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EXO in crisis: Baekhyun, Xiumin and Chen to sue SM, end contracts

SM denounces EXO members' actions as "illegal acts" by "outside forces," warns of strict legal repercussions

By Choi Ji-won

Published : June 1, 2023 - 14:34

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Exo (SM Entertainment) Exo (SM Entertainment)

Baekhyun, Xiumin and Chen of EXO are leaving their longtime agency SM Entertainment and embarking on a legal battle to claim unsettled payments.

The legal representative of the three artists on Thursday announced that the EXO members have notified SM Entertainment of the termination of their exclusive contracts with the agency.

"Since March 21 until recently, we have repeatedly requested SM to provide copies of materials and evidence for payments," the representative, attorney Lee Jae-hak of local law-firm Lin, said through a statement. "But SM has maintained its unreasonable stance to not provide the documents," he added.

"Therefore, as of June 1, today, we notified (SM) of the nullification of the (three artists') existing exclusive contracts with SM," the statement read.

According to the details spelled out in the statement, the three artists' exclusive contracts stipulate SM must pay them two times a year and provide the settlement records and evidential documents accordingly.

But, over the past 12-13 years that Baekhyun, Xiumin and Chen have been affiliated with SM, the company has not provided the proper materials, only arbitrary documents. Recently, the artists requested the undue documents through the lawyer, but SM rejected the request.

Citing a precedent, the statement claimed that the agency's failure to provide the settlement materials as stipulated in the exclusive contracts is a reason for the artists to request nullification of their contracts.

The statement said the three artists plan to file a lawsuit against SM for outstanding payment and may take other legal action if necessary.

"If SM had reimbursed (the three members) correctly, then there would be no reason at all for it to not send the requested documents," the statement continued, adding, "If other artists under the SM agency have also not been receiving their payment details and evidence as in the case of Baekhyun, Xiumin and Chen, then this problem is not limited to only these three, but affects all of SM's artists."

(From left) Exo's Baekhyun, Xiumin and Chen (SM Entertainment) (From left) Exo's Baekhyun, Xiumin and Chen (SM Entertainment)

The lawyer also claimed SM is "committing tyrannical acts" against the artists, allegedly forcing them to sign contracts with unreasonable terms, using the company's superior status to control them.

"While signing a long-time deal of 12-13 years with its artists, SM made its artists sign another exclusive contract for when the initial contract term comes to its end, leading to prolonged terms of at least 17-18 years," the statement read.

Considering the years many artists spend as trainees at the label before their official debut, artists often feel that they are forced to sign so-called "slave contracts" spanning nearly 20 years by SM, the statement added.

About this, the statement referred to a Fair Trade Commission rule stipulating that contracts between agencies and artists cannot exceed seven years. The 12-13 years in the original contract is already "far too long and surpasses a reasonable level," the statement asserted.

"Such long, exclusive terms excessively restrain the artists' personal rights, which may face regulation by law as an unfair practice according to the Monopoly Regulation and Fair Trade Act," the statement continued.

On top of the aforementioned legal actions, the three bandmates are considering filing a petition to the Fair Trade Commission.

On the last page of attorney Lee's statement, Baekhyun, Chen and Xiumin apologized to fans and asked for their continued support in spite of the situation.

"We feel scared and daunted in taking this first small step to talk about the unfair treatment (we have faced) until now. ... Please realize the courage it has taken us (to do this). We're truly grateful to all the fans who have supported us for a long time," the three said in the collective message.

SM Entertainment SM Entertainment

SM soon released an official statement on Thursday morning that seemed to refute the allegations made by the three EXO members.

While avoiding direct mention of the alleged accusations or the names of the artists, SM said it has discovered "some outside forces" who are trying to coerce its artists into making the wrong legal decisions.

"We have discovered that these outside forces are not only luring the artists to breach the valid exclusive contracts they have signed with the company, but using them to get through to other artists to also violate the contract terms or sign double-contracts," SM said in its statement.

"We will take legal action against these people who pursue only their greed and profit without any profound interest in the future or the rights of the artists," SM said.

Meanwhile, a local entertainment outlet Ilgan Sports on Thursday reported that SM sent a certification of content to the local music label Big Planet Made claiming the agency's involvement in Baekhyun, Xiumin and Chen's legal dispute against SM.

Ilgan Sports claimed in its report that BPM had approached and tried to sign deals with the three EXO members, who were already tied to SM under renewed contracts at the time.

BPM outright rejected the accusations through a press release that afternoon.

While acknowledging it has received a certification of content from the CEO of SM recently, it denied contacting the EXO members and negotiating any contract terms with them.

EXO is an eight-piece boy band that debuted under SM Entertainment in 2012.