One month before New Jeans’ comeback, Hive-Adore creaks, Min Hee-jin’s ‘breakup decision’ costs

[비즈니스포스트] It appears that Adore CEO Min Hee-jin is preparing to part ways with its parent company, Hive.

This is because New Jeans, Adore’s representative artist, is showing an attitude of preparing for independence in a situation where there is a considerable amount of time left on the contract period by standard standards.

 

Summarizing the Business Post coverage on the 23rd, there is a view that it is similar to Fifty Fifty, a girl group belonging to a small and medium-sized agency, which has been controversial since June last year over the attempt by Adore executives, led by CEO Min, to seize management rights.

On the 22nd, Hive exercised its audit rights because Adore management, including CEO Min, decided that they wanted to secure management rights.

At SM Entertainment, CEO Min not only planned concepts for girl groups f(x) and Red Velvet, starting with Girls’ Generation, but also developed the concept of ‘conceptual’ through SHINee and carried out a project to realize EXO’s symbol and world view. .

Hive (then Big Hit Entertainment) hired CEO Min as Chief Brand Officer (CBO) in 2019, and Min worked together on a girl group project scheduled to be launched by Big Hit and its label Source Music. CEO Min exceeded 500 million won in annual salary just one year after joining the company in 2020, and she is also the first female executive among the four major entertainment companies in Korea to exceed 500 million won in annual salary.

In a phone call with Business Post, a Hive official said, “It is true that we exercised our right to audit because it was confirmed that Adore management had been conspiring to steal management rights for a long time. We are currently recovering computer assets and listening to face-to-face statements.” He said.

This official said, “CEO Min has not yet responded to the audit, so we have asked him to attend and return his assets.” He added, “If the audit results show that the previously secured clues and circumstances related to attempts to seize management rights or misconduct are confirmed to be true, legal action will be taken.” “I will step forward,” he added.

Hive owns 80% of Adore’s shares, so it is highly likely that it will proceed with legal procedures such as an extraordinary general meeting of shareholders to dismiss CEO Min based on this.

In relation to this, CEO Min denied in an official statement on the same day, saying, “Everything originated from the Eyelet New Genes copy incident,” and “It is not true that the attempt was made to seize management rights.”

However, the entertainment industry believes that CEO Min is laying the groundwork to take responsibility for terminating the contract as there is a high possibility that he will have to pay a large penalty in order to establish a separate corporation after terminating the contract with New Genes from Hive, the largest shareholder.

Of course, there is a view that CEO Min can solve the penalty problem by receiving investment from overseas investors in the process of establishing a new corporation, but the penalty is not trivial.

 

New Jeans’ debut is scheduled for 2022, and considering that the domestic idol group’s contract period is usually 7 years, there are still about 5 years left on the contract.

Although it is a recommendation, according to the Fair Trade Commission’s standard exclusive contract, the penalty is calculated as the average monthly sales for the previous two years as of the time of contract termination multiplied by the number of months remaining in the contract.

Even considering the fact that New Jeans recovered all of its investment and received settlement within two months after its debut and that the remaining contract period is 60 months, the size of the penalty is likely to exceed hundreds of billions of won.

An official in the entertainment industry said, “The cost usually invested in girl groups varies depending on the agency, but I know it is at least 7 to 10 billion won.”

In fact, it means that at least 7 billion won in profit was made in just two months, and as activities increase further in 2023, average monthly sales are likely to increase further.

Even if the average monthly profit at the beginning of debut was at least 3.5 billion won, a simple calculation based on the standard exclusive contract amounts to 210 billion won.

Some say that this Adore incident is similar to the so-called ‘Fifty Fifty’ exclusive contract dispute that shook the entertainment industry a year ago.

Girl group Fifty Fifty filed a lawsuit against CEO Dougie Bus, who was identified as an external force, for fraud and breach of trust after their agency Attract announced on June 23, 2023, that external forces violated the exclusive contracts of idol group members and attempted to lure them in. did.

Afterwards, the agency, Dougie Bus, continued to engage in litigation during the litigation period, including rejecting Fifty Fifty’s domestic advertisement proposal, withholding payment of copyright fees, and seeking damages.

Another official in the entertainment industry said, “The Fifty Fifty and this Adore incidents tend to be quite similar,” adding, “However, unlike Fifty Fifty, in the case of New Genes, domestic activities are currently of little significance, so if the contract is terminated, Hive cannot stop it.” “The means available are different from FiftyFifty, so it will be limited,” he said. Reporter Jang Eun-pa