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Hybe CEO defends his company’s bid to control rival SM Entertainment
By Chris Cooke | Published on Tuesday 21 February 2023
The CEO of K-pop powerhouse Hybe has said that the proposed alliance between his company and rival SM Entertainment is crucial to solidify the influence and mainstream appeal of the genre globally. The comments follow various statements from the management team at SM criticising that alliance.
Hybe recently announced it had bought a 14.8% stake in SM Entertainment, then revealing plans to boost that to a 40% shareholding, which would basically give it control over its rival.
The initial stake in the company was bought from SM’s founder Lee Soo-man. Confirming that deal, he and Hybe founder Bang Si-hyuk said of the alliance between the two K-pop businesses: “We decided to collaborate to achieve our shared vision of upgrading K-pop’s global competitiveness”.
However, that deal was not backed by the management at SM, who had just agreed their own partnership with Kakao, the internet company that has its own entertainment business and operates South Korean music streaming service Melon. For his part, Lee objects to the Kakao deal and is seeking an injunction through the courts to block it.
The SM management team have been increasingly vocal over the last week in opposing Hybe’s ambitions to boost its shareholding in the company to 40%. Its CFO Jang Cheol Hyuk posted a lengthy statement to YouTube, dubbing Hybe’s current moves as a “hostile takeover” which, he insisted, will be bad news for SM’s artists and other shareholders.
Hybe’s share buying is also hindering the SM management’s bold plans for expanding and revitalising the company, he added, while a combined Hybe/SM would create competition concerns in the South Korean music market.
But, according to Bloomberg, Hybe CEO Park Ji-won insists that his company’s plan is good for the South Korean music business and the K-pop genre. The recent rapid growth of K-pop globally is now slowing down, he says, with competitors adopting some of the tactics that facilitated all that growth.
“The most glorious days are the most dangerous period”, he observes, adding: “We are constantly afraid that people might just stop listening to K-pop one day”.
He also says that, despite the vocal opposition of SM management to Hybe’s share purchase, he’s not necessarily opposed to said management team’s alliance with Kakao.
Noting Lee’s legal action in relation to that particular deal, he says: “We can’t elaborate on a matter that is still before the court, but I can say we have no reason to oppose a partnership with Kakao if it’s a way to boost SM’s share value”.
So who knows how this will all turn out? But at least we’ve got some new drama to concern ourselves with now that the “will they, won’t they” saga in relation to BTS’s military service is at an end.
