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How Much will NewJeans’ “withdrawal” from HYBE Cost?

If NewJeans truly terminate their contracts with HYBE, the girl group may face a significant fine of over 400 million USD. 

Recently, NewJeans held a live broadcast just one day before the general shareholders’ meeting of HYBE, where they demand for Min Hee-jin’s return, express worries for their future, and claim that they are being mistreated under HYBE. 

The timing of the broadcast leads to suspicions that NewJeans is planning to file for contract termination with HYBE and following Min Hee-jin, causing old articles from when the Min Hee-jin and HYBE conflict to resurface. 

In particular, an article titled “Will NewJeans Follow Min Hee-jin? Expected Penalty of Hundreds of Billions of Won”, is once again being discussed. 

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According to this article, If NewJeans delays leaving ADOR, the penalty fee will increase significantly. Since ADOR’s revenue has grown steadily since last year, the later the contract is terminated, the higher their contract termination penalty, which is “average monthly revenue in the two years before the contract’s termination” will be. 

ADOR’s revenue in 2022 was only KRW 18.6 billion (around USD 13.9 million), but it skyrocketed to KRW 110.2 billion (around USD 82.2 million) in 2023, marking a sixfold difference.

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Conversely, if the exclusive contract duration is shorter than 7 years, the penalty may decrease slightly but will still amount to billions of KRW.

Lawyer Seon Moon-jong stated in an interview with the Korea Times, “If the members of NewJeans unilaterally terminate the contract without any fault from the company, the penalty could reach KRW 600 billion (approximately USD 447 million) based on the standard contract.”

On the other hand, more updated news reports claimed that if roughly calculate based on the Fair Trade Commission’s standard exclusive contract, the penalty for NewJeans’ abrupt contract termination is at least KRW 300 billion (approx. USD 220 million).

Source: Daum, KMIB