MIA2K: A K-Pop Podcast

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Episode 43 – The Truth Behind SM’s Corruption and Biggest Scandals (2023 update!)

We’re finally here with an episode we were SO looking forward to recording, and that is the episode on SM Entertainment. Why were we looking forward to it so much? Well, this one was the JUICIEST one in terms of scandals at the highest levels with literal Interpol going after Lee Sooman for embezzlement, to all of the recent more minor scandals that have played out in front of our eyes in 2023. This is the fourth episode in our company-specific series, and so now we have:

  1. YG (23/05/15)
  2. JYP (23/05/29)
  3. HYBE (23/06/19)
  4. SM (23/07/03)
  5. Smaller Agencies (23/07/17)

Listen here:

Without further ado, here is all the tea and intel we gathered on SM Entertainment, its scandals, and a short-term look ahead.

A brief history on the founding of SM Entertainment

  • Lee Sooman opened SM Studio in 1989 (SM Entertainment’s original name).
  • During the 1990s, he started developing a holistic approach to managing idols. SM created the model that most idol agencies use today. *
  • SM went public in 2000 (the first of the big 3 to do so). 
  • SM changed its name in 1995 and opened a capital fund (a fund that seeks to increase assets by investing in stocks.*
  • Current CEO is Jang Chul-hyuk. 
  • Top Shareholders:
    • Kakao – 21%
    • Kakao Ent – 19% (if you’re keeping track, that’s 40% for the Kakao conglomerate)
    • Hybe – 9% 
    • National Pension Service – 4% 
  • SM Ent. is credited to have led the musical side of the Korean Wave (hallyu). Apparently, the term Korean Wave started to be used in earnest after H.O.T. performed in China in Feb. 2000.* 
  • SM Ent.’s model is ‘everyone is replaceable and there’s always a group ready to replace another.’ SM Ent. has the most active groups out of all the companies.

And now, to the man of the hour: Lee Sooman.

How did Lee Sooman go from a major in mechanics and computer engineering to starting one of the most successful music companies in South Korea? And how did he get himself in enough trouble to have Interpol after him?

Biography:

  • He’s often referred to as the “president of culture” and the “godfather” of K-Pop as one of the pioneers of the Korean Wave.
  • He debuted as a member of the band April and May in 1972, but later departed due to health reasons. He dropped solo songs “한송이 꿈 (A Piece of Dream)” in 1976 and “행복 (Happiness)”, released in 1978. He was also a member of indie band Sand Pebbles and Masamtrio (馬三트리오), a trio he formed with singers Lee Moon-sae and Yoo Yeol. His last attempt at a singing career was when he formed the band 이수만과 365일 (Lee Soo-man and The 365 Days). Discouraged by media censorship policies of the time, he gave up on music. 
  • He worked as a radio DJ and TV host throughout his singing stints.
  • He had a “good boy” image due to not being involved in weed scandal of 1975, and attending Seoul National University (studied mechanics). 
  • In the early 80s, he decided to leave the entertainment world to pursue a career in computer engineering. He went abroad to California State University, Northridge, where he worked on a master’s degree. 
  • After seeing MTV in its heyday and the power of artists like Michael Jackson, he returned to South Korea in 1985 “with a vision of what the Korean music industry could be.”
  • He worked as a DJ and presenter for four years to save up money to found SM Studio.
  • Set the groundwork for K-Pop’s global success, including the first breakthrough in 2002 when BoA topped Japan’s music charts.
  • In 2010, Lee Soo-man resigned as SM internal registered director and CEO at SM.

Embezzlement: 

In 2002, the Supreme Prosecutors’ Office of the Republic of Korea found evidence of Lee earning 10 billions worth of illegal market profits in August 1999.

There was also an investigation into circumstantial evidence of lobbying to producers in broadcasting stations and keeping a tremendous amount of cash in his personal office and vaults.

He tried to escape by staying overseas and was found two months later in a golf course in Los Angeles. While on the run, Lee’s passport was nullified and he was chased by Interpol.

In  February of 2023 Dispatch released an article with 123 points calculating Lee Sooman’s tactics resulted in over 570 million US dollars embezzled from SM earnings over 23 years. 

Companies: 

  • Like Planning: Lee Sooman founded this consulting and production services company in 1997 to receive royalties from SM. How has no one tried to stop this? They have. In 2019, KB Asset Management requested Like Planning to merge with SM. SM rejected this and said it wasn’t possible since they were not a corporation. In 2022, Align Partners (who has a 1.1% share in SM and is there to fix governance issues to increase profits) succeeded in appointing an auditor. In October 2022, SM announced that the contract with Like Planning was to be terminated on December 31. This means SM was finally able to cut ties with Lee Sooman. Align Partners were the ones to discover Lee Sooman’s royalties scheme where according to Attachment 2 of the Like Planning Producer License Agreement (signed and extended in 2015), ‘Agreement on Settlement after Contract Termination,’ Lee Soo Man will receive 6% royalties until 2092 on the proceeds from previously released albums without any obligations. Additionally, he will receive 3% of royalties on management profits until the end of 2025.
  • Culture Technology Group Asia: it was incredibly difficult to find anything on this one. Some confusing links came up that pointed to Red Velvet albums and others to a Europe-specific branch. If you know anything about this venture, please let us know!
  • On June 22nd of 2023, Lee Sooman registered a domestic management consulting company called Blooming Grace. The company address for this new venture is the same as that of LeePollux, which is another one of Lee Soo Man’s private businesses. It’s centered around drone technology for use in visual and audio production.

For the past few episodes on companies we’ve covered their controversies before getting into their artist catalog since the bulk of their scandals were focused on just a few isolated instances, but when it comes to SM, it feels like almost every artist they’ve signed has sued them at this point… so let’s get to know the plaintiffs first and then we’ll go to the cases. 

SM Recording Artist Catalog

FORMER GROUPS

  • H.O.T.: They are considered the first idol group. They debuted in 1996. commercially successful in China and Japan (which started the Korean Wave in earnest). Currently, Kangta (a member) is an executive in the company. They were the first K-Pop group to perform at Seoul Olympic Stadium.

  *

  • S.E.S.: first K-Pop idol girl group. 
  • TVXQ: Formed in 2003 and originally a five-member boy band. Their name is the initials for Tong Vfang Xien Qi (yes, that’s Chinese). They debuted in a BoA and Britney Spears showcase (ICONIC). They’re known by the newer K-Poppies for their hit song “Mirotic”. They disbanded in 2009. 
  • f(x): girl group, consisting of Victoria, Amber, Luna, Krystal Jung (Jessica’s sister) and previously Sulli until her departure from the group in August 2015. Unfortunately, Sulli took her life in 2019, but we really enjoyed this piece from the BBC which honors her for all her accomplishments and boundaries broken.

CURRENT: 

  • Super Junior: aka SuJu. SuJu is currently a 10 member group but they debuted with 13 members in November 2005. They are known for their vocals and “belting”.  SuJu has 5 subgroups. This was the start of the subgroup idea so that members could focus on individual careers alongside SuJu activities. 
  • SHINee: They are a boy group that debuted in May 2008 with 5 members. Currently, Shinee has 4 active members. Their name is supposed to mean one who receives light. They debuted with the song called REPLAY, which Kathy and I consider the best debut song of all time. SHINee is known for their colorful fashion style (please see their latest comeback “HARD”) as well as their experimental sound and wide range of genres. 
  • Girls’ Generation: Girl group that debuted in 2007 with 9 members and the song Into the New World. Fun fact: member Sunny is the niece of Lee Sooman. Their name in Korean is romanized as an acronym SNSD so if you see those letters, that’s another name for Girls’ Generation. After losing 1 member in 2014 (more on that later), they remain active as eight. Their last comeback was in 2022 titled Forever 1 which was their 7th studio album and 10th overall. All eight members have very successful solo careers as models, actresses, TV personalities, and singers. Dubbed “the nation’s girl group.” 
  • Red Velvet: Girl group that debuted in 2014 with 4 members with the single “Happiness.” Less than a year later, a fifth member (Yeri) joined. They have 3 studio albums and 14 EPs. Wendy went on a 16-month hiatus in 2019 after sustaining life-threatening injuries when falling off a stage. She made a full recovery and came back with a solo album drop in early 2021. Russian Roulette was featured on the movie Trolls: World Tour. They just finished their last announced dates for their R to V world tour in June. Joy was not present for the majority of the tour as she had health issues that caused a two-month hiatus. All five members are currently participating in scheduled activities. 
  • EXO: Boy group that debuted in April 2012. Initially, they debuted with 12 members divided into two groups EXO-K and EXO-M. EXO-K was the Korean based group and EXO-M was the Chinese based group. Currently, they have 8 active members. 1 member, Lay, inactive. His last participation was virtually in 2021. Prior to that, his last in person participation was in 2018. They are considered one of the top groups of the 3rd generation. 
  • NCT:  YouTube presentation on NCT 
    • NCT is a boy group introduced to audiences in 2016. NCT was created to fit into the culture technology strategy (developed by SM the man) with an “unlimited” number of members. The members would form sub-units and collaborate with each other. The name NCT comes from the presentation and it means New (Neo) Culture Technology.l The group currently consists of 20 members and they are divided into 5 different subunits. NCT was SM’s first boy group after EXO in 2012. 
    • NCT127 debuted as a subunit in July 2016. It combines New Culture Technology and 127, the longitude coordinate of Seoul. It currently consists of 9 active members.
    • NCT Dream debuted as a subunit in August 2016. Initially it was intended to be a teenage unit sort of like a school. Rookies would debut in NCT Dream as teenagers and as soon as they turned 19, they would leave to another NCT group. This changed in 2020 with the rebrand where NCT Dream became a fixed subunit with 7 members. 
    • NCT U is a subunit with rotating members. Anyone in NCT can be part of a NCT U subunit. It just depends on the concept. 
    • NCT Dojaejung – It consists of Doyoung, Jaehyun, and Jungwoo and they debuted in April 2023. They are R&B and vocal centered. 
    • WayV – The Chinese boy group subunit of NCT. They debuted in January 2019. All members have Chinese ancestry. Originally, WayV was not promoted as part of NCT. It wasn’t until NCT 2020 and the rebrand that they were included. People speculate that this is due to the relationships between China and South Korea. 
    • NCT Tokyo – SM just announced a reality audition show coming in July of 2023 to make and debut the last unit of the NCT multiverse. Shotaro and Sungchan will not be in this unit.
  • aespa: Girl group that debuted in November of 2020 with four members and the single Black Mamba. They also embraced a metaverse concept with having 4 avatar members to match the 4 humans. Their name mixes the words avatar + experience + aspect. Karina appeared in Taemin’s Want music video and danced several stages with him as well. Next Level came out in 2021 and took over the world by storm. They were invited to participate in Coachella in 2022. They were the first K-Pop group to perform at Governor’s Ball in NY in 2023. They announced a world tour and they are miraculously coming to Miami, so catch us being on our Next Level Savage bullshit on August 22!  
  • SuperM: SM has been the first to do a lot of things, and this is another first – they took the subunit concept up a notch and picked the top male artists from each of their active boy groups and they formed an avengers style supergroup named SuperM. This group is made up of Baekhyun (leader, EXO), Taemin (SHINee), Kai (EXO), Taeyong (NCT), Ten (WayV), Lucas (WayV), and Mark (NCT). This group was ideated as a fixed, permanent group, which became an issue when Lucas went on hiatus in 2021 due to a dating scandal. In May of 2023 Lucas announced he was leaving NCT and WayV, but there are no news yet on his status as a member of SuperM. Since Kai began his military enlistment in the same month, there is no rush or reason for the group to make a statement for the time being.
  • GOT the beat: if they had the first boy supergroup, you know they were going to also do it with girl groups, and so, the “Girls On Top” (GOT) project was born and GOT the beat debuted as a non-fixed (see what they did there?) K-Pop girl supergroup with top performers from all of SM’s active girl groups, including: BoA (soloist), Taeyeon (Girls’ Generation), Hyoyeon (Girls’ Generation), Wendy (Red Velvet), Seulgi (Red Velvet), Karina (aespa), and Winter (aespa). After their debut single Step Back, they released one mini album titled Stamp On It. There is no news of any changes to this unit for the time being.

Soloists: 

  • Hyun Jin-young: SM’s first artist and credited to have brought hip-hop to South Korea. *
  • BoA: the actual queen of K-Pop and don’t let anyone tell you otherwise. Discovered in 1998, debuted in 2000, and put K-Pop on the map with her international performances thanks to her ability to sing well in Japanese, English, and Mandarin. She’s done movies, TV, dramas, everything. Her discography includes  twenty-one studio albums (three of which were reissued), eight compilation albums, three extended plays (EPs) and numerous singles. She had a TV special with Britney Spears in 2003 (where TVXQ debuted!).

Ok, now that we know who has worked and is currently working for SM, let’s find out all the ways in which they have tried to put an end to that working relationship, and how much of those claims have been justified. This is what you’ve waited for. Let’s talk about SM’s top scandals.

Major Controversies & Scandals @ SM in the last 20 years

2003

  • *2003 Probe by Korean Government
    • SM Ent was investigated by Korean Government in 2003 for “systemic corruption in South Korea’s music business” 
    • Basically, big entertainment companies were paying millions of dollars to music executives to make sure their artists were given good spots on TV. These TV Execs were getting things from goodie bags, to company stock, to literally wads of cash in a maleta. 
    • SM Ent was alleged to have given stocks to TV execs before going public by faking sales as a way to make sure their artists were always treated well. 
  • *2003 Probe by Korean Fair Trade Commission
    • KFTC ruled that SM Ent. had abused its overwhelming negotiating power and left its entertainers no choice but to accept contract terms. 
    • For example, an artist (not named) had to pay in damages 5 times their contract amount, 5 times SM investment in them, 3 times the expected future profit, and pay an additional $100 million won if they decided to breach their contract.  
    • SM was fined about $885K. 
  • H.O.T.: * * HOT disbanded in 2003 because they could not come into agreement with SM. The math was basically that each HOT member would get about $10k for every 1 million copies sold. The members wanted to stay together but SM owns the name and they did not want to continue with the whole group once the 3 members left SM. *

2009

  • TVXQ & JYJ:*** 
    • The lowdown: 3 (JYJ) out of the 5 members took legal action against SM. They requested for the contract to be terminated based on illegal “life long contracts” (their contracts were for 13 years). They also said that their grueling schedule didn’t allow them to pursue anything else and they had little to no say in what they were scheduled to do. The members were also given 0.4% to 1% of album sales. If they terminated their contracts early, they would have to pay SM 2x what they were expected to make for the remainder of the contract (note: they were only on year 6 since debut and they were considered one of K-Pop’s biggest acts at the time).
    • *SM’s response: SM called the lawsuit a big fraud that was driven by the member’s greed instead of “human rights”. 
    • The conclusion: JYJ won the lawsuit against SM. *
    • Our take: FUCK SM. This was at the beginning of the Korean Wave. They really were mistreated. Sure, they committed some sins by doing business things without SM but they were just trying to make money. However, it ended up working out in SM’s favor because 2/3s of JYJ ended in pretty big scandals that would have been a headache for SM. 

2014

  • Girl’s Generation goes from OT9 to OT8 and says goodbye to Jessica:
    • The lowdown: Jessica was a member of Girl’s Generation, a group that debuted in 2007. She was scouted in a shopping mall and trained for seven years under SM Entertainment. In September of 2014, all the members of SNSD had signed on for another 3 years. On September 30th 2014 she posted to Weibo saying “I was excited about our upcoming fan events only to shockingly be informed by my company and 8 others that as of today, I’m no longer a member. I’m devastated – my priority and love is to serve as a member of GG, but for no justifiable reason, I am being forced out.” People thought she had been hacked, but that same day at a fanmeet the group had in China, she was the only one not present. She followed up her post with a comment about being deeply hurt by people she trusted. The two reasons it seems this happened was because either 1. Jessica wanted to marry her boyfriend Tyler Kwon, or 2. Because she had launched her own business: a fashion line called Blanc & Eclare. It was rumored that the members asked her to choose between GG or her fashion line. Other rumors also state that SM had asked her to keep quiet about her departure until the Tokyo Dome concert. SM was planning to say she wasn’t feeling well for the China fanmeet, but her Weibo post thwarted their plans.  
    • SM’s response: SM was quiet at first and dropped only vague statements, and then they finally announced Jessica was leaving the group. Their statement read:
      “This spring, due to her personal situation, Jessica said she would stop group activities after one more album. Despite Jessica’s sudden statement, Jessica and the Girls’ Generation members continued to work hard and carefully think over so that the team can continue to work in the best direction.
      However, recently with Jessica starting her fashion business while there was a lack of specific mediation regarding the interests and prioritization of Girls’ Generation’s activities, a situation has been reached where the team cannot be maintained, despite continued discussion.”
    • The conclusion: It seems Jessica was ousted although her wish was to remain a member of Girl’s Generation while pursuing her fashion line business. The dating rumor seems unlikely given that she was not the only member who was dating undercover at the time. She also wasn’t the only one taking a solo project, but this one was completely out of SM’s management, so therein lies the problem. According to Wikipedia, Blanc & Eclare merchandise is sold in around sixty stores in locations such as Seoul, New York, Beijing, Hong Kong, Bangkok, Taiwan, Shanghai, Tokyo, and Vancouver. In December 2016, Blanc & Eclare opened its first U.S. flagship store in the SoHo neighborhood of New York. In January 2021, a second flagship store was opened in Seoul, South Korea.
    • Our take: given Jessica’s two fiction books called Shine and Bright, it’s clear that aside from a few minor conflicts with two members of the group (which is to be expected in any group), she had a good experience overall as a member of SNSD and wanted to continue her career. Being forced out after 14 years can’t be easy, and she might have spoken out more if it weren’t for fear of SM retaliating against her younger sister Krystal, who was a member of f(x). 

2014-2016

  • The downfall of EXO-M:
    • The lowdown:
      In May of 2014, Kris Wu filed a lawsuit against SM Entertainment to nullify his exclusive contract with the agency, alleging that his contract with the agency is illegal. His legal team stated that Kris’ exclusive contract with SM Entertainment lasted 10 years from the beginning of his debut with EXO. His legal team claimed: “Compared to the usual contract with a Korean entertainment agency, it is one of the longest in existence. Because of the long-term contract, it is restricting his freedom, it is an anti-social and unlawful act.” 
      Luhan followed suit in October of that same year with a lawsuit alleging the same reasons. Luhan’s lawsuit revealed the discrimination that the Chinese members have faced, SM’s neglect of their health, and lack of financial compensation compared to their busy schedules. His legal team claimed “SM Entertainment has discriminated against Chinese members in EXO-M’s unit compared to those Korean members in EXO-K’s unit. Since EXO’s debut, SM Entertainment has provided EXO-K members with more chances for active promotion while EXO-M could not receive financial support during their inactivity.”
    • In August of 2015, Tao joined Kris and Luhan by using their same legal team to file his own lawsuit against SM. His lawsuit covered the same grounds as the other two by claiming that SM’s contract was unfair due to the duration of the contract, the discrimination the members faced, and the financial compensation they received. Tao’s father also became a loud voice during the accusations, claiming that among all of SM’s wrongdoings, the worst was not allowing his son proper time to recover from physical injuries and forcing him to do stunts and work while still recovering. 
    • SM’s response: SM Entertainment replied with lawsuits of their own in 2015 against the companies that employed Luhan and Kris Wu abroad, claiming the members had “been using EXO’s fame to participate in movies, advertisements, events and award shows. These activities have infringed on the rights of EXO members as well as SM and also caused extensive financial damages to SM and its partners.”
      SM’s statement read: “We have filed official lawsuits against companies that have been using Luhan and Kris, who are currently pursuing activities illegally, as advertisement models. We have taken this action to prevent Kris and Luhan from further pursuing their activities in an illegal manner and to prohibit further damages.”
      They also pursued legal action against Tao. 
    • The conclusion: Since it had been a year since Kris first filed against SM, the Seoul Central District Court appointed an official arbitrator and is forcing mediation for the contract nullification lawsuits against SM Entertainment by Kris and Luhan. All parties finally settled in 2016. 
      The legal feud between SM and Tao went on for a while. Tao won a lawsuit in China in 2016, but lost his lawsuit to nullify his contract in Seoul in 2017 before winning his second case in Chinese courts in 2018.
    • Our take: Kris, Luhan, and Tao were most likely justified in seeking to end their contracts, BUT, there were also some very attractive offers in China for them, so there were probably multiple elements at play to make that decision. Ultimately, Kris Wu ended up being the worst POS alive, so unfortunately, him leaving ended up being a win for SM.

February-April 2023

April 2023

  • SHINee + Shawols vs. SM:
    • The lowdown: SHINee turned 15 on May 25th 2023, which is a HUGE milestone. SM set up the anniversary fan meeting for May 27th at Kintex Exhibition Hall, which left a lot to be desired of the fans, because:
      • All seats are flat to the ground instead of as stairs so everyone can see
      • Some seats had obstructed view, but they weren’t listed with that info, so fans wouldn’t know if they were buying an obstructed seat or not. 
      • 5K capacity (SHINee can fill much bigger venues). 
      • SM had initially released info about a livestream for i-Shawols which they then removed without notice, creating confusion.
    • Shawols (usually known as the “chillest” fandom ever) hosted a twitter space meeting among themselves to come up with an action plan to let SM know this wasn’t right. The complaints started with trending hashtags (every day at 12 & 6PM for about an hour and a half) about their discontent: 
      • #전좌석_시야제한_샤이니팬미팅 (SHINee fan meeting where seats have obscured view).
      • #SM_샤이니팬미팅_장소변경해 (SM, change the location of SHINee’s fan meeting).
    • When SM first saw the complaints, they said Shawols should simply “choose seats carefully.” This type of reaction to their complaints prompted Shawols to create a Twitter account and put out a statement announcing they would boycott the fanmeeting if there was no response from SM by noon KST May 2nd. Their demands included:
      • Changing location of fanmeet.
      • Not to let the artists cover for sm, the company should take direct responsibility and apologize.
    • They also sent several protest trucks with multiple statements including:
      • “Stop deceiving Shawols”
      • “We should select seat tickets carefully? You start by selecting the right place first!”
      • “This time is different, we’ve been patient for 15 years”
      • “SM wake up”
    • SM would respond via posts on the Kwangya app, mostly dismissing the requests and poorly addressing the concerns:
      • They initially said they had booked another venue but due to member’s schedules and other BS, Kintex Exhibit Hall was the only available venue.
      • Beyond Live stream will be held.
      • They will put up the stage behind the pillar and members will be going around in moving carts so everyone can see them.
      • They’re discussing the places where visibility is limited to see what they can do about it.
    • With no definitive solutions listed, Shawols decided they could not accept this and put out a second statement with the following demands:
      • Immediate suspension of pre-sale, since no proper information has been provided and our requests were disregarded
      • Change the venue to a location of standards similar to KSPO dome
      • Feedback and apology from company directly
    • Shawols also decided to shop around with bigger venues themselves and discovered Jamsil Arena (with double the capacity) was actually available for the date of the fanmeet. They even got the requirements from the venue to apply.
    • It wasn’t until wind of the situation was caught by Naver and other news outlets that SM felt any responsibility to honor the fans’ requests. Truck protests continued. 
    • SM’s response: Cornered with threats of boycott (of the live show, the livestream, and related anniversary merch) and the news on them, SM had no choice but to oblige to the requests made by Shawols. Presales were postponed, and SM confirmed they were looking into a new venue. And yes, they apologized too. 
    • The conclusion: the fan meeting was held for TWO days instead of one at Jamsil Arena on May 27th and 28th. The second day was live streamed. 
    • Our take: Shawols took NO SHIT. Key & Jonghyun are so proud. 

May 2023

  • SM Lying about the Korean military changing laws to justify Kai’s untimely enlistment:
    • The lowdown: On May 3, SM Entertainment released a statement announcing Kai’s military enlistment which  read: “Kai was preparing for EXO’s comeback for this year, but because of a recent change in regulations by the Military Manpower Administration, he’s set to enter the army recruit training center on May 11.”
      Since SM claimed it was due to a change in military regulations, a spokesperson for Seoul’s Regional Military Manpower Association gave a statement saying “There have been no changes in the regulations. The postponement of enlistment for both ordinary citizens and celebrities is allowed up to five times within a two-year range.” Kai found out about his enlistment on the same day we did.
    • SM’s response: SM Entertainment cavalierly walked back their statement saying ‘There are changes in regulations, but we understand that this is not the case in all cases. It was no longer possible to postpone it.’ 
      What DID happen: the military was cracking down on evasions. 
    • The conclusion: Because SM was obviously at fault with their mismanagement of Kai’s extension requests, they set up a free fan meeting for May 9th so that Kai would be able to go on stage one last time  before his enlistment on May 11th and have a moment with the fans. It was live streamed, here’s a short clip from it. 
    • Our take: Fuck SM. Fuck SM. Fuck SM. No other idol was affected by this.

June 2023

  • EXO-CBX:** ** ** 
    • The lowdown: EXO-CBX [Chen, Baekhyun (AKA LOVE OF MY LIFE – LAURA), Xiumin] took legal action against SM based on illegal “life long contracts” [does this sound familiar? L-O-L (laughing through the pain)] and lack of transparency/breaking the law by withholding financial documents from their artists. EXO-CBX said that they not only signed 12 to 13 years contracts initially but that they were recently forced to extend the contracts making them 17 to 18 years long. 
    • SM’s response: They initially said that the members were only suing them because outside forces were trying to poach them and that they were using the contracts as “fake” reasons to legally leave the company. SM said that THE MEMBERS had access to the documents (only inside the building) but that they couldn’t provide copies to “outside forces.” There was this CRAZY back and forth when the new first broke between SM and the members, which was basically a she said, he said type of situation. 
    • The conclusion: SM and EXO-CBX settled and announced the news via a joint statement. SM took everything they said back. It’s all love and respect now… except from this one SM employee.
    • Our take: Gently fuck SM? Kumbaya? We aren’t quite sure about this. The conclusion was so amicable and out of nowhere that it makes us wonder if this was all a ruse, sort of like how us normal people try to leverage interviews and other companies’ offers to get paid more at our current company.
    • Today’s update:
      Killing Voice recording cancellation
      SM Denies that EXO Killing Voice was canceled due to one member

May/June 2023

  • NCT: Lucas, Shotaro, Sungchan, NCT Tokyo
    Lucas Controversy
    Shotaro and SungChan Announcement
    Fans Reaction to SM Rookies Reveal
    • The lowdown: This controversy is split into 2 separate issues that in the end meld into one same issue. Lucas was embroiled in a dating controversy where he was accused of cheating and gaslighting his girlfriends. He went on a 21-month hiatus. Shotaro and Sungchan debuted in October 2020 and… that was it. They didn’t participate in anything else and were not made permanent members of any subunit. In May 2023, Lucas announced his departure from NCT and WayV through a handwritten letter. A couple of days later, SM announced that Shotaro and Sungchan will not be part of NCT anymore and that they would debut later in a completely different group.  
    • SM’s response: They basically said it was Lucas’ choice. Regarding Shotaro and Sungchan, SM said that after speaking with them and to prepare for SM 3.0 they would be best suited for a group outside of NCT. They also announced that NCT will not continue to expand and that there would be one more NCT subunit, which would be debuting this year. It would consist of 2 existing SM Rookies and the rest would come out of a reality show competition called Last Start. 
    • The conclusion: Take it or leave it bitches. 
    • Our take: FUCK YOU SM. Fans were not expecting this at all. Shotaro and Sungchan were expected to debut as part of NCT Tokyo. SM isn’t scrapping NCT Tokyo so why remove 2 members fans hold dear? It just all seems so weird to add new members to a group that has been together for YEARS while removing 2 existing members. We both think Lucas will be better off as a soloist.

And last but not least, just like we did for all prior agencies, here are the branches, sub-labels, and other business ventures SM has to their name.

SM Branches, Businesses, and Sublabels

  • SM Studios
    • A holding company owned by SM Entertainment. 
    • Established on April 5, 2021 after SM restructured its affiliates to focus on its music business.
    • Manage drama, entertainment, and fields of new media.
    • Subsidiaries include:
      • Dear U (2021-2023?? Software development company that created Bubble messaging service) 
      • KeyEast (2021 – management agency founded by actor Bae Yong-joon)
      • Mystic Story (2021 merger of three entertainment companies: Mystic89, Family Actors Entertainment, and APOP. Now it has: music labels Mystic 89, All I Know Music and APOP, and an actor management label called Mystic Actors)
      • SM Culture & Contents (2021 – talent agency, television content production company, theatrical production company and travel company. Produces a ton of dramas, films, and K-Pop variety shows, and has a million actors and entertainers/presenters signed including Shin Dong-yup, Jun Hyunmoo, and Kang Ho-dong. Currently working a ton in partnership with JTBC)
      • SM Life Design Group (2021 printing, content distribution, and production company under SM Studios. It was originally founded in 1998 as KD Media, acquired by FNC until 2018 when SM acquired KeyEast & FNC Add Culture. Did dramas until 2019, has a few screenwriters signed)
    • The only produced work listed to their credit is Welcome to NCT Universe in 2022. 
  • Branches
    • SM Japan – Japanese branch of SM. It manages SM artists in Japan from exclusive licensing to merchandising to concert and fan meeting facilitation. It was established in 2001 with Avex. 
    • SM USA – American subsidiary opened in 2008  
    • SM True  – joint venture with True Corporation of Thailand 
    • SM Beijing – opened in 2012 
    • SM Indonesia – joint venture with Trans Media of Indonesia 
    • SM Vietnam – agreement with IPP Group to advance market in Vietnam 
  • Labels
    • Woollim Entertainment – merged with SM in 2013. Label home to Golden Child and Kwo Eun-bi. Former label with Epik High (early 2000s and 2010s) and Chaewon of Le Sserafim. 
    • Baljunso – acquired by SM in 2014. It is an indie label. 
    • Label SJ – exclusive label to manage Super Junior created in 2015. This was sort of like a “prize” in a way for staying together and to “give them autonomy”. 
    • ScreaM Records – EDM label established in 2016. Notably, it is home to DJ Hyo, Raiden, and IMLAY. 
    • Million Market – mostly hip-hop label acquired in 2018. *
    • Label V – exclusive label to manage WayV activities in China. 
    • All I Know Music – acquired in 2019, mostly hip-hop and R&B artists.  
    • SM Classics – a classical music label created in 2020 through a partnership with the Seoul Philharmonic Orchestra

And with that, we brought you the longest and most scandalous episode of our company-specific series. We have one more to go which will go live in just two-weeks’ time to close off this series and season 3.

Watch us be shook and in disbelief for almost two hours straight:

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