SM Entertainment has denied the claims made by EXO‘s Chen, Baekhyun, and Xiumin in their emergency press conference and instead claimed they just want all the benefits without any of the drawbacks.
Earlier today, EXO’s Chen, Baekhyun, and XIumin held a press conference to explain how SM Entertainment was not keeping their promise regarding their music distribution fees.
SM Fails To Keep Promise About EXO-CBX’s Music Distribution Fees
They also claimed they renewed their group contract with SM Entertainment to protect the group.
In response, SM Entertainment shared a lengthy, 4-part statement detailing how they believe EXO-CBX’s claims made during their press conference are completely false.
1. MC Mong and Cha Ga Won’s tampering, a relationship “more than just family”
First of all, we want to make it clear that the essence of this whole incident MC Mong and Cha Ga Won’s unwarranted tampering of our artists. MC Mong and Cha Ga Won have approached several of our artists who hold valid, exclusive contracts with us for a while now. Since then, Chen, Baekhyun, and Xiumin have started to nitpick at the company’s faults in order to invalidate the contract that they initially signed with us. Despite this, we patiently listened to their opinions and as a result, we accept their request to be allowed to conduct their individual activities on their own. This means that while our exclusive contract with them is still valied, we have allowed them to conduct their personal activities through a private company. The three members agreed on the condition that they would pay 10% of the revenue from their personal activities tied to their private label to us, and signed the agreement. Although the company was not obligated to amend a previously signed contract, we agreed to make amends because continuing on with legal disputes against the members would harm EXO’s group activities. We felt this was not the way to proceed, taking into consideration the other EXO members and the fans who are doing their best for the group.
However, it was clearly confirmed today that INB100 is not operated independently by Chen, Baekhyun, and Xiumin. INB100 has already been incorporated as a subsidiary of MC Mong and Cha Ga Won’s agency. We already had suspicions of this, but today’s press conference confirmed that there indeed was tampering by the company towards the three. When we signed our agreement with Chen, Baekhyun, and Xiumin last year, we tried to protect the group by stating there was not much of an issue regarding potential tampering between the three, MC Mong, and Cha Ga Won. But after today’s press conference, we can’t help but feel terrible. We hope our true feelings for EXO are no longer distorted.
2. Chen, Baekhyun, and Xiumin want to enjoy the benefits that come with EXO’s name but are actually ignoring their necessary obligations.
After signing their agreement with us, Chen, Baekhyun, and Xiumin have been freely carrying out their activities. This includes music and album distribution, concerts, and broadcasts.
In this regard, the part where we would receive 10% of their revenue for their personal activities was a standard clause applied in accordance with court’s arbitration during our contract dispute with the Chinese EXO members. It has been established as reasonable and has precendent, thus we applied it to Chen, Baekhyun, and Xiumin’s case. The rate was discussed and agreed upon during the negotiation process.
However, INB100 was incorporated into MC Mong and Cha Ga Won’s company. They sent us an official notice saying there was no need for them to follow the agreement previously made. This is an attempt by the three members to enjoy the benefits of EXO’s name while neglecting their contractual obligations. AS such, Chen, Baekhyun, and Xiumin continue to ignore the legally valid contract itself.
After receiving the official notice from INB100, we initially did not raise an issue as D.O., Chen, and Suho were each individually promoting through their albums, concerts, and works in order not interfere with their personal activities. Nevertheless, we stress that Chen, Baekhyun, and Xiumin are even twisting our consideration.
3. Their claims about providing financial statements are just them trying to find any fault possible
Since EXO’s debut, the company has conducted with paychecks twice a year until the revision of the relevant law. Following the law’s revision, we settled paychecks each month. We have allowed our artists access to the revenue distribution and payment details. Also provided were the expenses related to each artist for them to analyze. If the artist requested, separate accounting records saved in our system were also free for them to verify.
Our artists personally signed off on the payment details after checking the revenue distribution and settlement details. Chen, Baekhyun, and Xiumin never raised any issues on their payment details until they started asking for copies of all of their payment records in April 2023 when they were trying to deny the validity of their contract renewal. Their claim was they questioned the new contract because the company did not provide any records of financial details is false. They used the financial records as an attempt to try to invalidate the exclusive contract.
Initially, we did not accept their demands as their demands were based on ban intentions. We were worried that these documents would be falling into the hand of a third party behind the three members. The specific details regarding their activities and the settlement rates for each individual artist are SM Entertainment’s trade secrets and need to be protected by the company. There would have been significant ramifications if this was made public because settlement rates are usually individually negotiated between the company and the artist. This is because as you were able to see from the press conference, the big issue here is tampering. We would like to make it clear that we are not obligated to respond to requests that are meant to be used for improper motives and we will also take necessary legal measures to address the settlement issues. This includes confidentiality agreements for Chen, Baekhyun, and Xiumin.
4. They are twisting our actions to protect EXO, despite the company’s financial losses
INB100’s claims of unfair distribution rates are simply not true. We previously mentioned we would support Chen, Baekhyun, and Xiumin by negotiating favorable rates for them, but we do not have the authority to determine the actual distribution rates for other companies. In fact, during the renewal process, Chen, Baekhyun, and Xiumin requested that certain distribution rates were to be included into the agreement. This clause did not make it into the final agreement as we explained the company does not have the final authority to determine distribution rates.
Moreover, despite our efforts, it became difficult for Chen, Baekhyun, and Xiumin to achieve their desired distribution rates. Instead, we showed other forms of consideration to them, such as allowing Baekhyun’s solo album which was under preparation since early 2023 to be released through his private company, not SM Entertainment. We also covered the cancellation fee for his unilateral cancellation of his Japanese concert [Londsdaleite, March 22, 2023]. Apart from this, both INB100 and Chen, Baekhyun, and Xiumin signed favorable contracts with another distributor which SM Entertainment is a major shareholder, ensuring the distribution of their music and albums is carried out smoothly. Therefore, Chen, Baekhyun, and Xiumin have not suffered any significant losses.
At today’s press conference, Chen, Baekhyun, and Xiumin’s legal representative mentioned that they are “adults capable of independent thinking and judgment, and they are responsible for their own decisions.” We can no longer tolerate their repeated actions of making invalid claims regarding their contract renewal and agreement that they signed after 18 months of negotiations between the company, the members, and their legal representative.
We will not tolerate their repeated claims to invalidate the agreed upon contract for their personal gains. Chen, Baekhyun, and Xiumin are trying to justify their wrongful behavior through manipulating public opinion. We will respond calmly according to the law and will hold them accountable through the legal process.
Thank you.
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