new investors, contract termination between NewJeans and ADOR is not impossible. However, before independence, all intellectual property (IP) produced by ADOR must be relinquished.
Regardless of the choices made by HYBE and NewJeans, the damage and repercussions from this incident are expected to continue for some time.
With former CEO Min's reinstatement effectively off the table, even if NewJeans decides to remain with ADOR, the deepened conflicts and distrust with management make smooth future activities difficult to expect.
The stock price is also fluctuating. Following speculation about a possible split with NewJeans, HYBE closed at 169,000 KRW on the 13th on the Korea Exchange, down 4,900 KRW (2.82%) from the previous day. During the session, the decline widened, at one point dropping more than 6%.
An investment industry official said, "Given the accumulated market fatigue and risks related to HYBE's multi-label system, volatility in the stock price due to NewJeans-related issues is expected to increase going forward."
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