SM Entertainment and slave contracts are not a new 'couple' in the K-Pop industry. Issues around long contracts that bind artists for years have emerged since the first generation of K-Pop groups from the management. Although it is not only SM Entertainment that allegedly enforces slave contracts but most entertainment management in South Korea.
SM's status as one of the big companies cannot free them from the spotlight. Chen, Baekhyun and Xiumin's decision to terminate the contract with SM Entertainment, which was revealed in early June 2023, is also related to the issue of slave contracts. This incident is like repeating what happened to TVXQ several years ago.
Apart from contract problems, EXO-CBX's decision to end its exclusive contract with SM Entertainment was also because management was not transparent about payment data. Attorney for EXO-CBX, Lee Jae Hak, expressed his views on the contract system that SM Entertainment uses for their clients.
He explained, SM Entertainment 'enclosed' their artists in a contract that is much longer than permitted by law "They had previously signed an exclusive contract with SM Entertainment for a duration of 12 to 13 years. This is far from the seven-year contract approved by the standard contract law for artists.
This long contract is unprofitable for artists because it exceeds reasonable limits," said Lee Jae Hak in the official statement. Lee Jae Hak continued, SM Entertainment is even trying to get their artists (including EXO-CBX) to sign long contracts with a duration of up to 18 years. So according to the lawyer, SM Entertainment was taking advantage of their position as a company unreasonably.
Allegedly, SM Entertainment is also trying to continuously renew contracts with its artists even before their exclusive contracts expire. Then there is a part in the SM artist contract that states 'artists must complete a number of albums during the contract, and if the album is not released during the active contract, the contract will be extended until these conditions (album release) are met'.
This is also considered problematic because in the end the contract will automatically be renewed if an unexpected situation or condition causes the album release to be delayed. The absence of a maximum limit on the contract made Lee Jae Hak believe that SM's efforts to bind their artists were like slavery.
"Furthermore, in such an unfair and binding effort, SM Entertainment did not even provide a down payment before extending the exclusive contract. Therefore, EXO's Chen, Baekhyun, and Xiumin are seriously considering submitting a report to Fair Trade Commission on these contracts," he concluded.
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