3 EXO members accuse SM of ‘unfair’ revenue demands, renewing dispute

June 12, 2024

Three members of the popular K-pop group EXO — Chen, Baekhyun and Xiumin — claimed Monday their agency SM Entertainment is making an “unfair” demand over revenue from their individual activities, reigniting their conflict with the K-pop powerhouse after a year.

They alleged that the agency is unjustly demanding a 10 percent royalty from revenue of their individual activities without fulfilling its promise made to resolve the conflict in June last year.

During a press conference at a Seoul hotel, the trio’s lawyer, Lee Jae-hak, disclosed that SM promised to allow the trio’s side pay at a 5.5 percent commission rate, far lower than the market rate, for albums and music distributed through Kakao Entertainment as a condition for striking an agreement to end the strife.

The promise, Lee claimed, led them to agree to the 10 percent revenue share from their individual activities, including album sales, concerts and commercials.

However, the agency is now only demanding revenue share without fulfilling its side of the deal, Lee explained.

Chen, Baekhyun and Xiumin, members of popular K-pop boy group EXO, are seen in this photo provided by SM Entertainment. (PHOTO NOT FOR SALE) (Yonhap)
Chen, Baekhyun and Xiumin, members of popular K-pop boy group EXO, are seen in this photo provided by SM Entertainment. (PHOTO NOT FOR SALE) (Yonhap)

The EXO members had renewed their contracts with SM but later notified the company of their intention to terminate the contracts last year. The reasons cited included the failure to provide proper accounting data. The trio subsequently filed an antitrust complaint with the Fair Trade Commission against the agency.

The conflict was temporarily resolved when both parties agreed to maintain the exclusive contracts with SM while allowing the members’ solo careers and activities as EXO-CBX, a subunit of the boy group to be independently managed by INB100, an indie label founded by Baekhyun early this year.

The lawyer also revealed that a formal notice was sent to SM in April, pointing out the breach of this promise, but there was no response.

He demanded SM acknowledge the failure to uphold the 5.5 percent commission rate and refrain from demanding 10 percent of personal revenue.

“Since the agreement is no longer meaningful, we will consider either canceling the agreement on the grounds of fraud or terminating it due to nonfulfillment of obligations,” he said. The trio will also consider filing complaints with the police and the state antitrust body regarding the agreement process, he warned.

SM promptly refuted the claim made by the EXO members, stressing that they willingly signed the agreement to pay 10 percent of revenue from their individual activities.

The company provided alternative concessions when the promise could not be fulfilled despite its efforts, including allowing Baekhyun’s solo album release through his personal agency and covering the cancellation fees for his self-canceled Japanese concerts.

Noting that the core issue lies in a third party’s “unjust” attempt to poach its artists, SM said it will not tolerate the trio’s repeated attempts to invalidate their contracts and subsequent agreement with the agency for their own gains.

“We’ll hold them responsible through the court while calmly responding according to the law and principles,” it added.