(Bloomberg) — K-pop superstars NewJeans pulled the plug on its partnership with Hybe Co., escalating an unprecedented uprising that’s transfixed South Korea, wiping out as much as 7% of the studio’s value on Friday.
Most Read from Bloomberg
The chart-topping girl group called a surprise conference Thursday night and declared an immediate termination of an exclusive and money-spinning contract with Hybe-affiliate label ADOR. It’s one of the more dramatic actions in the history of an industry whose biggest stars are often locked into demanding, multi-year pacts — and are typically reluctant to protest publicly.
Hybe, best known for catapulting the careers of global sensation BTS, has lost more than $1 billion of its market value since April, when longtime NewJeans manager Min Hee-jin was sidelined by an internal company dispute. The group’s members threatened in September to walk out unless Min was reinstated — a threat they’ve since repeated and now made good on.
The action is likely to trigger a legal battle between the artists and Hybe, South Korea’s largest and most influential music company.
“We are well aware that from today we may not be able to use our current name NewJeans,” NewJeans member Danielle said during the Youtube stream. “However, that doesn’t mean that we are giving up on the name at all. We will continue to fight for new dreams regardless of our name. Just remember that NewJeans never dies.”
In response, ADOR expressed regret over the group’s decision and claimed the company has not violated the contract. With a few years left on their original agreement, that objection from the management company may result in legal actions that could drag on for months or years.
“The exclusive agreement between ADOR and the NewJeans members remains in full effect,” ADOR said in a statement via Hybe representatives. “Therefore, we respectfully request that the group continue its collaboration with ADOR on upcoming activities, as has been the practice to date.”
A representative for NewJeans said the group may go through legal proceedings if necessary once they hire a lawyer. It is unclear how the group can continue their activities, whether through a new entity or with another record label.
The internal strife was sparked when Hybe accused Min of attempting to seize control of the label. She refuted the allegation and publicly denounced the studio.
Min, who owns an 18% stake in ADOR, was ordered by its board to step down from the top management role, while remaining a board member and producer. That’s when NewJeans sent their ultimatum to Hybe, demanding the firm reinstate their ousted producer. Instead, Min stepped down from the board and left the company last week, warning of legal action.
NewJeans debuted in 2022 as a five-member act and quickly became one of the most popular K-pop bands globally, with hits like Attention and Super Shy. The group helped the music label generate about 110 billion won ($79 million) of revenue last year, contributing to about 5% of Hybe’s consolidated sales.
“We would certainly love to continue working with Min if we can,” said another member, Minji.
–With assistance from Denny Thomas.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.
Add Comment