South Korea's YG Entertainment has denied reports that it spent 41.2 billion won - or about $30.8 million - on re-signing Blackpink last year. Investors in the publicly listed K-pop business are likely less concerned about the cost of that deal and more focused on when it will deliver new music, given the negative impact Blackpink inactivity has been having on YG’s revenues.
The 41.2 billion won figure was listed in a recent financial statement from YG Entertainment in relation to the acquisition of "intangible assets", which usually means the costs of signing or re-signing talent. Given the high-profile re-signing of Blackpink last year, some speculated that the figure related to that deal alone.
However, a spokesperson for the company told Koran JoongAng Daily, “There were various other contract renewals, as well as new contracts formed over various intellectual property rights. We cannot disclose the contract details, but the amount in question cannot be considered exclusive to Blackpink’s contract extension".
Blackpink's previous deal with YG Entertainment expired last August. On the back of their international success, Blackpink are by far the biggest group on YG's roster, which meant uncertainty as to whether a new deal would be signed resulted in the firm's share price falling.
When a new deal was finally confirmed in December, the share price shot up in value by 25%, although it subsequently fell again. That's partly because, while Blackpink as a group remain with YG, the new deal does not include involvement in each member’s solo career. Three of the members have set up their own agencies to manage solo activities, while the fourth is still finalising her plans in that domain. Therefore YG only benefits from the group’s output.
YG's spokesperson said that the company is now in the "planning stages" for new activity from Blackpink, likely to include both a new album and a world tour. However, there is no specific timeline in place, with the tour now seemingly set for 2025. That makes the company reliant on other acts like BabyMonster and Treasure in the shorter term.
One analyst, Ahn Do-young, told Koran JoongAng Daily, “Estimated earnings were lowered as the start of Blackpink’s world tour was pushed back from [the] end of this year to next year. Assuming that Blackpink’s new album will be released in the fourth quarter, the future stock direction will be determined based on the profit levels that other K-pop acts BabyMonster and Treasure can achieve before Blackpink’s contribution".
