SEOUL (AFP) – Chart-topping group NewJeans shocked the K-pop world with their announcement that they are quitting their label ADOR over what they described as “mistreatment”.
Here are five things to know on the row, what this means for the multi-billion-dollar industry and what is next for the group.
“Historically, the contractual relationship between agencies and group members has repeatedly caused problems over the years,” Lee Dong-yeon, a professor at the Korea National University of Arts told AFP.
In 2009, the iconic boy band TVXQ shocked the industry with legal action against their label over their 13-year contract which they likened to a “slave contract” due to excessive working hours and unfair profit distribution.
Recently, in 2023, some members of FIFTY FIFTY sought to suspend their contracts, citing a lack of financial transparency and health neglect.
Kim Jin-gak, a professor at Sungshin Women’s University, said the NewJeans case “seems to have arisen because the parent company tried to exert too much control.
“While it may not significantly impact the entire K-pop industry, I believe it could lead to some changes in the way K-pop operations are managed.”
The legal battles will continue, and “the process is expected to take a long time,” said lawyer Kim Tae-yeon.
“Given the additional complexities in this case, it could take two to three years or more if it goes to litigation,” she added.
The biggest legal issue would be whether or not the girl band would have to face a contractual penalty, which experts predict could amount up to 620 billion won ($440 million).
“If the court finds that the company is at fault, as NewJeans claims, and that NewJeans did nothing wrong, they could defend themselves against any penalties,” said Kim.
HYBE’s share price was down five percent in early trading Friday.
The market has however already priced the incident in, and penalties will “result in an insignificant amount of financial loss for HYBE,” Lim Soo-jin, an analyst at Daishin Securities told AFP.
For now, NewJeans is no more. Or at least, the name may have to go because the label has exclusive rights over it.
But Danielle, one of the group’s members, said they will keep fighting to be able to continue to make music together.
“We really wish to be able to release new music for Bunnies next year as soon as possible … and we really hope that we have the opportunity to meet you guys from all around the world,” she said, referring to the name for their fandom.
“Regardless of our name, just remember that NewJeans never dies.”
