Will SM Artists Leave If HYBE Takes Over? Industry Insider Says Some May

“They do not have a clear reason to continue staying with SM.”

HYBE announced that they had successfully purchased Lee Soo Man‘s shares in SM Entertainment on February 22, and ever since, the K-Pop industry has not known rest. Speculations regarding the possibility of HYBE completely acquiring SM, and what the end result of that would be, have filled online platforms to the brim. An industry insider even recently shared their opinion on whether SM artists could consider leaving the company if the acquisition does take place.

Fans of artists from both companies have tried to identify the positives and the negatives of the acquisition taking place, with one major concern being the older groups under SM Entertainment facing potential disbandment.

SM is known to rarely disband their groups, but some fans are worried that HYBE will not stick to the same agenda. This could potentially put fans of groups like TVXQ, Super Junior, EXO, SHINee, and Red Velvet under duress.

Aware of the tensions around the acquisition, as well as the exchanges between Lee Soo Man and SM Entertainment’s current co-CEO Lee Sung Soo (also known as Chris Lee), many SM idols themselves made subtle comments on the situation in recent weeks.

For instance, Red Velvet’s Seulgi recently declined a fan’s request to perform a dance cover of Newjeans‘ “Hype Boy” so as to “not cause trouble.

Likewise, SHINee’s KEY commented on the “distraction” when asked about holding an encore concert.

I want to hold it too, but who do I need to speak with so that they will hold the concert? I am someone who wants it just as much as the next person, but I don’t know. The label is distracted right now, so…Anyways…

— SHINee’s KEY

Another factor increasing fans’ worries is SM Entertainment’s artist contract renewal news — or rather, lack thereof. Since SHINee and Girls Generation‘s Yoona, Taeyeon, Yuri, Sunny, and Hyoyeon revealed they had renewed their contracts with the company several years ago, there has been no news of other artists doing the same. 

For instance, fans have had to come to their own conclusion regarding Red Velvet’s renewals. While the group’s contract was presumed to be seven years long, the current industry standard, no official news was released in 2021. Even now, over eight years since debut, the members have not mentioned their contracts.

Red Velvet | SM Entertainment

The NCT members who debuted through NCT U in 2016 (Taeil, Taeyong, Doyoung, Ten, Jaehyun, and Mark) are also presumed to be close to the time when they have to make the big decision.

NCT U “7th Sense” unit | SM Entertainment

Due to military enlistments, fans are unclear when groups like TVXQ, SHINee, and EXO will have to consider their renewals. With HYBE’s potential majority acquisition looming, industry officials are now considering whether many of these already well-known acts may decide to leave SM Entertainment.

Most EXO members have completed their military duty, with Kai and Sehun yet to enlist. | SM Entertainment

In an article from The JoongAng, one representative from the entertainment industry weighed in. According to claims from the unnamed insider, the company’s artists “do not have a clear reason to continue staying with SM.”

They have a high chance of seeking a small to medium sized agency that will support their solo careers and offers a more advantageous distribution of profits.

— Industry Insider

He went on to state that the biggest reason why SM artists may choose to stay is loyalty and the agency’s brand representation.

The artists who have been with SM for a long time have mostly decided to stay because of their loyalty and [SM’s] brand name. Therefore, they won’t welcome the idea of another large company absorbing [SM.]

— Industry Insider

The representative also considered how the possibility of SM’s senior artists leaving could affect HYBE’s desire to acquire the company — alluding that the potential of NCT, aespa and future debuts may be enough for HYBE to continue with the deal.

The main intellectual property (IP) rights that are currently keeping SM alive are NCT and aespa. If these two teams are secured, there is no major problem with the current corporate value, and the potential of new idols in the future also remains.

— Industry Insider

Source: The JoongAng