HYBE Delivers Response to NewJeans' Certified Letter Today
Unlikely to Accept Min Hee-jin's Return Demand
Possibility of Exclusive Contract Termination Lawsuit Increases
Ado Min Hee-jin, CEO, filed an injunction to prohibit the exercise of voting rights against HYBE, continuing the conflict between HYBE and CEO Min. The photo was taken on the 8th at HYBE headquarters in Yongsan-gu, Seoul. Photo by Kang Jin-hyung aymsdream@
The conflict between HYBE and NewJeans is reaching its peak. HYBE has taken active measures to prevent NewJeans from leaving, but has failed to resolve the conflict over the key issue of former CEO Min Hee-jin's return, increasing the likelihood of a lawsuit to terminate the exclusive contract.
On the 28th, HYBE and ADOR plan to deliver a response letter to NewJeans regarding the certified mail sent by five NewJeans members?Kim Min-ji, Hani Pham, Marshmello Daniel, Kang Hae-rin, and Lee Hye-in?on the 14th.
Previously, NewJeans demanded, "Correct all serious breaches of the exclusive contract within 14 days from the date of receiving this letter." The certified mail they sent included ▲ the return of former ADOR CEO Min Hee-jin ▲ an official apology from the manager who told NewJeans member Hani to "ignore it" ▲ deletion of photos and video materials used without members' consent ▲ measures to resolve damages caused by 'album pushing' ▲ resolution of disputes with director Shin Woo-seok of Dolphin Kidnapping Gang ▲ and guarantees of NewJeans' unique color and works.
HYBE's stance is to accept the demands as much as possible to prevent NewJeans' departure. The day before, ADOR also posted a statement on social media expressing trust in Hani's claim of being told to "ignore it." In the post, ADOR stated, "Hani clearly remembers that on May 27, a member of Belift Lab made remarks to Hani along the lines of 'ignore it' or 'just ignore and pass by.' ADOR fully trusts our artist's words and sincerely regrets the harm Hani suffered."
They added, "We hope Belift Lab does not take Hani's harm lightly and shows mutual respect," and "Please show a sincere attitude to prevent unnecessary controversies regarding ADOR artists from continuing."
However, HYBE finds it difficult to accept the most critical demand from NewJeans?the reinstatement of former CEO Min Hee-jin to the CEO position?making a lawsuit over the termination of the exclusive contract between the two sides inevitable. After the deadline for the final decision on the certified mail on this day, NewJeans is expected to file a provisional injunction to suspend the effectiveness of the exclusive contract.
NewJeans' departure is also expected to have a significant impact on HYBE's financial structure. According to HYBE's financial statements, ADOR recorded cumulative sales of 90.5 billion KRW through the third quarter of this year. Although this is a smaller figure compared to Big Hit Music (245.4 billion KRW), the label to which BTS belongs, or Pledis Entertainment (210.3 billion KRW), home to Seventeen, ADOR's sales are notable because they were achieved solely by NewJeans.
Considering that NewJeans debuted only two years ago and is still building global recognition, it is expected that sales in the trillions of KRW range could be possible over the next five years.
Losing a promising artist with guaranteed sales is a painful blow for HYBE as well. Ultimately, the core of the lawsuit over contract termination will likely be the amount of penalty fees and the degree of HYBE's fault. Industry insiders estimate that the penalty NewJeans would have to pay is between 500 billion and 600 billion KRW. However, if HYBE's liability is recognized, the amount could be reduced.
Former CEO Min, who left ADOR, has also begun supporting NewJeans. On the 25th, Min's side filed a complaint with Yongsan Police Station against HYBE's Chief Communications Officer and Head of Public Relations on charges of breach of trust without compensation. Min's side claimed, "Despite being in a position within the PR organization to promote NewJeans and receiving fees from ADOR, they not only failed to fulfill their duties but also diminished the results, causing serious damage to ADOR and NewJeans."
This complaint by Min's side is interpreted as a measure in anticipation of NewJeans' lawsuit to terminate the exclusive contract. According to the Standard Exclusive Contract for Popular Culture Artists (Singers) announced by the Ministry of Culture, Sports and Tourism, the agency, i.e., the label, is obligated to faithfully perform promotion and advertising for the singer's popular culture artistic services. If the court recognizes that the agency failed to fulfill its promotion and advertising duties, NewJeans could use this as favorable evidence in the lawsuit to terminate the exclusive contract.
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