SM Entertainment plans to end the production contract with Like Planning, a company owned by Lee Soo-man.
According to SM Entertainment’s announcement on September 15th, they are considering terminating their production contract with Like Planning early. Like Planning is a private company established by SM’s executive producer Lee Soo-man.
In their official statement, SM said, “We have been conducting various reviews and discussions on the production contract of Like Planning with executive producer Lee Soo-man, and the executive producer told us that he wanted to terminate the production contract early at the end of this year.”
SM explained, “Our agency plans to discuss with major shareholders the impact of the early termination of this production contract with the executive producer on his business and announce the result later.”
Earlier, producer Lee Soo-man emphasized that Korea must become a “country of producers” in order to develop as a cultural powerhouse and gain national competitiveness. He repeated, “I have been working with the hope that junior producers will appear and the virtuous cycle structure that develops further when the producers gain public recognition will become a reality”.
However, some pointed out the problem with SM’s payment of tens of billions of won in royalties to Like Planning every year in return for production. In particular, Align Partners Capital Management, which holds a stake of 1.1% in SM, revealed that Like Planning earned 11.4 billion won in commission income from SM in the first half of this year alone. Therefore, Align Partners Capital Management has consistently asked SM to come up with improvement measures with Like Planning.
On the other hand, some people believe that the production ability of producer Lee Soo-man that created the current SM Entertainment should be recognized. For example, NCT 127 and NCT DREAM, the two units of NCT, a group that allows new members to be recruited, have emerged as representative boy groups of K-pop, and aespa is also drawing keen attention worldwide by introducing the metaverse concept. In fact, producer Lee is also highly regarded for maintaining a good sense even though he is already 70 years old. He recently helped the popular music industry receive love calls from the Middle East market, including the United Arab Emirates and Saudi Arabia.
SM also said, “Our agency also signed a production contract in agreement with the executive producer’s production capabilities and vision for the entire industry. Through this, we have not only created global K-pop stars but also developed systematic cultural technologies. Based on this, we have achieved remarkable results in spreading spread K-pop around the world.”
Nevertheless, SM issued this position to inform their plan of discussing with shareholders to find the best direction as they are determined to end the production contract with Like Planning early. SM emphasized, “We will continue to make efforts to grow as a leading company in the K-pop culture and industry.”