Overview:
SM Entertainment (SM) is embroiled in a legal dispute with EXO members Chen, Baekhyun, and Xiumin (collectively known as ChenBaekXi). The trio has filed a lawsuit to terminate their exclusive contracts with SM, citing unfair contract terms and lack of transparency in financial settlements.
Background:
ChenBaekXi claims that SM forced them into excessively long contracts and failed to provide transparent financial settlements. They allege that SM did not disclose clear earnings reports and used its dominant position to impose unfair terms, including contract extensions beyond industry standards.
Key Issues:
Unfair Contract Duration:
- ChenBaekXi argues that SM's contracts span 12-13 years, far exceeding the Fair Trade Commission's recommended seven-year limit for pop culture artists. SM allegedly pressured them to extend these contracts to 17-18 years, especially for overseas activities.
Financial Settlement Transparency:
- The trio requested detailed settlement reports multiple times, but SM allegedly failed to provide these documents. They claim that SM's lack of transparency indicates potential financial misconduct and unfair payment practices.
SM's Response:
SM Entertainment refutes these allegations, asserting that external forces are influencing ChenBaekXi to make misguided decisions. SM claims these external entities are engaging in illegal activities to lure their artists away and violate their exclusive contracts. SM has vowed to take all necessary legal measures to counteract these influences.
Future Outlook:
ChenBaekXi plans to file a formal complaint with the Korea Fair Trade Commission, aiming to address what they perceive as widespread unfair practices affecting other SM artists as well. This legal battle could become a significant turning point in the industry, highlighting issues of artist rights and contract fairness. Both parties are preparing for a protracted legal confrontation, with the court's decision likely to have broader implications for the entertainment industry.