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On June 1, 2023, SM Entertainment released another statement detailing their contracts and rebuffing the claims made by EXO’s Chen, Baekhyun, and Xiumin. The explanation arrived on the heels of arguably the most shocking news in the K-pop industry when the three veteran K-pop idols announced a lawsuit against the agency through their legal representatives on the same day.
Lawyers for Chen, Baekhyun, and Xiumin made statements claiming that the agency was trying to push a nearly 17-18 years “slave” contract and had repeatedly refused to provide transparency of their payments and shares over the years.
SM Entertainment released a lengthy statement detailing and refuting the claims made by EXO-CBX, the sub-unit consisting of Chen, Baekhyun, and Xiumin. They stated that they provided the three singers with their payment process, talked about their exclusive contracts being “recognized for its validity and legitimacy by the Supreme Court” in a past SM artist’s ruling, and added that the current contract was created after long discussions with the trio’s lawyers.
SM Entertainment bounces back in a detailed statement to rebuff the claims made by EXO’s Chen, Baekhyun, and Xiumin
On June 1, 2023, Chen, Baekhyun, and Xiumin of EXO announced legal action against their agency, SM Entertainment, and requested to terminate their contracts. The news shocked the K-pop industry, especially the SM artists’ fandoms, as the theree singers were scheduled to have a full group comeback in the coming months. However, they first bore witness to Kai’s enlistment, which ultimately meant that it would not be a full group music release
Things turned worse after EXO-CBX accused SM Entertainment of not providing them transparent payment reports despite being with them for over a decade. The trio also called out the allegedly new contract as an unreasonable binding time that the agency was enforcing upon them.
To refute all the claims, the agency made a detailed statement giving explanations for each of the claims. SM Entertainment stated that they increased the EXO members’ salary rates twice during the current contract and that all the members were on equal footing with the agency when signing it.
1) Transparent payouts
EXO's agency, SM Entertainment, stated that claims of them not providing accounting data were false. They added that the artists can easily “view” their accounting data, and the artists had no issues previously with their set monthly payment process.
In addition, SM Entertainment mentioned that they received tip-offs of other agencies or external forces poaching them, which is why they denied giving them duplicate copies of the data for fear of unfair damage.
The agency added that they asked the legal representatives whether Chen, Baekhyun, and Xiumin had signed a double contract (with another agency) or were in discussions for the same. However, the trio did not reply and continued to say that they will terminate the contract since the agency wasn’t providing them duplicate copies of the data.
2) The exclusive contract legitimacy
SM Entertainment stated that their contracts adhere to the “standard exclusive contract” recommended by the Fair Trade Commission and the Ministry of Culture, Sports, and Tourism. This was further legitimized when the Supreme Court recognized its validity during the lawsuit filed by Huang Zitao (aka Tao), a former member of EXO.
The agency added that they have been open to their artists discussing contracts with other agencies by mentioning Girls’ Generation and f(x). They stated that former girl group’s members, despite some being with a different agency, participated in SM Family activities such as the SMTOWN concert. They also mentioned that second-generation artists such as TVXQ and Super Junior have also renewed their contract multiple times.
3) Regarding EXO’s current contract
SM Entertainment clarified that the EXO members had access to large-scale law firm lawyers, and the current contract was made with mutual agreements. They stated that the artists and the agency were in a lengthy period of discussion about the contract, which spanned from June 2021 to the end of 2022. SM Entertainment added that seven members of EXO renewed their contracts on December 30, 2022.
The agency further stated that they had exchanged and amended the contracts eight times in a month as requested by the artists’ legal representatives. However, the agency now believes that their tip-off was correct as they received a sudden notice about the contracts’ validity claimed by Chen, Baekhyun, and Xiumin’s recently appointed representatives.
Towards the end of the statement, SM Entertainment stated that they will take strong legal action to protect EXO and their fans from external forces that are trying “to shake and break up the team.”
Meanwhile, SM Entertainment claimed that the “external forces” was the entertainment company Big Planet Made or BPM. The company later denied the accusations, saying that MC Mong was not a part of BPM any longer. It also said that MC Mong only met up with his juniors as friends and had no intention of recruiting them.
