As the fight between SM‘s current management and HYBE over operation rights goes on, SM artists are getting more worried about their future.
Industry experts say that SM Entertainment has spent billions of KRW to settle disputes over SM management rights. They are worried that the artists will leave the company if the feud continues.
According to the investment banking (IB) industry on March 1, the current management of SM Entertainment, which called HYBE‘s takeover a “hostile takeover,” is thought to have spent tens of billions of KRWs to defend management rights.
It is known that the strategy consulting firm Boston Consulting Group (BCG) was hired for about 1.9 million USD (2.5 billion KRW). Six voting agencies were also hired to help shareholders get the right to vote.
This is a huge number, especially since they usually only hire one or two companies. People think that each of these companies will get at least 1 billion to 2 billion KRW (762,000 to 1.524 million USD).
Many people are worried that SM Entertainment will not be able to promote its own artists if it spends a lot of money on the lawsuit.
On February 13, SHINee’s Key held an online live broadcast to commemorate the release of his 2nd repackaged album and expressed his concerns saying, “I want to perform more than anyone else, but I don’t know who I can talk to about this. The business is in a bad place right now.”
Red Velvet‘s Seulgi also talked about her worries about the company at a fan meeting the same day. Fans asked Seulgi to dance NewJeans‘ “Hype Boy” choreography at the fan meeting. But she said, “I don’t want to make trouble because of a misunderstanding.”
People took this to mean that she didn’t want to cause any unnecessary confusion if NewJeans‘s agency, HYBE, became a big shareholder in SM.
On February 17, Taeyeon also posted on social media about how upset she was about what was going on. She wrote, “Everyone lives diligently,” which is a line from the movie “The Unjust” or “Unfair Transaction” in Korean.
In SM‘s uncertain time right now, many artists are about to get new contracts. In the worst case, when HYBE takes over, most of the SM artists would leave.
Artists from SM Entertainment include Kangta, BoA, TVXQ, Super Junior, Girls’ Generation (Taeyeon, YoonA, Yuri, Hyoyeon, and Sunny), SHINee, EXO, Red Velvet, NCT, SuperM, and aespa.
Except for aespa, all of the contracts will end this year or next. Some big agencies reportedly reached out to SM artists whose contracts are about to end to see if they would be interested in signing with their label.
An official in the entertainment industry said, “Idols who are already well-known don’t have a clear reason to stay in SM in the future, and it’s likely that they will find small and medium-sized agencies that will support their individual activities and give them a better share of the profits.”
He also said, “Most of the artists who have been with SM for a long time won’t be happy if the label is taken over by another big agency, because they chose to stay with the company out of loyalty.”
On the other hand, some people think that artists leaving is not such a big deal. A researcher at Hi Investment & Securities named Park Da Gyeom said, “At the moment, NCT and Aespa are SM‘s main intellectual property (IP), but if only these two teams are protected, there won’t be any major problems with the company’s value. Also, there is still the chance that new players will be added in the future.”
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