Interpark Music, “The 9-million-won advance payment contract signed with CEO Jeon’s private agency Star Crew was not for FIFTY FIFTY”
Interpark Music explained why FIFTY FIFTY’s contract lawsuit against Attrakt due to settlements is absurd.
Previously, when meeting with reporters after the first hearing regarding FIFTY FIFTY’s injunction application for the suspension of exclusive contracts with Attrakt held at the Seoul Central District Court in Seocho-gu, Seoul on July 5th, the legal representative of FIFTY FIFTY members raised the question about the 9-billion-won advance payment distribution contract between Attrakt CEO Jeon Hong Joon and the private company Star Crew Ent, which was made with the investment from Interpark Music.
At that time, FIFTY FIFTY’s lawyer claimed that 6 billion won out of 9 billion won was used for FIFTY FIFTY’s album investment, and the revenue from album and music sales was paid to Star Crew Ent. They questioned, “Why did CEO Jeon sign a contract with an unrelated company? In normal, it should have been a 9-billion-won advance payment distribution contract between Interpark and Attrakt”, adding “Star Crew Ent is responsible for the debt, but it is FIFTY FIFTY who is repaying it.”
However, this is a common misunderstanding among those who do not know the process of advanced investment contracts in the entertainment industry.
In an interview with Sports Seoul on the 9th, an Interpark Music official who led the advance payment contract of 9 billion won for Star Crew Ent, which was founded by CEO in 2020, explained, “The reason that we signed an advance payment contract at that time was mainly due to the successful activities of Ha Sung Woon, who used to be an artist under Star Crew Ent, as well as Jeon Hong Joon’s capabilities, abilities, and driving force”, adding “Interpark Music had confirmed that Star Crew Ent had the intention to produce a girl group. Back then, the team name ‘FIFTY FIFTY’ was still undecided, and The Givers CEO Ahn Sung Il had not joined the project yet.”
Advance payment contracts for music and album production are one of the ways small and medium-sized planning agencies secure funds for artist production. It is considered the most common method, where funds are received in advance for investment in production costs after music labels promise to release music and albums.
Most small and medium-sized agencies often receive advance payment investments to secure money for production costs. The received advance payment is used to produce artist albums and cover expenses to operate the company. The advance payment and artist settlements are not related. If the artist’s sales are unexpectedly high but the advance payment still needs to be repaid, agencies must find other ways to secure money to pay the artist settlements.
The official explained, “We know that some of the 9 billion won invested in Star Crew Ent was used for Fifty Fifty”, adding, “Since the debut of FIFTY FIFTY was approaching at that time, Star Crew Ent established a new company called Attrakt. We also considered transferring the existing contract from Star Crew Ent to Attract, but the full amount of 9 billion KRW investment is not solely for FIFTY FIFTY. It is an investment amount for other artists, including Ha Sung Woon, so the transfer to Attrakt was delayed.”
Therefore, FIFTY FIFTY’s lawyer’s argument that Interpark should have signed the advance payment contract with Attrakt does not make sense at all. It is extremely rare for a small agency, to receive investments of tens of billions of won for a girl group that had not yet debuted. According to the music industry, it was reported that Attrakt’s investment in FIFTY FIFTY before their debut alone already exceeded 5 billion won.
According to exclusive reports by Sports Seoul, a considerable amount of the investment (about 90 million won) was from CEO Jeon and Attrakt officials, who sold luxury cars, watches, and collected money from relatives. An insider stated, “CEO Jeon believed that having less company debt would make it easier to attract investments after the success of FIFTY FIFTY, so he poured his own money into the investment”, adding, “It is absurd for the members to claim that they did not receive proper settlements due to excessive investments in advance payments”. Another insider said, “We have never seen any case in which artists are involved in the company’s operating funds.”
Interpark Music official stated, “For music sources, settlement data is provided to the agency every three months in Korea and four months overseas, counting from the release date”, adding, “The members claimed that they earned 0 income from album and music sales from December last year to April this year. However, the release of ‘Cupid’ in February gained more attention overseas, making it difficult to receive settlements immediately separate from the advance payments.”
In short, Interpark confirmed that their advanced investment in CEO Jeon’s previous agency Star Crew Ent was not for FIFTY FIFTY and the members were not obligated to repay it.
Making their debut in November last year, FIFTY FIFTY emerged as a “miracle of small and medium-sized companies”, as their song “Cupid” became a big hit and even entered US Billboard ‘Hot 100’ for 14 consecutive weeks. However, a conflict between the group and Attrakt appeared, and the embers filed a lawsuit against their own agency. Attrakt also sued The Givers, the outsourcing service company that produced “Cupid” together with them, and the dispute is still intensifying.
Source: Daum
