NewJeans Will be Fined 210 Billion Won if They End Contract with HYBE?

According to Korean business news outlet Business Post, NewJeans will have to pay a hefty fine if they end their contract with HYBE and side with Min Hee-jin. 

In particular, 2 months after their debut, NewJeans has paid off all investment and received salaries. With 60 months remaining on their contract with HYBE, the potential fine for breach is likely to exceed hundreds of billions of Korean won.

Regarding this, an industry representative stated, “Investment costs in girl groups vary depending on the management company, but typically range from 7 billion to 10 billion Won.” (approx 5.1 million USD to 7.2 million USD).

In fact, the group has generated at least 7 billion Won in profit in the past 2 months. With additional activities expected in 2023, the monthly average sales are likely to have increased.

For reference, under the standard exclusive contract of the Fair Trade Commission, the penalty is calculated based on the average monthly revenue for the previous 2 years up to the contract termination date, multiplied by the remaining months in the contract. Business Post’s calculation based on this standard resulted in NewJeans having to pay a sum as high as 210 billion Won (approx 152 million USD).

There is also an opinion that the situation with ADOR this time is similar to the exclusive contract dispute of “FIFTY FIFTY” a year ago.

Source: Business Post