HYBE’s Bang Si Hyuk Hits Back At Accusations Of Monolopizing K-Pop In A “Hostile Deal” With SM Entertainment
It seems as if the past few days have been crazy in the world of K-Pop.
In February, it was reported that SM Entertainment and Kakao joined hands, with further news stating that founder Lee Soo Man disapproved of the deal and intended to sue the directors of SM Entertainment.
On February 10, HYBE announced it had purchased Lee Soo Man’s shares, making it the largest shareholder in the company. Yet, it received bad responses from those working at SM Entertainment, who called it a “Hostile Takeover” from HYBE’s founder Bang Si Hyuk.
Amidst all the chaos, Bang Si Hyuk recently sat down for an interview with CNN and discussed everything going on after he and HYBE bought shares in SM Entertainment.
While the start of the interview seemed light-hearted, with the host even trying to see if he had a shot at being an idol…
The host Richard Quest didn’t beat around the bush by explaining that many people think HYBE is trying to “take over” the entire K-Pop industry.
Although it seems extreme, it is something fans have pointed out after the company acquired not only SM shares but also the influence of Weverse.
When asked why he wanted SM Entertainment despite the management’s views, Bang Si Hyuk refuted the claims. The HYBE owner explained, “It wouldn’t be correct to say that we’re trying to take over the whole industry,” even explaining that it is misinformation.
For example, people are saying that there will be a serious oligopoly (a state of limited competition) in the music market. But you need to analyze where music is being sold.
— Bang Si Hyuk
Bang Si Hyuk explained that despite thoughts and sales in Korea, it isn’t possible for the combination of HYBE and SM to monopolize the K-Pop industry.
You might assume that it’s sold mostly in Korea, excluding all international orders, even through purchasing companies, with all the CDs sold in Korea, both SM and HYBE combined, it’s very difficult for us to monopolize the market.
— Bang Si Hyuk
K-Pop isn’t just about CDs, and after revealing the extent of the products the industry, which is also a reason it would not happen, according to Bang Si Hyuk.
Richard Quest then touched upon the idea of HYBE acquiring shares as a “Hostile deal,” with everyone wanting different things.
Like always, Bang Si Hyuk went straight to the point, explaining, “I believe it’s crucial to clarify terms first.” He believed that the idea of a “Hostile deal” has a clear meaning that needs to be understood.
In economics, it basically refers to a case where a company is collected in the market against the will of a major or oligopolistic shareholder. However, we took over their stake with the consent of the major shareholder through due process.
— Bang Si Hyuk
Bang Si Hyuk then shared his own concerns about SM Entertainment’s management.
Of course, with such opposition from SM, the next question was about what he would do. While the amount of shares isn’t an issue, Bang Si Hyuk believes a general meeting is necessary and could help with SM’s issues.
Only when the support is obtained there, we can form the board of directors we want. I have long been sad that a good company like SM does not have a good governance structure. We have almost solved the governance problem through the stake acquisition at this time. And HYBE is well-known to help artists become successful only in the management process without touching their autonomy of their artistic originality.
— Bang Si Hyuk
Bang Si Hyuk ended by saying he knew that people were excited to see the effects of HYBE acquiring SM.
While the future of both HYBE and SM Entertainment seems uncertain and messy, Bang Si Hyuk seems determined to make it work so that both companies benefit.
