Editor’s note: This is the first of a 2-part article written by a Korean-American lawyer.
Spanish translation by our reader Bea is available (traducción en español aquí) HERE
JYJ and the Law on the American Agency, Part I
Among the Korean celebrities that I have been following with interest lately are the three members from Dong Bang Shin Ki who have since formed the group JYJ. Although they are undergoing difficulties now, their current situation when examined through the eyes of the law is piquing my interest and leaving an impression. Even if they, with their handsome faces and flashy dance moves combined with their stellar vocals, never find out.
What drew my attention the most was how these young and weak men were fighting against the organised strength of the Korean entertainment industry. Bringing up the issue of “slave contracts”, they filed a lawsuit against SM Entertainment, the company that raised them, and the minute they started activities independent of that company their promotions were blocked here and there as if those doing the blocking were lurking in waiting for them. (The legal implications and meaning of those restrictions will be dealt with in further detail later)
It’s clear that SM is smarting from the incredible loss they’ve incurred through the separation of Dong Bang Shin Ki, and, claiming to avenge the honour they lost through [JYJ’s] ungratefulness, they are also at the same time sending a message to their up-and-coming idols, “if you do the same thing [as JYJ], you’re dead.” SM might as well stand for Small Mind.
It is doubtful that SM’s small-mindedness will be cured on its own. SM is a highly successful big entertainment company that undoubtedly knows the importance of image but is staining its reputation by obsessing over a prey that’s already fled; it’s a kind of behaviour I find hard to understand. But perhaps it’s because there is more at stake than simply an urge for revenge and the need to send a clear message.
The world is wide and their talents are manifold for the idol group that [SM] lost, while younger and fresher idols don’t yet measure up. In any case, the career lifespan of an idol is short and when considering that the members of JYJ are now in their mid-20s it is even more difficult to accept SM’s position. There’s more to all this than fear of setting a judicial precedent on “slave contracts.” Because already within SM the basic contract is being modified without a hitch. There’s already legal precedent regarding 13-year exclusive contracts, and even in the US, the biggest and strongest market for entertainment, the limit on contract length is clearly stipulated in the law as 7 years. It is inevitable that this shift in thinking will also come here. And not just for SM but for other similar entertainment companies…whilst the KFPCAI is attempting to paralyse JYJ and dress them in the clothes of social criminals. Why is that?
In my opinion, it is because JYJ is introducing the idea of the American-style “agency” as an alternative, which threatens to erode the influence and market share of the big Korean entertainment companies.
The key point of view here is not why or how JYJ pulled out of SM but how they (JYJ) are going to succeed in pulling out of the established mold.
This is to say, JYJ’s success could lead to an increase in celebrities/artists who choose to operate with the American-style “agency”. Faced with the special qualities of the “agency”, existing Korean companies are afraid that they will soon face extinction.
The concept of the “agency” turns existing company-celebrity relations on its head. Until now, the management company is the owner and the celebrity is the owned, but under the structure of the “agency” the celebrity becomes the owner and the management company the hired hand. The law in the United States regarding the status of the “agency” is robust with a long history. And the relationship between the “agency” and their signed celebrities is known in legal parlance as that of the Principle Agent. I will now proceed to describe this relationship.
1. The agent (*in this case the “agency”) can only act with the permission and approval of the principal (*in this case JYJ); it cannot go beyond the requests of the principal or attribute any legal responsibility for its own wrongdoing on the principal.
2. The agent is obligated to fulfil the tasks assigned to it [by the principal].
3. The agent is obligated to fulfil the tasks entrusted to it ‘with care and due diligence’
4. There must be no conflict of interests in the contractual relationship between the principal and the agent.
If the American-style “agency” spreads, it will inevitably confer more rights to working entertainers, and those who make a living on the talents of these entertainers will no longer be able to have it all their way. This is why Korean celebrity management companies are hoping for, praying for, JYJ to fail, so that it would be announced to the entire world that in Korea one cannot survive without the management company, no matter how beautiful or ugly one is. And this is probably why, throwing all consideration of company image aside, [SM] is doing all it can to deprive JYJ a chance at success.
It is true that the system itself in America is different from that in Korea. The practice of entertainment companies at the scale of Korea’s that train idols to place on the market does not have a direct equivalent in the US. However, this does not mean that the legal protections guaranteed under US law in the realm of show business cannot be applied to the practical reality of the Korean entertainment industry.
First of all, it’s just a matter of scale, as there are plenty of small and mid-size management agencies/companies in America that scout and train emerging talents and handle the career development and marketing for the success as well as the protection of their stars. The songs, choreography and other miscellaneous affairs will be handled through liaising with the singer’s agent. In fact, these companies exist solely for this liaison. However, the agency does not exist solely to “pour coffee” for the artist either. The majority of big management agencies in America make most of their revenue by taking on the role of assistant to a certain number of big-name stars, then reinvest some of that profit into scouting, training and supporting rookie artists. American agencies also cooperate with their more famous signed artists to secure radio and media spots for their debuting artists.
In any case, a nameless singer is a nameless singer anywhere. Just as debuting in America [where there is a better system] as a rookie doesn’t guarantee one success, relying on the strength and influence of one’s management company as opposed to one’s talent in Korea doesn’t always bring success either. Just as the three members of Dong Bang Shin Ki did not reach their current level of fame on their own, American stars likewise rely on the professional and systematic investment and support of their management agencies. The difference is simply in the degree of that investment and support.
Unlike in Korea, there is no unilateral provision of living quarters, daily necessities, plastic surgery costs, etc. for trainees. The majority of America’s rookie artists are required to chase their career on their own two feet in terms of living expenses (and here it is the duty of the agent to assist in this by making/arranging as many opportunities for the rookie to showcase his or her music as possible), and in the beginning it is possible that the management agency takes more money from the artist than it gives back. Because no one sets up a business to lose money. Even so, even with the special case of rookie and debuting singers factored in, agencies tend to lose more money in the beginning of promoting such artists than they gain, which is why they include a “sunset clause” in their contracts (translator’s note: A sunset clause is, “A statutory provision providing that a particular agency, benefit, or law will expire on a particular date, unless it is reauthorized by the legislature.” source: Legal Dictionary).
I don’t know how much money SM dispensed to train the members of Dong Bang Shin Ki. I also don’t know if the Dong Bang Shin Ki members received a set salary from the get-go, or if they only received bare-minimum stipends, if they had no other source of income when they were trainees except what was distributed to them by their company, or if whatever they received was enough to cover their basic living necessities. However, regardless, even if SM spent a significant amount on “raising” the members of Dong Bang Shin Ki, this is not the priority issue. Although they do spend less on the practical aspects of rearing talents compared to the big Korean companies specialising in idols, American agencies are not any less free of short-term loss or financial risks. In essence, they are no different from the Korean companies in that they also have to invest in no-name artists whose talents have yet to be fully verified. Nevertheless, in American culture “the concept that the investing management company has ownership of the artist” is simply unacceptable. Instead, the relationship is seen as a partnership uniting the “talent” of the artist with the “support” of the management. I personally don’t understand the logic, “because I raised them I naturally have the right to eat them alive.” I don’t see the logical or evidentiary connection between the fact that these big entertainment companies invested in an artist in the early years and the need to degrade the status of artists to mere property.
Naturally, companies aren’t expected to survive on dirt but exist to make a profit, and only making a profit guarantees continued investment into rookies. However, it is still possible for this to take place in the context of a relationship between equal partners and not one of owner and owned and in the context of negotiation on the distribution of profits. In the case of SM and Dong Bang Shin Ki, SM would have received and did receive as profit many times or many hundred times over the amount they invested in Dong Bang Shin Ki anyway. Therefore, there is no reason for current existing Korean entertainment companies to impose on artists an ‘owner and owned relationship’ in a patriarchal setting, and there is no rationale as to why these companies can’t treat their signed artists as equals.
Secondly, one notices that the relationship between the idols and their management company in Korea is like that between a company and its workers. This is correct. That’s also what I thought. The problem is, this is an outdated and anachronistic relationship. In America too a similar relationship existed—it reached its peak in 1930-40 (also known as the Golden Age of cinema)—centred around the “studio”. In those days, exactly like it is in Korea today, MGM along with five other big and influential companies in Hollywood scouted and raised talents, attributed to their celebrities the status of property and controlled every aspect of their professional and personal lives. Notably, these stars, even if they reached a phenomenal level of fame and success which increased their market value, could not re-contract with any other studio due to their 10-year long exclusive contracts. This was finally put to an end when the state of California passed a law restricting the length of contracts to 7 years maximum. This legislation is often referred to as the “7 Year Itch law” after the famous film starring Marilyn Monroe.
The Golden Age of the American entertainment industry passed as well as the system that manufactured stars. Instead, a system centred around the freedom of entertainers and their independence took its place. However, this was not just because of the “7 Year Itch law” of California. In the case of New York, even without civil legislation on the matter, the courts uphold the claims and requests of artists to have their contracts invalidated easily. In America, there hasn’t been any legal precedent set in the area of “long-term contracts” of entertainers in the last 20 years. There is no concept even of the slave contract. Why? Is it because Americans are more morally developed and ethical than Koreans? No. It is simply because Americans believe that capitalism is best realized when artists, in a free and fair market and system, are given respect and competition is not threatened by the fattening of two or three dominant corporations.
Written by: Junebug of Junebug36
Translated by: Jimmie of TheJYJFiles
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