Will SM Artists Leave If HYBE Takes Over? Industry Insider Says Some May
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’s CFO reveals on a Youtube video that if HYBE takes over, there’s an imminent risk of SM artists being neglected due to a limit of ~100 album releases a year.
He also added that business opportunities would likely be given to HYBE’s 100% subsidiaries, as they’re a priority. pic.twitter.com/isKoxluMiK
— smnbg (@sr23bs) February 20, 2023
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.
No matter how 'bad' the circumstance in SM with internal conflicts each group has, but SM never really disband the grop without proper notice. SM still has manner to keep the group running with inactive member(s) but never kicked out the whole group like Hybe did to GFRIEND 🥺
— a y a ♡ h e e (@sjsofabulous) February 22, 2023
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.”
으응..하입보아 못추는 이유는..더보기 pic.twitter.com/nLNA3GVUCz
— 🏝 (@asxland) February 18, 2023
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.
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.
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.
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
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