South Korea’s HYBE has announced that the former CEO of its Ador label, Min Hee-jin, will be reappointed as an internal director of the subsidiary. However, it will not reinstate her to the role of CEO, something that members of Ador-signed NewJeans demanded earlier this month, leading to speculation that the group could now begin legal proceedings against the label.
HYBE presumably hopes that today’s announcement will ultimately be seen as an acceptable compromise to both Min and NewJeans. However, that’s not yet assured, and Korean media are suggesting that the group might try to “find legal grounds for contract violations” to get out of their Ador deal, or even “pay a substantial penalty to terminate their contract”.
In a statement earlier today, the Ador board said that it would convene an extraordinary shareholders meeting to “reappoint Min Hee-jin as an internal director”. However, “the board cannot accept the request for her reinstatement as CEO at this time. Min Hee-jin’s role and authority as the producer for NewJeans are fully guaranteed and further discussions on specific terms will take place in the future”.
When the Ador board announced that Min had been removed as CEO of the label in late August, after months of public feuding between her and HYBE, the company added that Min would nevertheless continue in her creative role with NewJeans.
However, Min issued a statement insisting that that had not been agreed and that a contract setting out her new role was unacceptable, not least because it only assured her involvement with NewJeans until the end of November.
Since then, Ador has reportedly offered Min a better deal that would guarantee her the producer role with NewJeans for the next five years, which is how long the group is currently contracted to the label. Meanwhile, Min herself began legal action seeking to be reinstated as an internal director at Ador, which is what the board has now agreed to do.
However, that doesn't mean the conflict has been resolved. Min also issued a statement earlier today claiming that it remains uncertain if she will actually return as an internal director at Ador. Her proposed new contract with the label, she added, still contains “numerous toxic clauses”, and the best way to address ongoing issues with HYBE would be to reinstate her as Ador CEO.
Members of NewJeans issued an ultimatum on 11 Sep that Min should be reinstated to the CEO role at Ador by today. A meeting then took place between the group and current Ador leadership on Monday where the same demand was seemingly made.
Unless HYBE management and the Ador board can now negotiate some kind of compromise with Min, the members of NewJeans will presumably be reviewing their options regarding their future relationship with the label.
The Korea Herald speculates that the fourteen day ultimatum on 11 Sep was part of a plan for the group to go legal and try to negotiate themselves out of their current contract with Ador.
It says that “article fifteen of the Standard Contract For Popular Culture And Arts Professionals, proposed by the Fair Trade Commission” in South Korea is relevant here. Under that article, where an agency and artist have a contract, if either side breaches said contract they “may request the breach be corrected within fourteen days”.
“If the breach is not rectified within this period”, the Herald goes on, “the contract may be terminated and damages may be claimed. This is why NewJeans set a deadline of 25 Sep, two weeks after their live broadcast on 11 Sep, for a response from HYBE”.
Whether NewJeans would have a case for breach of contract is a big unknown. Min’s removal as CEO in itself is unlikely to constitute a breach. HYBE and other HYBE subsidiaries have been accused by Min of conduct that went against the interest of NewJeans, allegations which the group could potentially use in any legal case.
If so, an interview on Korean radio earlier this week may be relevant. According to Allkpop, business journalist Jang Hyung Woo from the Seoul Shinmun newspaper claims that a HYBE PR representative once contacted him, after he reported on the K-pop business in the context of a NewJeans show in Japan, and tried to talk down the success of the group.
“I’ve met countless PR managers”, Jang told a programme on South Korea’s CBS Radio, “but it was my first time hearing someone say that an artist from their own subsidiary isn’t doing well or didn’t perform as expected”.
Whether allegations of that kind could help NewJeans with any breach of contract case remains to be seen. If not, the Herald notes that another option for the girl group would be to try to buy themselves out of their Ador contract.
“NewJeans is believed to have about five years left in the contract and Ador’s revenue over the past two years is estimated to be around 190 billion won”, the newspaper reports. “This places the penalty for termination in the range of 450 billion to 500 billion won” - which is approximately £250 million to £280 million - “making contract termination a financially challenging route”.
However, it cites music critic Lim Hee-yun as suggesting that another company might be willing to help them find that money, and that buying their way out of the Ador deal “might be the easiest solution” if they want to continue working with Min outside of the HYBE empire.