HYBE-ADOR Disagreement, Possible Expense For NewJeans Contract Termination Investigated

It seems that ADOR is getting ready to separate from its parent business, HYBE.

This conjecture emerges from the fact that NewJeans’ contract has a long way to go, but independence appears to be gaining traction. Since June of last year, there has been controversy over Min and the ADOR management’s attempt to seize control, with comparisons to the scenario involving the girl group FiftyFifty.

Because terminating the contract with NewJeans could result in significant penalties, Min Hee-jin, a significant shareholder in HYBE, is laying the groundwork for a lawsuit to avoid contract termination charges.The fines associated with establishing a new organization are anticipated to be substantial, even if it may be possible to raise money from overseas investors to pay them.

Since NewJeans made their debut in 2022 and K-pop groups often have contracts that last seven years, they have roughly five years left on their deal. The Korean Fair Trade Commission’s standard contract states that fines are determined by multiplying the average monthly revenue over the previous two years by the number of months left in the agreement.

The fine may surpass several hundred billion won, given that NewJeans had 60 months remaining after their launch and had recovered their investment in two months.

Industry insiders stated that while agency-specific investments in female groups vary, they often fall into the region of 7–10 billion won (about 5-7 million USD). Indeed, reaching sales of at least 7 billion won in just two months indicates that the average monthly income in 2023 is probably going to rise considerably more as activities pick up. A straightforward calculation based on the normal exclusive contract would come to 210 billion won (about 155 million USD), even if the initial monthly revenue was at least 3.5 billion won (approximately 3 million USD).

The FiftyFifty exclusive contract controversy that rocked the entertainment sector a year ago is comparable to the ADOR situation, suggesting that similar disputes might occur. Despite these similarities, HYBE’s capacity to step in might be less than in the FiftyFifty case if NewJeans were to break their contract, especially given that NewJeans now plays a minor role in domestic activities.