[August 4 2009] Broadcast on Dong Bang Shin Ki’s Lawsuit

Spanish translation for this article is available HERE (traducción en español aquí), courtesy of our reader Bea.

Editor’s Note: On August 4, 2009 radio host Son Sok Hee, interviewed Yang Seong Hui, a journalist from the Culture Department of The Joongang Daily, regarding the cultural and societal issues that were raised by ChunJaeSu’s lawsuit. Even though this interview was conducted over a year ago, we felt the need to share this with our readers for it provides a good explanation of the financial and personal costs of the idol industry. Additionally, Yang Seong Hui provides the rationale behind both the artists’ and their management company’s actions. A definite must read. The link to the audio file from this radio show can be found HERE.

August 4, 2009 Son Sok Hee’s Main Focus – Broadcast on Dong Bang Shin Ki’s Lawsuit

English transcription by: Jimmie@TheJYJFiles

Son Sok Hee:

Today’s Part 4 of the show will focus on the latest news from pop culture. Popular group Dong Bang Shin Ki is in the midst of a conflict with their management company. And it is creating quite an impact in pop culture, so we will be discussing it today.

Dong Bang Shin Ki members Youngwoong Jaejoong, Micky Yoochun and Xiah Junsu; they might not be familiar names to our listeners, but amongst the teen population they are extremely famous people. These three people have filed an injunction request for the invalidation of their exclusive contracts against their management company SM Entertainment. The length of their exclusive contracts is 13 years, which they argue make them lifelong contracts. They claim that they haven’t received just compensation from their management, once again raising the issue of the unequal relationship between singers and their management companies, sometimes dubbed slave contracts, which in any case is thickening the intrigue and shock with regards to unfairness in the industry.

Dong Bang Shin Ki is not only a high-profile group in Korea but also in Japan. In any case, because this is a conflict between Korea’s biggest company and one of the most famous groups, I am curious about the details and background to it all.

We have via connection Yang Seong Hui from the Culture Department of the Joongang Daily. As I said earlier, the three members have announced that they have filed an injunction request for the invalidation of their exclusive contracts. Why all of a sudden now?

Yang Seong Hui:

They filed the injunction on the 30th of last month and speculations of disbandment have started to come out, but the members have pointed many months before already that that their exclusive contracts are unfair and have asked SM to revise it but since SM refused after a certain point they have gone to court. As you mentioned before, because Dong Bang Shin Ki is at the height of their fame in Japan, to the extent that they were able to stand on the stage of their dreams (the Tokyo Dome) and be accepted as top-class singers, this news has come as a big shock to fans and the music industry. And this legal battle between Korea’s biggest management company and best idol group comes not long after the suicide of actress Jang Ja Yeon, after which the Fair Trade Commission revealed its model contract and stated clearly that the contract between celebrities and their management cannot exceed 7 years in length.

Son Sok Hee:

But those of the three members exceeds [7 years], right?

Yang Seong Hui:

Yes. And only three of the five have participated in this lawsuit.

Son Sok Hee:

Then, the remaining two people, U-know Yunho and Choikang Changmin, what’s their reason for not participating in the lawsuit?

Yang Seong Hui:

Well, I have been told that they are consulting with each other on their respective positions. As for the exclusive contract, it is 13 years in length. If we add in the years for military service, the length becomes 15 years of which 10 currently remain to be fulfilled, which would amount to the retirement age for idols and so [JYJ] are concluding that this is no different from a lifetime contract. In order to break away from the contract, one must pay three times the costs of investment as well as two times the potential earnings as a penalty fee, and [in the case of DBSK] this amounts to several hundred million USD. In other words, ending the contract is extremely difficult. In addition, if you look at the original contract, if [DBSK] didn’t sell more than 500,000 units of an album they couldn’t receive a single penny in profit and if they sold more than 500,000 they would receive on their next album a commission of 10,000 USD each, but the only album that sold more than 500,000 units so far is last year’s ‘Mirotic’. And looking at the [financial] records from February, the amount that each member received from album sales represents 0.441~1 percent of the total made from album sales. Also, the members say that they were completely unaware of their contracts’ provisions with regards to their Japanese activities.

Son Sok Hee:

It goes without saying that their management company, SM, is one of the largest companies.

The explanatory documents we discussed here yesterday said, “up to July of last year the members earned 11 million USD in cash alone.” This considering, many are saying that DBSK have made enough money. What do you think about this?

Yang Seong Hui:

11 million USD in 5 years may seem like a lot of money to the average person like you or I. But if you calculate how much each member received, it comes to 400,000 USD per year. If you consider that they are explosively popular and sought-after in Asia, in truth this is not equitable remuneration. According to reports by the media, SM made a profit of 32 million USD through DBSK but took 90% of it as investment fees. Also, we’ve previously talked about the penalty for breach of contract, but in the case of a rookie singer the payment to discharge a contract is around 5,000-10,000 USD and the penalty for breaching the contract is 3 times the discharge fee, but in the case of Dong Bang Shin Ki even if both sides decide to discharge the contract voluntarily through negotiations the penalty for breach of contract is in the hundreds of millions USD and SM won’t have to contribute a penny to this due to the unfair nature of the contract. Furthermore, 13 years is the longest contract length seen in Korea. In the case of idols, contract length is on average 7 years and at most 10 years, so it’s true that [DBSK’s] contract length is excessive.

Son Sok Hee:

When Dong Bang Shin Ki was first contracted, did SM make the contract length 13 years because it predicted [DBSK] would be successful and so wanted to bind them for as long as possible?

Yang Seong Hui:

It looks that way.

Son Sok Hee:

If you add the time at military service to the 13 years, is it correct to say that this is no different from a lifetime contract?

Yang Seong Hui:

Considering that idols generally retire when they reach 30, one is not wrong to see this as a contract for life.

Son Sok Hee:

So that’s why fans are labelling this a slave contract, but aside from this case involving Dong Bang Shin Ki are we seeing a rise in conflicts between entertainers and their management companies?

Yang Seong Hui:

Absolutely. It is especially severe in the case of singers. Idol singers in particular sign contracts at a very young age. Obviously they are the weaklings and are compelled to align their position with that of the big entertainment company and feel pressured to do so. Because if they are seen as being too demanding during the negotiating of the contract the entertainment company can threaten to not debut them, they have no choice but to do as they’re told. What needs to be said about management companies is that in Korea management companies discover and take on very young trainees into whom they invest their own money following an apprenticeship model; at this point, the initial investment amount is extremely high.

Son Sok Hee:

About how much?

Yang Seong Hui:

Tens of thousands of USD for every rookie. In the case of an idol group like Super Junior which has 13 members the costs are very high. They must be taught how to dance, foreign languages, and members who come up from the countryside need to have housing furnished for them and the company even pays for plastic surgery. The trainee period along takes 3-4 years, and so the position of the management companies is that drafting 7 year exclusive contracts and modifying them now and again after the trained stars get famous is impossible whilst running a management company. Who would run a management company under those restrictions? is their complaint. Management companies think it’s their first priority, when their stars get famous, to aggressively earn back their initial investments.

SoSon Sok Hee:

But maybe there’s also this…you said that each trainee takes several tens of thousands of USD to train, so to train a group of 10 would take several hundreds of thousands USD, correct? Perhaps it wouldn’t matter so much if the group was successful, but aren’t there also groups who don’t manage to make it big?

Yang Seong Hui:

In the case of SM, they have had plenty of failures too.

Son Sok Hee:

So does that mean the group that succeeds must earn back the initial investment for the group that failed in addition to their own investment?

Yang Seong Hui:

That is correct. In truth, no one knows the exact amount of the initial investment that goes into making these stars, and the loss these companies incurred through other projects/business dealings they try to gain back through the profits that their stars make. As you may already know, these management companies have very un-transparent financial disclosure structures; the stars themselves are unaware of how much they are burdened with, how unfair is the treatment they receive, which easily lead to frustration due to this systemic problem.

Son Sok Hee:

Then from the perspective of the stars, they would feel used, and even more so if like in this case this has been going on for 13 years under a unilaterally dictated contract; this would be a natural sentiment given the circumstances. It was also the case for Jang Ja Yeon. It was then that the issue of unfair contracts was raised and the treatment [of entertainers] has become a debated topic since. Isn’t that when the Fair Trade Commission came up with a model contract?

Yang Seong Hui:

They made a model contract. But since this was made on an advisory basis it doesn’t have much power on its own and management companies are free to disregard it. At a gathering of the Korean Producers Conference, the entertainment management companies revealed their opposition to the model contract prepared by the Fair Trade Commission. Their common position was that binding a singer for 7 years is not sufficient in light of the initial investment and time that goes into singers. However, these days the fame of stars is growing, so the management company and producers don’t have all the power either.

Son Sok Hee:

Does that mean that singers actually have the upper hand?

Yang Seong Hui:

Yes, but in the case of idol singers the problem doesn’t arise from the time they get famous but lies in the fact that as rookies, before they become stars, they are powerless and so they acquiesce easily to whatever contract is placed before them only to find out afterward that there is no way of compensating for that [powerlessness], no? This is the game of the management companies.

Korea has a very distinct entertainment culture, where the management company that raises a star sees itself as a saviour of that star and so expects that successful star to feel obliged to pay back the company in acts of gratefulness. It’s a patriarchal culture unique to the entertainment industry. If seen in a positive light, it’s a family relationship, but there’s an aspect to it that endangers contractual relationships based on equality, fairness and legal legitimacy. The Fair Trade Commission set the contract limit at 7 years not to say that management companies keep their stars for only 7 years but to advise and encourage companies to re-evaluate the status of their stars after 7 years, modify the terms in accordance with this changed status and re-contract the person after negotiations.

Son Sok Hee:

So, according to what you’re saying, in the present situation the model contract is not sticking and it looks like there’s no other way, but is there another option to improve the current situation?

Yang Seong Hui:

Yes. I think that the fact that the business of entertainment management has become a subject of discussion is already a step in the right direction. By whatever means, we have to find a self-regulating solution. The Dong Bang Shin Ki controversy will inevitably have a negative impact on entertainment companies. Arriving at an equitable standard is in the interests of both sides and important. Whilst we’re getting excited about the Korean entertainment business and its quantitative contributions to the Korean Wave, it is in the interests of management companies and stars to create a market with transparent, healthy and fair rules.

What we need are practical laws and regulations to be made, but the management companies are insisting that the Fair Trade Commission’s 7-year rule is ignorant of Korea’s entertainment business.

In any case, what is most realistic and practical right now are mechanisms to oversee the laws and regulations. At the same time, it’s important in this process to not focus solely on the human rights of entertainers but also take into consideration the position of management companies. Management companies are an important player in Korea’s entertainment business, so we need to find a model where both sides consider it win-win to see each other as partners. And since stars these days have more influence and more highly developed sense of basic rights, conflicts ilke these are not likely to disappear but rather multiply.

Son Sok Hee:

So then there’s a chance that gradually the desired result will come.

Yang Seong Hui:

Precisely. Isn’t the United States, a country with a more developed model, known as the heaven of lawsuits? Agencies and entertainers sue each other all the time. I don’t think we should automatically conclude that all lawsuits or conflicts are bad, and in the case of Korea it is through these instances that legal precedents sympathetic to either side can contribute to a more transparent and fair management contract model that is the best fit for the Korean situation; this is the most important lesson/moral we can take from the Dong Bang Shin Ki controversy.

Son Sok Hee:

Yes. I might have briefly mentioned this in the last show, but early last year when I went to Japan, I visited a Japanese high school class. There’s no way Japanese high school students would know me, right? But when I said that I work at MBC and know Dong Bang Shin Ki the classroom turned upside-down. I ended up giving everyone my autograph. Hahahaha

Yang Seong Hui:

What’s regretful is that in Japan and Southeast Asia there are fans watching all this unfold with interest/concern. In any case, the fact that Dong Bang Shin Ki, who were instrumental in spreading the Korean Wave and bringing it to the level of where it is today, are compelled to halt their activities due to a problem internal to Korea can’t be positive for the progress of Korean pop music or culture, in my opinion.

Son Sok Hee:

Anyway, because I have a related personal experience I hope everything turns out well for Dong Bang Shin Ki. Thank you very much.

Yang Seong Hui:

Yes. Thank you.

~Please do not remove without proper credits~


47 thoughts on “[August 4 2009] Broadcast on Dong Bang Shin Ki’s Lawsuit

  1. Pingback: (TRANS) Broadcast on Dong Bang Shin Ki’s Lawsuit « jyj3

  2. “It is especially severe in the case of singers. Idol singers in particular sign contracts at a very young age. Obviously they are the weaklings and are compelled to align their position with that of the big entertainment company and feel pressured to do so. Because if they are seen as being too demanding during the negotiating of the contract the entertainment company can threaten to not debut them, they have no choice but to do as they’re told.”

    This is what I want to say to those people asking why DBSK signed the contracts in the first place if they were unfair. Just because one signs a contract at a certain point in time doesn’t mean they have to be bound by that contract if they eventually find them to be unfair, especially considering the circumstances when they signed. That’s why there are laws for voiding contracts -so that people would have the option to terminate a contract if the reason falls on any of the grounds cited by law. That’s not betrayal, that’s exercising one’s rights.

  3. news about reconciliation with MNET AND SME might make things complicated for JYJ TTTT haiz….why do ppl love to stop our boys from flying TT argh! doesn’t matter just make sure JYJ will win the lawsuit that’s the most important to me TT

  4. LOL @ the end when he wound up giving everyone his autograph cause he ‘knew’ TVXQ.

    I agree with the guy. Pretty much this will set the Korean wave back a bit.

    Keep your head UP JYJ hope everything goes well.

  5. thanks jimmie… my brains starts work XD im excited for 18th january… is it the final court ruling? or just the final date to submit the documents? ium getting confused,lol…

  6. Why didn’t this came out earlier? Not just international fans need to know about this, Korean fans MUST read!

    I just went to a Chinese site, some fans are saying HM were lying on the press con & people decided not to believe HM anymore…sigh…I don’t know what to say. This’s so stupid! Why do people always think HM could speak 100% true heart? Under that company is very hard, you know?! Just as this article points out, artists have very little rights. Entertainment companies have the say to everything. Therefore, I believe KYHD is SM’s order too. Lyrics & choreography have “meanings” inside. SM orders them to sing this song, or else no come back. What do you think everyone?

    The love between these 5 boys are really strong, SM knows that; therefore, the best way to attack JYJ is to use their beloved brothers/members. By releasing KYHD, SM hit 2 birds with 1 stone–they hit JYJ & all fans. I think SM is happy with the fanwar. Now, they don’t have to worry anymore about TVXQ=5. As the faith of 5 weaken in the fandom, SM can fulfill more. See, fan club is opening for registration again! They’re slowly taking moves. 1st started the war & now tell people to choose sides. And because of the “drama”, people’s attention shift from the company to the 5 poor boys. From Junsu’s tweets to HM’s press-con, now, every attention (bad & good) is on the 5 boys, and SM got out from the war! Wow…smart moves @.@

    (Just my opinion) Although I support Junsu says his thoughts on Twitter, he made a bad move this time. That evil company used this opportunity to create chaos, grr… However, thru his tweets, I know that he still loves HM just as before♥ (although he was disappointed) To me, that’s enough~

    Sorry people, I left a long message. I was too upset with that Chinese site! Sigh….>_<

    • Actually, the ones who made the bad move, in my opinion, were SM’s idols (as well as SM behind the scenes pushing them)….most newer and more powerful JYJ fans had no idea who these idols were before all this but now they do…and that’s not good news for Super Junior, Trax or BoA.

      • At this point, I’m afraid if SM throws away Super Junior or Trax members, the ahjummas will make sure they never get employed anywhere else….

      • LMAO, I’m sorry but I laughed at your last paragraph (am-5-year-old). Thanks a lot for translating this. It mentioned some points that I had forgotten and it is always nice to hear what outsiders think of this.

      • lol @jimmie…well i can only say DAI SEI == that’s in cantonese btw ~ those sme idols who bashed junsu deserve it, they should have think twice about even bad mouthing junsu when junsu didn’t even directly said it was to who == even if they want to protect their company “image” they could have done it classier, o well~ahjumma fans rocks! the BUS AD is sooo damn COOL, those buses BETTER STOP BY AT SME XD

      • wait i should rephrase my words it’s more like THEY SHOULDN’T MESS WITH AHJUMMA FANS *shudders* i ain’t wanna be an enemy of them ^^;;;;

      • Jimmie, I agree. As new JYJ fans, my mom and I (auntie and granny) did not know many of these SME idols but because of their negative tweets, we are now quite aware of who they are (not good for them) and other idols who work for SME. Again, we will be taking our purchasing power to JYJ and away from SME. It is definitely their loss. SME better quit now or things will get much worse for them in the long run.

      • Oh~ I didn’t think of the bad-mouthing this way before. After I thought about it, yea…before, I didn’t know about that dancer (whose tweet was retweeted by BoA), but after that, I knew him. SM didn’t care if the attention is bad or good, they just want promotion. Let people remember them. I can’t help but laugh at this. I feel a pity for the innocent ones.

        I don’t know if this’s just me; I just can’t believe businessmen. Their tricks, I’ve seen a lot. Also, the fact that I’m a theatre student, I know how the theatre/entertainment industry works. Who’re the bosses? Not the talents, but people who have$$$. Let me put it this way: $$$=Power. OMG, let this case end early! (SOMEONE has no way to win) Also, end that KFPCAI! Or put it under the government rule. That’s a BS!!

  7. thank you very much for this. this summed up very well the reasons for the case which some people have already forgotten because they think it is all about the cosmetics store. *sigh* i hope this will be circulated but i’m afraid it will be brushed off as biased.

    i am anxious for the outcome on the 18th. we just want justice for JYJ and I hope they get it.

  8. Very interesting read~
    I didn’t know that it was because of the Jang Ja Yeon case that the FTC issued a model contract!
    (and I’m starting to think some people should set up a “jangjayeonfiles” site, it’s been years and there still hasn’t been any major development in the case…)

  9. Pingback: Difusión de la demanda Dong Bang Shin Ki « OurJYJ

  10. Jimmie, I have a question: So what is exactly happening on the 18th? Will there be a court decision or not? Thank you.

    • It’s either the final ruling or final day for pleadings submission….I’ve heard both. Either way I’m thinking it’s significant because JYJ are sticking around and delaying their American promotions and there’s been a sudden rise in BS about the contract being circulated around the Internet, not to mention these “Hotel Girls” are acting up again spreading lies about the case.

      • Thanks Jimmie for your reply. As a newbie JYJ fan, I know about the legal dispute between JYJ and SME, but I am still learning about some of the details to this lawsuit. So who are these “hotel girls” that you mention? Also, I was just reading the article on “How to find a new path for Asia’s best stars” and was wondering how the break up has split the DBSK fandom? I got the impression that Korean Cassies support JYJ and the international fans??? As an international fan, knowing what I know about the case so far, I totally side with JaeYooJun of course. I think anyone with an ounce of common sense and human decency would be supporting JYJ in their fight. Thanks again.

      • I’m just as newbie a fan as you ^^…so it took me a while to catch up on DBSK history (and I’m still not quite there yet). Apparently, when the lawsuit first broke out, a group of antis who dubbed themselves the ‘Hotel Girls’ started systematically spreading false rumours and lies about JYJ. The majority of them are staunch Homin fans and there’s high suspicion that they had SM backing due to the high level of organisation they exhibited. They’ve been dormant for a while, I believe because the police got involved at one point, but now they’re acting up again, trying to spread lies to Japan, where the fans are relatively innocent of what’s happening in Korea.

        Korea right now is decidedly pro-JYJ. In fact there’s an article from this morning of a poll taken on ‘Who has the higher chance of success, JYJ or 2VXQ?’ The results: 85% for JYJ, 15% for 2VXQ. However, Japan and the international fandom are still up for grabs…hence the sudden proliferation in false and distorted information specifically targeting international fans when it seems the court case is wrapping up….

      • Hotel girls: “Ho”-comes from DC gallery Head to the Ground. Die-hard Yoonho fans flocked to this gallery, when still all other major fansites were trying to keep all-5-mode. This yoonho fans were very direct to support only YH and make/spread rumors even when the gall was open to everyone. So it started to be called “ex-communion gall (호적파인갤)” by dc tvxq gallery, for which Korean word starts with “ho”. “Tel” comes from telzone dvxq gallery, where dc HTTG gall tries hard to overtake and eventually did so. So Ho+tel, hotel girls. These people have been so focused on spread rumors in public sites (non-fan sites) for the last year.

  11. Thanks Jimmie for your reply–I am learning so much from you and this site. You certainly are a quick study on DBSK! I am so glad to hear about the support that JYJ is getting in Korea (via poll this morning). I just have to wonder why there is such confusion with international fans? I am in North America and can only access English sites and can reason and figure out (quite easily) why and who is in the right here—it is so clear! If anyone knows anything about the contract, how can there be any doubt? I mean come on…..how can anyone, especially, those who claim to be DBSK fans, ever support such a contract and want any of their members to continue to work under such conditions??? No human in this day and age should be subjected to such a maltreatment. If some of the international fans feels betrayed by the break up, may be they should look to their conscience first before they start laying any blame. Remember the golden rule: treat others as you would want to be treated.

  12. yeah and this kind of news – albeit released more than a year ago – never made it to the i-fandom.
    no wonder there are a lot of misunderstanding..
    thanks so much Jimmie..exactly the kind of article that I am looking for

  13. thanx u jimmie.. i’m so happy about this… hahaha
    this is a good news for us..^^
    hmm i hear that sme sent the letter to delay the hearing to court..
    n JYJ lawyer reject it because sme didn’t have reason to cancel it…
    is it true????
    sme is so afraid that JYJ win it.. lol

  14. thanx jimmie.. i’m so happy about this… hahaha
    this is a good news for us..^^
    hmm i hear that sme sent the letter to delay the hearing to court..
    n JYJ lawyer reject it because sme didn’t have reason to cancel it…
    is it true????
    sme is so afraid that JYJ win it.. lol

  15. I hope the case didn’t get delay anymore than this. JYJ have suffered enough already. SME was very affraid JYJ would win like Hangeng. So, they tried to prolonge the case as long as they can. I hope the court sided with JYJ and make the final ruling as soon as possible.

  16. I wonder how the situation is now in Korea. Because if there’s really a division in K-cass, there must be announcement about this. Most of the time, i.e. when the lawsuit happenned, K-cass has been the fastest and most effective and reasonable about the situation and what we should do, encourage us to unite and protect the boys. But this time, all the sites keep silent up to now.

    Althoụgh I hear that most of the fansites support JYJ, but clearly that it’s not good thing to devide to pro JYJ or Homin because it lessens the strength of Cassiopeia.

    So the question is: Why this time didn’t Korean cassiopeia raise their voice to unite cassie all around the world? Did they really devide into Orion and Holyshinki or they have not decided what to do yet? Or they are waiting for st happen?

  17. I understand what the person is saying but he forgot that Homin just revealed in their interviews that they are on SM’s side. They want the members back but “through SME”. The members should resolve the problem with the company first before they can unite. So what if they are under SME? If you agree they are not puppets then open your eyes and see what they are saying in their interviews. They have made their stance clear.
    It’s not like Cassie didn’t try to tell them we would support them if they got out of SME with JYJ. It’s just that they believed SM made them where they are today and they should be loyal to SM. It’s very hard to change a person’s perspective.
    I don’t know what else Cassie have to do to make them realize that they would still have fans without SM backing them.
    For now I will support JYJ will all I got. I respect Homin’s decision staying in SM and let them live their live. It’s not that I’m giving up on them, it’s that I’m letting go.

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