After NewJeans' ultimatum, no party can come out of agency dispute ...

The K-pop group NewJeans conducted a YouTube livestream broadcast on Wednesday during which they demanded that former ADOR CEO Min Hee-jin be reinstated to her position by Sept. 25, sending shockwaves through the K-pop sphere. 

On the following day, posts on social media platform X with hashtags demanding Min’s reinstatement surpassed 280,000. The price of Hybe shares dropped 6% on the same day. Stock prices for South Korean entertainment giants SM, YG, and JYP all went up on the same day, as if indicating there’s a chance that NewJeans may choose to break their contract with Hybe and seek refuge in another management company. 

The music community seems to have reached a consensus that NewJeans has made a de facto resignation announcement. During their livestream broadcast that fixed Sept. 25 as the deadline for Hybe to meet their demand, NewJeans members made a number of critical comments about Hybe’s operations, including: “The way Hybe does things is not proper,” and “We don’t want to force ourselves into the box that they [Hybe] belong to or go along with them.” It was a rare moment of K-pop performers openly expressing distaste for their management company. 

“Considering how openly critical they were in their livestream, I think they revealed their unwillingness to go along with Hybe’s vision,” said an anonymous source connected to the entertainment industry. 

“I think that NewJeans basically stated that they cannot trust Hybe,” the source added.  

Hybe has yet to issue an official statement regarding the livestream. During an extraordinary general meeting convened on Wednesday, Hybe’s newly appointed CEO Lee Jae-sang vowed to “deal with the situation calmly, by the book.” The atmosphere conveyed that Hybe will find it difficult to abide by NewJeans’ ultimatum. If Hybe reinstates Min into her former position, it will be a public recognition of her claims that she was terminated on unjust grounds, claims that the former ADOR CEO has taken to court in a civil suit against Hybe.  

Reinstating Min would also resurrect the shareholder agreement that grants her stock options to the tune of 100 billion won (US$75 million). Amid their legal spat with Min, Hybe announced their shareholder agreement with Min had been nullified and even filed a civil case to have the contract’s cancellation legally recognized. 

If Hybe decides to reject NewJeans’ ultimatum and not reinstate Min by Sept. 25, the rising girl group will have three choices: Begin the legal process of filing for a court injunction to cancel their contract with Hybe; pay a massive penalty for breach of contract; or stay where they are in ADOR and maintain their current exclusivity contract. 

The mood in the entertainment industry is leaning toward NewJeans going to court. 

“When you look at Hanni’s comments about Hybe executives looking down on her and being disdainful towards her, I think it’s clear that the trust between the group members and Hybe leadership has broken down completely,” said another source in the entertainment industry.

“In a civil case to nullify the terms of an exclusivity contract, the level of trust between the employer and the employee is a very important factor,” the source added. 

“It’s unlikely that they’ll cough up millions of dollars just to terminate their contract,” said another source. 

“There isn’t a domestic firm who will invest that much money into them,” the source added.

Even if NewJeans secures an investment from another firm, ADOR will still retain the IP rights of all the content they’ve made so far, so it won’t be an easy decision. 

And if NewJeans opts to maintain their contract and stay put, it’s unlikely that they’ll be able to go back to the way things were. The emotional rift between them and management is deep, and their desire to be reunited with Min is strong. 

Whichever choices New Jeans makes, however, Hybe will feel the pain. Financial analysts predict that NewJeans will account for 14% of Hybe’s operating profits this year. If NewJeans cannot retain their hype and momentum, it will be Hybe who ultimately suffers the biggest losses. 

Regardless of the legal outcome, Hybe has already suffered a loss of face. The brand name has taken a hit. 

“Record labels don’t just make music, they produce an image for people to consume. The company’s spat with NewJeans will likely paint Hybe in the public eye as yet another authoritative mega-conglomerate,” said music critic Seo Jeong Min-gap. 

“In a situation where the artist’s voice clashes with business concerns, it’s likely that the entertainment industry will increasingly lean toward prioritizing business concerns over the artist’s voice going forward,” said music critic Jung Duk-hyun. 

By Lee Jung-gook, staff reporter

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