HYBE Suspected Of “Stealing” ADOR’s Funds To Inflate Other Subsidiary Revenue
This article is part of our coverage of HYBE vs. ADOR CEO Min Hee Jin. You can read more and view the entire timeline here.
HYBE is yet again at the center of a controversy involving its subsidiary label ADOR after some recent media reports speculated that the conglomerate might be “stealing” from ADOR to inflate the sales of HYBE IM, a gaming subsidiary.
This report has attracted quite the attention of Korean netizens through a viral Theqoo post, which quoted an article mentioning suspicious internal transactions from ADOR to HYBE IM. According to the article, on October 17, the two HYBE subsidiaries announced an internal transaction of ₩4.20 billion KRW (about $3.05 million USD) between them in the third quarter of 2024. While HYBE IM received ₩4.10 billion KRW (about $2.98 million USD) from ADOR in revenue, ADOR received only ₩90.0 million KRW (about $65,300 USD) from HYBE IM for the same.
To put the numbers into perspective, the money received by HYBE IM is equivalent to 3.7% of ADOR’s sales last year and 13.3% of that of HYBE IM. The explanation behind such a huge transaction, however, has been brief. Both companies stated that it was gaming royalties, but there seem to be suspicions in the industry about HYBE trying to inflate the revenue of HYBE IM using ADOR, much of whose earnings are owed to the success of NewJeans.
The reason behind these suspicions is the apparent role reversal in this transaction. Usually, if a HYBE artist appears in a game, their label would get paid a fee by the gaming company for utilizing their IP through royalties and copyrights. But in this case, it appears that ADOR is paying HYBE IM for its gaming services.
Last August, HYBE IM updated its game Rhythm Hive to include NewJeans. Ideally, ADOR should have gotten paid by HYBE IM for their artists’ IP. Interestingly, HYBE IM has reportedly not reached the break-even point yet and even recorded an operating loss of ₩19.7 billion KRW (about $14.3 million USD) last year.
A market insider flagged the lack of transparency in such internal transactions, noting that if such a system continues, “problems may accumulate, such as a decrease in the amount of settlement artists should receive.” When a media outlet reached out to a HYBE official for their response, they said it was “difficult to confirm specific details regarding internal transaction disclosures.”
This report has led many netizens to believe that HYBE is “stealing” from ADOR to inflate its gaming subsidiary’s profitability on paper.
- “At this point, who is the one betraying the trust?”
- “Whoa??? They’re thugs.”
- “Wow. So that’s why they tried to kick Min Hee Jin out. To use the money as they pleased. Crazy.”
- “There’s no way they will take just the money away from ADOR.”
- “If that’s the case, then they could have just stayed with one company. What’s the point of having labels?”
