Can NewJeans Actually Avoid Paying Penalty Fees To ADOR And HYBE?
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.
On November 28, NewJeans held an emergency press conference to address their early contract termination. They will be leaving ADOR and continuing as a group elsewhere, but at what cost?
It was previously reported that NewJeans would need to pay HYBE at least ₩300 billion KRW (about $225 million USD) if they terminate their contract with ADOR early. According to these reports, the fee could be as much as ₩600 billion KRW (about $449 million USD).
At the press conference, Haerin told reporters that she had seen articles about the early termination fee. She also said that NewJeans has no intention of paying the fee because NewJeans is not at fault. Rather, ADOR and HYBE should be responsible for covering the cost.
I’ve read several articles about penalties, but we have not violated our exclusive contract. We’ve worked hard and done our best so far, so we believe there’s no reason for us to pay any penalties.
— Haerin
However, as some netizens have pointed out, NewJeans might not be able to avoid paying penalty fees to their former label.
Well, at this point, I think they don’t have any proper advice. It would have been easier to pay the fine than to refuse to acknowledge it. They signed a contract, and it seems like they’re acting as if it’s not important. 💀
— katsuradll (SG) (@WilfrdMarc) November 28, 2024
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Following the press conference, ADOR released a statement to address NewJeans’ early contract termination. The agency stated that it has not violated its agreement and that NewJeans’ reason for voiding the contract is not valid.
As the relevant party to the exclusive contract, ADOR did not violate the contract, and their one-sided claims that the trust has been broken cannot be a valid reason for voiding the contract. The contract between ADOR and NewJeans is still very much valid. As such, we hope that NewJeans will be with ADOR for their future schedules as they have previously.
— ADOR
What does the law say? Korea’s Fair Trade Commission has a standard early termination fee for idols’ contracts. The early termination fee is calculated by taking the idol’s average monthly revenue over the past two years and multiplying it by the number of remaining months in the contract at the time of the early termination. In other words, legal action might need to be taken if NewJeans wants to avoid paying this standard early termination fee.
Read more about the future of NewJeans here:
