Will BLACKPINK renew their contracts with YG Entertainment? Overseas 100 billion bets

As BLACKPINK entered the seventh year of their contract with YG, whether they will renew their contract has emerged as a hot topic.

As BLACKPINK entered the seventh year of their contract with YG Entertainment, whether they will renew their contract with this agency has emerged as a hot topic in the K-pop market. A securities firm recently claimed in its report, “The process is expected to go smoothly.” However, YG is expected to face considerable pain until the actual contract renewal is reached due to the huge burden to gain the upper hand in the money game, as overseas markets are also preparing to give the girls huge offers.

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The contract of BLACKPINK, who debuted on August 8th, 2016, will expire this August. On Jan 19th, NH Investment & Securities said, “The fact that YG’s stock prices are still undervalued compared to its competitors despite various momentum reflects the market’s concerns as BLACKPINK’s contract expires by August this year. BLACKPINK’s contract renewal is expected to proceed smoothly, so it is time to put down your excessive concerns,” it analyzed.

However, according to the Munhwa Ilbo’s report, YG’s contract renewal process with BLACKPINK is not expected to be smooth. This is because BLACKPINK has been rising tremendously as a global star over the past seven years. A professional who is familiar with overseas markets said, “As far as I know, for Lisa, who has an absolute influence in Southeast Asian markets including her hometown Thailand, many from countries such as China are expressing the intention to offer her 100 billion won in guarantee,” adding, “This is hard to handle considering the size of Korea’s market.”

blackpink conccert

Of course, BLACKPINK members do not simply decide their future based on the amount of money they will receive. This is because it is easier to maintain their original color only when they join hands with YG, their original agency that holds the trademark of BLACKPINK. However, an appropriate down payment offer from YG is also key, as from the artist’s point of view, it is an absolute indicator of their status.

Even considering the situation, industry insiders predict that YG should offer a down payment of at least 20 billion won per member to be able to keep BLACKPINK. Currently, the girls are on a world tour with 1.5 million audiences expected. Considering each ticket is at an average of 120,000 won, BLACKPINK’s ticket sales alone amounted to 180 billion won. On top of that, considering BLAKCPINK’s album sales, music revenue, other activities such as advertising, the symbolism YG will gain from maintaining BLACKPINK, and market capitalization as a listed company, YG needs to offer a proper down payment to be able to renew its contract with BLACKPINK.

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Another industry official said, “Such contract’s period is usually about two to three years. Assuming that YG needs to pay a total of 80 billion won in down payment (20 billion won per person) as rumored, the agency should calculate whether it will be able to make a profit within the period,” they explained.

Some analyze that YG’s recent announcement of its new girl group Baby Monster is also seen as a solution in case the agency faces difficulties in renewing its contract with BLACKPINK in the future. At the moment, YG has consideringly fewer artists than other major music agencies, especially after iKON left. In this situation, if BLACKPINK can no longer accompany YG, the agency will inevitably suffer a huge blow. If this situation occurs, it is highly likely that Baby Monster will be used as an alternative to minimize damage.

Baby monster

Meanwhile, BLACKPINK’s current world tour will be completed in June, only two months before their contract expires. This is why YG’s footsteps are bound to get busy.

Source: Munhwa Ilbo

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