Reasons for K-pop Stars’ Disputes over Exclusive Contracts and the Need for System Improvement

EXO’s Baekhyun, Xiumin, and Chen of EXO have notified SM of their intention to terminate their exclusive contracts, causing a stir in the music industry.

This reminds people of the TVXQ incident from 14 years ago in 2009 when three members withdrew. Given the sharp division between the arguments of both sides, there are also observations that the validity of the contract will ultimately be decided in court.

Moreover, it has been pointed out that fundamental improvements in the contractual disputes in the music industry need to be made.

3 EXO members claim “forced slave contract” vs SM “No issues”

EXO debuted in 2012 after going through trainee life and has been active for 11 years.


The members reached a re-contract agreement on December 30 of last year after about 1 year and 6 months of discussions starting from June 2021. The specific duration of the re-contract was not disclosed. However, considering the statement from Baekhyun, Xiumin, and Chen‘s side that “SM is claiming a contract period of 17 to 18 years,” the re-contract period is estimated to be around 5 to 6 years.

SM firmly maintains the position that it is inconsistent for Baekhyun, Xiumin, and Chen to sign a re-contract just six months ago and then notify the termination. If a compromise cannot be reached between the two sides, it is highly likely that the dispute between them will escalate to a court battle.

The TVXQ case 14 years ago

Many people are reminded of the TVXQ incident that occurred in 2009, where three members, who had enjoyed great popularity in Korea and Japan, Kim Junsu, Kim Jaejoong, and Park Yoochun, suddenly withdrew, causing shock. At the time, the claims of the three members also raised issues regarding the contract period and settlement.


The three JYJ members claimed that the exclusive contract was excessively long and the profit distribution was unfair to the agency, rendering the exclusive contract invalid.

Kim Junsu, Kim Jaejoong, and Park Yoochun argued that the original 13-year exclusive contract was essentially a lifelong contract, stating, “Including military service, it amounts to over 15 years, which practically means until retirement from the entertainment industry. The penalty for terminating the exclusive contract is also unfair.” 

This claim aligns with the argument that Baekhyun, Xiumin, and Chen presented regarding their excessive 17-18 year contracts.


However, SM Entertainment stated, “Our company faithfully adheres to the standard exclusive contract drafted and recommended by the Fair Trade Commission and the Ministry of Culture, Sports and Tourism,” and emphasized, “This contract has been acknowledged for its validity and legitimacy by the Supreme Court in the lawsuit filed by former EXO member Tao regarding the existence of the exclusive contract.”

Even after the Fair Trade Commission established the standard exclusive contract in 2009, disputes over exclusive contracts, both big and small, have persisted in the music industry.

In 2011, some members of KARA, who had reached the pinnacle of popularity in both Korea and Japan, notified their agency of their intention to terminate their exclusive contracts, leading to a crisis of disbandment, which was eventually resolved dramatically.

KARA Seoul Music Awards

Some members of LOONA had their request for a temporary suspension of the effect of the exclusive contract accepted by the court in 2021-2022, in their dispute with the company.

Lee Seung Gi also left his agency last year, claiming, “I didn’t receive proper payment for music royalties.” He started anew with his own one-person agency and filed a criminal complaint against former company executives for embezzlement and fraud.

Experts say, “Repeating even in 3rd generation groups is worrisome. Sufficient compensation should be achieved and accepted.”

Experts point out that as artists transition from trainees to top stars, there is a significant potential for disputes arising from “changes in position,” underscoring the need for improvements in the system.

Jeong Deok Hyun, a popular culture critic, stated, “During the stage when trainees are just debuting as idols, they may accept long-term contracts of 12-13 years. However, as time passes and they secure a fandom, there is a high possibility of ‘relationship reversal’ and disputes occurring.” 


He also pointed out, “EXO members already have substantial solo fandoms, so leaving the agency would not have a significant impact.

He concluded, “Ultimately, fairness in business matters is crucial. As much as the artists have achieved success, they should receive sufficient compensation that they can understand and accept. The disputes arise from the judgment that they can improve their situation by leaving the company and pursuing solo activities.

Jeong Min Jae, a music critic, expressed concern as a music fan, saying, “It’s worrisome that such incidents keep recurring even among 3rd-generation idol groups. If there are issues, it seems necessary to conduct a comprehensive investigation of the agencies and address them through institutional approaches.”

Source: Daum. 

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