US subsidiaries acquired by CJ ENM and HYBE are reportedly suffering from great deficits
CJ ENM’s US subsidiary CJENM USA recorded sales of 91.2 billion won in the first half of this year, a decrease of 73% compared to the previous year’s performance (341.7 billion won).
CJ ENM faced a significantly hard time. It invested about 930 billion won in acquiring Fifth Season, which produced the movie “La La Land”, but encountered a strike by the writer & director union for the first time in 63 years. Although they expected to produce 24-28 works this year, only three productions were completed and introduced until now. The operating profit changed from a surplus of 45.4 billion won to a loss of 43.3 billion won. However, they promised improvement in the following year.
HYBE acquired Scooter Braun’s Ithaca Holdings with 1 trillion won in April 2021. In the first half of this year, it recorded sales of 74.2 billion won, a drop of 19% compared to last year (91.4 billion won). Its net profit also plunged from 16.3 billion won in 2022 to only 3 billion won this year.
With the news of Ithaca Holdings artists leaving, many people have started to doubt the synergy promised by HYBE and Ithaca Holding at the time of the acquisition. The fact that Scooter Braun sold his HYBE shares for approximately 18.4 billion in June has further fueled rumors of HYBE America crisis.
What draws attention the most is whether Ariana Grande will renew her contract. According to Billboard and BBC, Ariana Grande, Justin Beiber, and Demi Lovato, who belong to SB Projet label of Ithaca Holdings, are planning to leave the company, following the departure of Idina Menzel, who voiced Elsa in the movie “Frozen”.
Despite that, the US media Variety predicted that Ariana Grande and Justin Beiber would not leave the company but Scooter Braun would step down from SB Project to focus on being HYBE America’s CEO.
In this regard, Hanhwa Securities researcher Park Soo Young said, “It is true that HYBE America artists have grown significantly in the global music market”, adding “This is the time to confirm whether HYBE will be able to surpass what they have done so far”.
Source: Daum
