EXO-CBX’s agency INB100 accuses SM Entertainment of unfair demands, latter retaliates

By: Gelene Peñalosa - 6 months ago

On June 10, 2024, representatives from EXO-CBX’s agency INB100 held a press conference that ultimately “waged war” on SM Entertainment for the latter’s violation of the agreement they had with the EXO sub-unit in a dispute in June last year.

The press conference was led by INB100 CEO Kim Dong-jun, p_Arc Group chairwoman Cha Ga-won, and Attorney Lee Jae-hak, where they had addressed points of SM Entertainment’s “unfair treatment and demand” towards Kim Jong-dae (Chen), Byun Baek-hyun (Baekhyun), and Kim Min-seok (Xiumin).

Prior to it, a statement from INB100 was released which detailed EXO-CBX’s dispute with SM Entertainment in June 2023 and their amicable settlement.

Through this settlement, the EXO-CBX members’ sub-unit and individual activities was to be managed by INB100, the company founded by Baekhyun, and their group activities with EXO were to continue with SM Entertainment.

However, according to INB100, SM Entertainment had broken their promise “that it could not keep and committed what could be perceived as fraud.”

In Cha Ga-won’s words, SM Entertainment had allegedly promised that EXO-CBX would only need to pay a 5.5% fee should they distribute their music through Kakao—the majority shareholder of SM Entertainment—under INB100.

The usual fee that companies outside of Kakao are required to pay is usually 15-20%.

Now, INB100 claims that SM Entertainment had gone back on their word, “defaulted” on the 5.5% fee that was promised, and are now demanding a 10% revenue from the EXO-CBX members’ individual activities such as concerts, album releases, etc.

Attorney Lee Jae-hak pointed out that this promise was not in the written contract but was “verbally promised” by former SM Entertainment CEO Lee Sung-soo. According to him, under the Korean legal system, “a verbal agreement is an agreement that is seen as legally binding.”

At the same time, INB100 is now demanding SM Entertainment to fully disclose EXO’s earnings. This mirrors EXO-CBX’s dispute with SM Entertainment from last year. According to Attorney Lee Jae-hak, SM Entertainment had only allowed EXO-CBX to “come into the office and read the files” instead of providing them with their own copies.

The act is against the law, as said by EXO-CBX’s legal representative, but “for the sake of EXO and EXO’s fans”, Chen, Baekhyun, and Xiumin decided not to fight it.

INB100 had also sent a formal complaint letter to SM Entertainment, outlining their demand for the company to keep their word on the 5.5% fee and to provide the EXO-CBX members a copy of the documents they requested.

The press conference also revealed surprising information, such as the EXO-CBX members not being paid for their participation in recent EXO activities, and SM Entertainment pressuring EXO members to renew their contracts while doing their military service.

In response to the press conference held earlier, SM Entertainment made a lengthy statement that denied all the points made by INB100. The following is a condensed version based on the translation provided by Soompi:

1 MC Mong and Cha Ga-won denying tampering & claiming to be a relationship that is more than family: MC Mong and Cha Ga-won had been approaching artists with valid contracts, EXO-CBX included.

Following this and despite the exclusive contract still being valid, SM Entertainment allowed EXO-CBX to have their individual activities under a new agency, and EXO-CBX “personally signed” the agreement to pay the 10% of their revenue.

2 CBX enjoys the rights/benefits as EXO members but ignores promises/obligations: The 10% payment is the standard that was implemented following the contract dispute with EXO’s former Chinese members. This was mutually discussed and finalized.

However, in the case of INB100 which was revealed to be a subsidiary under MC Mong and Cha Ga-won, and after being sent a certification of contents which says that the agreement “need not be upheld”, it seems that the EXO-CBX members “want to enjoy the rights and benefits as EXO members but not fulfill their obligations.”

3 Distorting our multifaceted efforts to protect EXO despite financial losses: The claim by INB100 about the distribution commission rate being unfairly handled is not true. SM Entertainment does not have the authority to determine the distribution commission rate, and EXO-CBX were the ones that asked to include this as a condition in their agreement.

SM Entertainment also said that they had “made accommodations” for EXO-CBX such as allowing Baekhyun’s solo album to be released under INB100 and their covering of the cancellation fee of Baekhyun’s supposed Japanese concert. Also, EXO-CBX and INB100 had signed contracts “under favorable conditions” with another distribution company, with everything proceeding smoothly.

SM Entertainment ended their statement saying, “We will not tolerate CBX’s actions of repeatedly claiming that the exclusive contract and subsequent agreement are invalid to pursue their own interests. While they try to justify their wrongdoings through manipulation of public opinion, we will calmly respond according to the law and principles and hold CBX accountable through the courts.”

EXO-Ls were appalled with all this information and rallied in their support for EXO and EXO-CBX. At the same time, fans were calling out anti-fans for their out-of-place comments on disbandment and were telling them to keep out of the conversation.

The situation continues to unfold, with both sides standing firm on their positions and legal battles looming on the horizon.

 

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