Here’s What The HYBE (Big Hit) x Ithaca Holdings Merger Really Means For Artists Like BTS & TXT

News that HYBE (formerly known as Big Hit Entertainment) will be merging with Scooter Braun‘s investment company Ithaca Holdings has been sweeping K-Pop fandoms since it was announced—but what does it really mean? Here’s a jargon-free rundown of how everything will work for HYBE and its artists.

First and foremost, HYBE is the new name of the parent company formerly known as Big Hit Entertainment. Primarily known for owning Big Hit Music (the company which manages BTS and TXT) HYBE’s subsidiaries also include:

• Source Music (which manages GFRIEND),
• Pledis Entertainment (which manages SEVENTEEN and NU’EST)
• BELIFT Lab (which manages ENHYPEN in conjunction with CJ E&M)
• KOZ Entertainment (founded by Zico).

Alongside HYBE Labels, the company has several other branches: HYBE Platforms (Weverse), HYBE Solutions (for intellectual property, education, and more), and HYBE America, formerly known as Big Hit America.

The new merger will see HYBE America become the 100% owner of Ithaca Holdings. Technically, an acquisition is when one company purchases the majority or entirety of another company’s shares to control it, while a merger involves both companies combining to form a new entity. However, the terms are often used interchangeably due to the unique nature of each new partnership.

As of now, Ithaca Holdings is expected to become a subsidiary of HYBE America rather than directly merging with it. HYBE America will acquire Ithaca Holdings through its own merger subsidiary company, Big Hit Odyssey. Big Hit Odyssey will then be dissolved, leaving Ithaca Holdings as HYBE America’s sole subsidiary.

In turn, SB Projects is the subsidiary of Ithaca Holdings. SB Projects is the talent agency that manages Justin Bieber, Ariana Grande, and Demi Lovato among others. Unlike in K-Pop, artists in the United States have separate management companies and music labels. For example, alongside being managed by SB Projects, Ariana Grande is signed to Republic Records.

In order to acquire Ithaca Holdings, HYBE America will pay ₩1.19 trillion KRW (about $1.05 billion USD) to Ithaca Holdings’ existing shareholders and creditors. In another filing, HYBE stated that around 860,000 shares worth ₩182 billion KRW (about $161 million USD) will be issued to Scooter Braun, Ariana Grande, Justin Bieber, and over 30 more people.

Scooter Braun will receive 462,380 shares, while Ariana Grande and Justin Bieber will receive 53,557 shares each. When Big Hit Entertainment’s IPO first launched, each BTS member was gifted 68,385 shares each. However, it is currently unknown how many more shares the members may have bought since then.

Scott Borchetta, the CEO of Big Machine Label Group, will also receive 166,537 shares, with the remaining shares split between artists like Carly Rae Jepsen, Demi Lovato, and others.

Big Machine Records is the former home of Taylor Swift. Back in 2019, Scooter Braun and Scott Borchetta both attracted media attention after Ithaca Holdings acquired Big Machine Records, in turn acquiring the masters of Taylor Swift’s six studio albums—something Swift herself had been trying to do for years. This effectively gave Scooter Braun and his company the profits from Taylor Swift’s old songs.

In October 2020, Scooter Braun sold Taylor Swift’s masters to another company, Shamrock Holdings. However, after this news was publicized, Taylor Swift announced that Scooter Braun would still be profiting from her musical catalog for many years under the new deal.

While Taylor did not clarify whether she was referring to Braun himself or Ithaca Holdings, it’s presumed that she was referring to the latter. As such, it’s possible that after acquiring Ithaca Holdings, HYBE may profit from Taylor Swift’s old songs

As for HYBE’s artists, it’s important to note that Big Hit Music, Source Music, Pledis Entertainment, BELIFT Lab, and KOZ Entertainment are all separate companies to HYBE America. As such, Ithaca Holdings itself will not have any automatic influence on the creative freedom of BTS, TXT, and other K-Pop artists.

However, as part of the merger, Scooter Braun will join HYBE’s board of directors. A company’s board of directors is responsible for appointing (and firing) senior executives, signing off on major corporate decisions (such as mergers), helping set broad goals, and ensuring resources among other roles.

For a clearer look at HYBE’s new structure, here’s a handy infographic.