Korea Management Federation Issues Statement on the 3rd
"Malicious Acts Undermining the Foundation"
"NewJeans Should Withdraw Previous Position and Engage in Dialogue"
Following the declaration of contract termination by the group NewJeans against their agency ADOR, the dispute between the two parties has intensified, prompting the Korea Management Federation (hereinafter referred to as KMF), an organization composed of entertainment industry management professionals, to publicly express its concerns.
The group NewJeans is attending a press conference regarding the termination of their exclusive contract held on the afternoon of the 28th at SpaceShare Samsung Station Center in Gangnam-gu, Seoul. From left to right: Haerin, Danielle, Minji, Hani, Hyein. Photo by Yonhap News.
On the 3rd, KMF issued a statement regarding the ADOR situation, saying, "We sincerely hope that this dispute will be resolved smoothly and earnestly pray that it does not escalate to the worst-case scenario."
NewJeans held a press conference on the 28th of last month, abruptly declaring the termination of their exclusive contract with ADOR, citing breach of obligations.
KMF assessed, "The recent escalation of the dispute between ADOR and NewJeans is causing various adverse effects on our popular culture and arts industry."
They continued, "The claim of contract invalidation through unilateral termination must be approached with great caution, as it can severely damage the overall trust in exclusive contracts."
KMF emphasized, "If anyone can terminate a contract simply by declaration, how can the validity of exclusive contracts be guaranteed? Who would invest based on such uncertain contracts? From this perspective, contract termination must be approached very carefully, and the issue should be discussed within the fundamental premise of maintaining and supplementing contracts."
Furthermore, KMF pointed out the principle of "pre-investment and post-recovery" in the domestic popular culture industry, stating, "Companies that have nurtured new talents through investment face the greatest challenge of protecting these artists as much as possible and maintaining contracts to generate profits until they produce returns exceeding the investment."
KMF added, "In cases of disputes between various artists and agencies, the position is inevitably that of the 'weaker party,' hoping for the maintenance and preservation of exclusive contracts. However, current laws lack measures that consider the company's position. If a contract is maliciously terminated, there are no means to maintain the contract other than ultimately claiming damages. The approach taken by NewJeans at present is a very malicious method that could shake the foundation of our popular culture and arts industry."
Additionally, KMF expressed hope that "government ministries and related parties will discuss the industry’s long-term development from the ground up," and added, "KMF will not remain idle but will continue to monitor the situation closely and do its utmost to respond actively."
NewJeans members Minji, Hanni, Danielle, Haerin, and Hyein held an emergency press conference on the 28th of last month at a location in Gangnam-gu, Seoul, regarding the termination of their exclusive contract. They stated, "ADOR violated contract terms," and declared, "We are terminating the exclusive contract and have no obligation to pay any penalties."
Prior to this, NewJeans sent a certified letter demanding the correction of serious breaches of the exclusive contract, including the return of former ADOR CEO Min Hee-jin, warning that if no response was received by that day, they would terminate the contract.
The certified letter sent by the members included demands such as ▲ the return of former CEO Min, ▲ an official apology from the manager who told member Hanni to "ignore it," ▲ deletion of photos and videos used without members’ consent, ▲ solutions for damages caused by forced album releases, ▲ resolution of disputes with director Shin Woo-seok of Dolphin Kidnapping Crew who participated in the music video production, and ▲ guarantees of NewJeans’ unique identity and works.
The members claim that ADOR failed to fulfill its duty to take necessary measures to prevent interference or obstruction of their entertainment activities. However, when asked about future legal battles at the press conference, they responded, "This occasion is to convey the members’ position, and it is not a matter to discuss legal responses."
Statement from the Korea Management Federation
Our popular culture and arts industry respects exclusive contracts made between artists and agencies based on mutual trust. This foundation is built on decades of consideration and trust between artists and entertainment agencies, meaning that the mere occurrence of a problem does not constitute a complete condition for contract termination.
However, the current stance of NewJeans, which disregards all procedures, can only be interpreted as having no intention or consideration for the mutual efforts necessary to maintain the contract from the beginning. Our laws fundamentally protect established contracts and handle disputes by assigning responsibility when contract termination is reached. This implies that until a contract is fully terminated, the contract is protected, making NewJeans’ current claim of contract termination groundless.
Moreover, the claim of contract invalidation through unilateral termination must be approached with great caution, as it can severely damage the overall trust in exclusive contracts. Artists and entertainment agencies are not simply in an employment relationship but operate in a mutually cooperative partnership. Under an exclusive contract, artists must do their best to demonstrate their talents and cooperate with the agency’s activities, while agencies must support various activities to maximize the artists’ talents. When disputes arise, the assertion that exclusive contracts can be terminated by declaration alone results in fatal consequences for South Korea’s popular culture and arts industry, which involves long-term contracts and investments starting from trainee periods. If anyone can terminate a contract simply by declaration, how can the validity of exclusive contracts be guaranteed? Who would invest based on such uncertain contracts? From this perspective, contract termination must be approached very carefully, and the issue should be discussed within the fundamental premise of maintaining and supplementing contracts.
Finally, our industry, especially in popular music, has operated under the principle of ‘pre-investment and post-recovery’ from the past to the present. Companies inevitably become the weaker party in exclusive contracts because they invest first. Particularly, companies that have nurtured new talents through investment face the greatest challenge of protecting these artists as much as possible and maintaining contracts to generate profits until they produce returns exceeding the investment. In other words, when disputes arise between artists and agencies, the position is inevitably that of the ‘weaker party,’ hoping for the maintenance and preservation of exclusive contracts. However, current laws lack measures that consider the company’s position. If a contract is maliciously terminated, there are no means to maintain the contract other than ultimately claiming damages. From this perspective, the current approach taken by NewJeans is a very malicious method that could shake the foundation of our popular culture and arts industry.
Therefore, our federation hopes that NewJeans will withdraw their current stance and engage in dialogue with the company. We sincerely hope that this dispute will be resolved smoothly and earnestly pray that it does not escalate to the worst-case scenario.
Additionally, we have confirmed how significant the weaknesses are in current laws regarding stable contract maintenance. We hope that government ministries and related parties will discuss the industry’s long-term development from the ground up. For the continuous development of our popular culture and arts industry, KMF will not remain idle but will continue to monitor the situation closely and do its utmost to respond actively. Thank you.
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