EXO-CBX Agency Declares 'War' on SM Entertainment Over Distribution and Royalties

EXO members Chen, Baekhyun and Xiumin's agency has declared all-out war on SM Entertainment, accusing the latter of violating the agreement it made with the trio last year after a dispute months on their exclusivity contracts.

We are declaring all-out war against SM Entertainment, which made a promise it could not keep and committed what could be perceived as fraud, said Cha Ga-won, chairman of EXO's agency holding company trios INB100, in a press release. press conference held Monday in central Seoul.

The agreement was not stipulated in the written contract but was promised verbally by Lee Sung-su, then CEO of SM Entertainment, according to the three members' lawyer Lee Jae-hak.

The three members of EXO started their solo careers at INB100, a newly founded agency by Baekhyun last July after settling their dispute with SM Entertainment a month before, in January this year.

SM Entertainment demanded a 10% royalty fee for members using SM Entertainment's intellectual property (IP), such as naming licenses for EXO, EXO-CBX and other SM Entertainment-owned content, in exchange for distribution fees below the average which was written in the contract.

A verbal agreement is one that is considered legally binding by the Korean legal system, he said. We recorded files of the conversation between Lee Sung-su and Cha Ga-won as well as other forms of evidence. If SM Entertainment demanded the 10 percent commission, it would also have to fulfill the other end of the promised deal.

INB100 also demanded that SM Entertainment fully disclose EXO's revenue distribution, retconning last year's dispute that took place over the three members demanding that SM Entertainment shorten the length of their exclusive contracts with the agency and provide documentation of their income throughout their contract. years at SM Entertainment.

It is clearly stated in the law that an entertainment company is required to provide the document upon the artist's request, not to force the artist to simply come and read the documents, he said. We compromised at the time, but we want to take this opportunity to emphasize that what they did was only a pretense.

INB100 sent a formal complaint letter to SM Entertainment demanding that it keep its word on the 5.5 percent fee and provide members with requested documents, but EXO's agency has not responded in over two months, leading the agency to hold back on a press conference as a way to protect its artists, according to Lee.

The press conference was attended by INB100 CEO Kim Dong-joon, Lee of Lin Law Firm, representing the three members of EXO-CBX, and Cha, president of construction company p_Arc as well as as the majority shareholder and CEO of entertainment company One Hundred. The company owns INB100 as well as other K-pop companies including Big Planet Made and Million Market. Music producer MC Mong is the co-CEO of One Hundred.

Kim is also the CEO of Big Planet Made. He served as CEO of SM C&C, a content production subsidiary of SM Entertainment, from 2017 to 2023.

“I've been in the entertainment industry for 35 years and I've never seen anyone stand up to such a big agency like SM Entertainment,” Kim said. We had to be brave, but we were desperate. We hope that today's press conference will help other artists to also stand up to unfair deals.

SM Entertainment refuted the agency's arguments in a statement Monday evening.

“We simply offered to help CBX members get a better deal with the distributor,” SM Entertainment said.

“We have no rights over fees decided by another company, which is why no such clause was included in the contract,” he adds.

“CBX was able to reach a good distribution agreement and suffered no damage.”

EXO-CBX members and SM Entertainment clashed for three weeks in June last year when the three EXO members demanded that SM Entertainment's agency end unfair exclusivity contracts with the three members and announced it to the press.

The two parties settled the dispute on June 19, 2023 and set “certain conditions” based on an “equal relationship” between the two parties, according to SM Entertainment.

BY YOON SO-YEON [[email protected]]