The Korea Herald


SM artists strive amid ongoing ownership feud, questions remain

Experts predict SM's partnership with Hybe to bring opportunities for SM and the industry

By Choi Ji-won

Published : Feb. 15, 2023 - 18:24

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NCT Dream (SM Entertainment) NCT Dream (SM Entertainment)

As major players of the entertainment industry scramble to get their hands on SM Entertainment, the label's artists are working harder than ever to keep things running.

SM Entertainment announced Wednesday that its boy band, NCT Dream, is embarking on a world tour, "The Dream Show 2: In A Dream." The concert series, which officially started in September in Seoul, is set to continue this month, extending to 22 cities across the world where the group will hold 32 shows.

With the tour, the seven-member band is also set to make its milestone dome debut in Japan -- an honorable feat many K-pop acts aspire to. NCT Dream's dome debut stage will take place on Feb. 17-19 at the Kyocera Dome in Osaka, Japan.

Onew, of SM's veteran group, SHINee, has also announced his comeback. Several local media outlets reported Tuesday that Onew will be releasing a new album on March 6. Ahead of the release, Onew is also set to hold his first solo concert in Seoul on March 3-5. In an announcement about the concert on Monday, SM also said Onew is gearing up for his March comeback.

Another member of SHINee, Key, released his second LP re-issue, "Killer," on Monday and has been busy promoting the album.

During his comeback live show, streamed online on Monday, Key openly commented about his company's ownership feud. Replying to a fan's request for an encore concert for his ongoing concert series, Key said, "I'm the one who really badly wants to hold an (encore concert), but I don't know. Things (inside the company) are uneasy."

SHINee is celebrating its 15th anniversary in May and there have been hints at a group comeback. In December, during an interview for Netflix's "The Fabulous," the quartet's member, Minho, who is also pursuing an acting career, said SHINee is planning to release a studio album around their debut anniversary. Onew also confirmed this in a separate livestream show.

SHINee's group comeback comes after two years as the group's youngest member, Taemin, is set to be discharged from military in April.

SM Entertainment's biggest boy band, EXO, is also heating up for solo and group comebacks. With Baekhyun returned from the military on Feb. 5, members of EXO have constantly alluded to the possibility of the group's comeback this year.

Before returning as EXO, Kai is set to release a new solo album mid-March.

With Taemin and Baekhyun back from their duties, Super M, SM Entertainment's "avengers" project boy group, is also expected to resume its global activities. Super M is a seven-member group consisting of some members from SM's boy bands EXO, SHINee, NCT 127 and WayV.

Rookie girl group, aespa, has scheduled its standalone concert debut for Feb. 25-26 in Seoul, while the label's longest-running K-pop act, BoA, is slated to hold her 20th anniversary concert on March 11-12.

SM also has plans to debut new groups this year, including the long-awaited launch of global variations of the NCT project in Hollywood, Tokyo and Saudi Arabia, as well as possible introduction of a new girl group.

SM Entertainment / Hybe SM Entertainment / Hybe

Will Hybe take over SM?

All of the acts mentioned above are groups that were planned, conceptualized and assembled at the hands of SM Entertainment's founder Lee Soo-man, who stands at the center of the controversial merger and fight over the acquisition of the label.

Once the biggest shareholder of SM Entertainment, Lee on Friday signed a deal with Hybe to sell his 14.8 percent share of SM Entertainment at 422.8 billion won ($334.28 million) to Hybe, conceding the position of top stakeholder to the firm.

Lee's alliance with Hybe came a few days after IT conglomerate Kakao announced an M&A with SM, through which it acquired a 9 percent stake of the K-pop powerhouse, becoming SM's second-largest shareholder.

Concerns about the mixing of two completely different companies, as well as market domination by the newly formed partnerships flooded from fans and industry insiders alike. But Hybe made it clear that it will guarantee the full independence of SM.

Neither will Lee, who continues to hold a 3 percent share in SM's stakes, be participating in business management and production, or taking any royalties from the label, said Hybe's CEO Park Ji-won during a conference with the firm's employees on Monday.

The future of SM now lies in the regular monthly board meeting next month in which new executives are expected to take the helm of governance. In March, four board members of SM will end their terms, including the current co-CEOs Tak Young-jun and Lee Sung-su, who had joined forces with Kakao.

Rumors spread about Hybe's label Ador's CEO Min Hee-jin and Hybe's founder Bang Si-hyuk joining SM's board, but Hybe denied them, saying "they were too busy." Min worked with SM for over a decade as the visual director before joining Hybe in 2019. Bang, also the executive producer of Hybe, is the mastermind behind the superstar band, BTS.

Whether the court will accept Lee's request for injunction against Kakao acquiring a stake in SM -- claiming it is illegal for the board to issue new stocks and convertible bonds to a third party without his consent -- is another lingering issue. The court decision is due to be announced before March 6, when Kakao is set to complete its payment for the stakes.

SM Entertainment's founder Lee Soo-man (SM Entertainment) SM Entertainment's founder Lee Soo-man (SM Entertainment)

Experts foresee future for SM

While uncertainties remain, experts predict the new K-pop pact will bring promising changes to not just the companies themselves, but to the K-pop scene as a whole.

"SM is a legacy label so it holds prosperous intellectual properties and is backed by a long-held fandom. This could play as a big opportunity for Hybe in expanding its content," a pop culture critic based in Seoul, Kim Heon-sik, said to the Korea Herald.

"In the case of SM, its business has mostly been focused in Asia, mainly in China, and this hasn't been easy in recent years due to China's ban on the Korean Wave. Hybe, on the other hand, has set a stable ground in the US market. Hybe could learn from SM's years of management, whereas SM could benefit from Hybe's global network," he added.

Kim, however, agreed this would be the ideal scenario and whether Hybe could actually guarantee the independence it had promised to SM remains to be seen.

"The two companies follow a significantly different style. And while this could intimidate SM, Hybe is also attempting a new type of management by taking in SM, so there are risks for both. It's important to find a way for SM to thrive in its own way under Hybe's roof and secure diversity under its multi-label system," Kim explained.

Music critic Im Jin-mo cautiously stated that such a partnership may have become an inevitable step for the domestic labels as K-pop continues to expand aggressively inside the global music market.

"(Through Hybe and SM's alliance) K-pop has taken an advantageous position in its globalization. So, in terms of the industry, it may become a beneficial game-changer," Im told the Korea Herald.

Putting aside the concerns of a power struggle, Im stressed this could become an opportunity for SM to regain its old honor as a legacy K-pop brand.

"SM had become too heavy," Im said. "Until now, SM had too many businesses to take care of other than music. It may seem like SM is getting slimmed down, but this may be a chance for it to focus on making good music. We all know SM has potential. Through the right reformation and renovation, SM can refurbish its system to nurture good artists and good productions."