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An SM without Lee Soo-man? What changes will happen after the “father of K-pop” leaves?

As Lee Soo-man finally confirmed the ending date of his production contract, several disputes are brewing over it. While shareholders are holding a welcoming position, the industry is concerned about the risk.

SM Entertainment (hereafter referred to as SM) announced on Oct 14th that, “Lee Soo-man’s producing license contract with Lee Soo-man’s personal operator agency Like Planning will be terminated as of December 31st.”

Lee Soo-man

Like Planning is well-known as a subsidiary of SM and a company in charge of outsourcing and consulting for SM’s album production. With the idea bank of ​​executive producer Lee Soo-man, who is also called the so-called “father of K-pop,” it has participated in the release of various hit songs by SM’s major hit artists, who are playing a huge presence in the K-pop scene. However, Fund Align Partners has criticized SM and Like Planning for exchanging a certain percentage of sales after signing a production contract, and the license cost is also significantly high. For reference, the number of licenses that SM paid to Like Planning in 2022 amounted to 24 billion won, accounting for 3.42% of the total business year’s sales.

lee soo man

In March and August, Align Partners sent an open letter to improve the service contract problem with Like Planning, while continuing to raise issues by requesting access to SM board minutes and accounting books. Align Partners owns 1.1% of the stake in SM.

sm entertainment

“We asked producer Lee Soo-man, who has been requesting an early termination of the contract for many years, to continue to be with us until the debut team and the upcoming teams are on track,” SM said in an official statement. “At a time when SM artists’ lineup for full-fledged concerts and activities in the global market is now fully prepared, album sales are soaring, and the 25-year-old production system is well operated, we are confident that good junior producers will manage well without much difficulty. It is also reasonable to humbly accept the opinions of minor shareholders, who requested he should step down, and the major shareholders.”

Lee Soo Man

SM also said, “(Producer Lee Soo-man) strongly expressed the opinion that this is the best time to end the contract. Before the end of this year, our executives have come up with a strategy to cover the next 50 years and hope to make a new leap forward to become a global entertainment company.”

SM has emphasized that it will thoroughly discuss this issue with stakeholders and has expressed its efforts to reduce controversies. Aligned partners immediately “welcome” this announcement, but insisted that “as many shareholders are interested in the issue of non-core subsidiaries, please join us in reading the minutes and accounting books.”

Lee Soo-man

With SM’s stock price soaring immediately, there are voices of concern that producer Lee Soo Man’s termination of his production contract will create curiosity about “SM without Lee Soo Man”, which is expected to add more interest to SM’s future position in the industry.

Source: daum

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