'%20x='0'%20y='0'%20height='100%25'%20width='100%25'%20%0A%20%20%20%20%20%20%20%20%20%20xlink%3Ahref='data:image/jpg;base64,/9j/4AAQSkZJRgABAQAAAQABAAD/2wCEAAMDAwMDAwQEBAQFBQUFBQcHBgYHBwsICQgJCAsRCwwLCwwLEQ8SDw4PEg8bFRMTFRsfGhkaHyYiIiYwLTA+PlQBAwMDAwMDBAQEBAUFBQUFBwcGBgcHCwgJCAkICxELDAsLDAsRDxIPDg8SDxsVExMVGx8aGRofJiIiJjAtMD4+VP/AABEIAAUACgMBIgACEQEDEQH/xABaAAEBAQAAAAAAAAAAAAAAAAAABwgQAAIBBQEBAQAAAAAAAAAAAAECAwAEBQYREyIyAQEAAAAAAAAAAAAAAAAAAAAAEQADAQEAAAAAAAAAAAAAAAABESEAMf/aAAwDAQACEQMRAD8AyLse3Z7ZreQZGeJwMvZTwhYUUQu3tGQgA/BCD5NT67xFnLdzufUFpXPA/AOmlKArkw1u3f/Z'%3E%3C/image%3E%3C/svg%3E)
On February 10, HYBE Labels officially announced that they have purchased 14.8% of shares in SM Entertainment for KRW 422.8 billion, or $334 million. HYBE’s chairman, Bang Si-Hyuk, purchased the shares from SM Entertainment's founder, Lee Soo-man, becoming the latter agency's largest shareholder.
The news comes just days after SM Entertainment, under current co-CEOs Lee Sung-soo and Tak Young-jun, announced a KRW 217 billion share sale to Kakao on Tuesday. This deal would have made Kakao the second-largest shareholder in the agency.
Lee Soo-man, who owns 18.4% of SM, has sold his shares to Bang Si-hyuk's label to avoid Kakao's ownership of a large chunk of SM Entertainment's shares and reportedly safeguard his position as the owner of the agency.
Bang Si-hyuk's deal with Lee Soo-man and consequently purchasing shares of SM Entertainment, indicating a new era for both agencies, has sparked varied reactions from across the K-pop community.
Fans react to HYBE’s Bang Si-hyuk and Lee Soo-man’s decision to join hands for the development of SM Entertainment
Fans have different opinions regarding this development. Some feel that Bang Si-hyuk did the right thing to make BigHit Entertainment an independent company so that no issues will arise for BTS in the near future. Other fandoms are reacting to the news in a different manner, stating that HYBE did not purchase SM but its shares.
There are a lot of opinions, among which some contemplate seeing idols of both agencies interacting together and meeting them at the agencies' buildings in the worst possible manner. Some are even finding it funnier that BTS members are the label's shareholders, so technically they own every SM artist, the reason being HYBE is now the largest shareholder of SM Entertainment.
In contrast, some fans are bluntly stating that HYBE has shares in SM Entertainment and they aren’t going to take over the company any time soon. It’s just their business to save SM from being owned by Kakao, one of the largest conglomerates in South Korea.
In a press release, Lee So-man and Bang Si-hyuk said:
“SM and HYBE decided to join hands as to push both agencies to the status of game changers within the global music industry. Together, we will maximize the global competitiveness of K-pop and strive toward a future-oriented, lifestyle platform business.”
HYBE further emphasized that the agency strongly agrees with Lee So-man’s vision of innovative ideas such as metaverses, sustainability, and their move towards a multi-label structure.
Bang Si-hyuk further explained the chaotic environment prevailing in the global music market and stated the role of SM Entertainment in the K-pop music world:
“In such a turbulent environment such as the global music market, SM Entertainment was a key agent which revolutionised Korea’s music industry and allowed for sustainable growth. The agency paved the way and established a firm foundation for K-pop to spread across the globe and planted the idea that K-pop was a new music genre to consumers around the world.”
Bang Si-hyuk's label wants to acquire up to 25% of Lee Soo-man's agency
As per reports, HYBE wants to acquire 25% of SM Entertainment. The sale and purchase agreement of both agencies involves a set of rules issued by them and stated:
Bang Si-hyuk's label will showcase their full support and cooperation in SM Entertainment’s structural and management revisions. Lee Soo-man terminated his producer contract with SM Entertainment in 2021 on the condition that he be provided with management royalties for the next three years. He stated that he would remove this clause of the contract and is willing to cooperate in the restructuring of the SM Entertainment industry.
In the company’s reorganization, various SM Entertainment affiliates have shown interest in transferring their shares to Bang Si-hyuk's label to showcase their cooperation, and in response, the latter will make significant investments in increasing the potential and efficiency of SM Entertainment’s internal management.
Last but not least, HYBE labels will publicly purchase independent SM Entertainment shares from different shareholders at the same price the agency has purchased Lee Soo-man’s shares and will offer the highest available price for the sale of their shares.
Graduates from one of the most prestigious universities in South Korea, Seoul National University, Lee Soo-man and Bang Si-hyuk plan to continue an active partnership in the growth and management of SM Entertainment.
