The Korean entertainment industry is facing renewed scrutiny over its contract system as high-profile legal disputes between major K-pop artists and their management companies continue to make headlines. Recent court rulings have gone against popular girl group NewJeans and three members of the boy band EXO, highlighting the complex power dynamics and contractual obligations that govern the careers of Korea's biggest music stars.
The most recent controversy involves three EXO members - Chen, Baekhyun, and Xiumin, collectively known as CBX - who are locked in an escalating dispute with SM Entertainment. Tensions reached a new peak when SM announced plans for a full EXO group comeback in December that would exclude the trio, who had begun pursuing individual activities under their new agency, INB100. This decision has largely turned public opinion against the three members, with many fans viewing their actions as a breach of loyalty to the group.
The CBX controversy traces back to June 2023, just five months after the three members had renewed their group contracts with SM Entertainment. The trio informed the company of their intention to terminate their deals, citing concerns about a lack of transparency in profit settlements. SM Entertainment firmly denied these allegations, setting the stage for a prolonged legal battle.
Initially, the conflict appeared to reach a resolution through a settlement agreement that allowed CBX to maintain their contracts with SM under the EXO name while pursuing solo work independently. As part of this arrangement, the members were granted permission to use the "EXO-CBX" name and related intellectual property in exchange for agreeing to pay SM Entertainment 10 percent of their individual revenues. However, this agreement would later fall apart due to disagreements over financial terms.
The settlement eventually unraveled when CBX claimed that SM had broken what they described as "a verbal agreement" to secure a 5.5 percent distribution fee. In response, the trio withheld payments to the company. This led CBX to file multiple lawsuits, injunctions, and complaints against SM executives with both the Ministry of Culture, Sports and Tourism and the Fair Trade Commission. However, all of these legal challenges were either dismissed or ruled in SM's favor, dealing a significant blow to the members' case.
Despite later agreeing to honor the original settlement terms, CBX found themselves excluded from EXO's upcoming group activities. SM Entertainment cited "trust issues" as the primary reason for this decision, a stance that has resonated with much of the public and fan base who view the members' actions as damaging to group unity.
Meanwhile, girl group NewJeans has been embroiled in its own high-stakes legal battle with Ador, a subsidiary of HYBE Labels. The five-member group - consisting of Minji, Hanni, Danielle, Haerin, and Hyein - recently lost the first round of their lawsuit seeking to terminate their management contract with Ador. The dispute has been ongoing for over a year and represents one of the most closely watched contract battles in recent K-pop history.
In November 2024, NewJeans members made headlines when they announced through a surprise press conference that they were ending their contracts with Ador. The group cited a complete breakdown of trust following the company's dismissal of former CEO Min Hee-jin, who had been instrumental in the group's creative development and success. The members argued that the company's actions had "irreparably damaged" their business relationship and began pursuing independent activities.
In court proceedings, NewJeans raised several additional complaints against their management company. These included allegations that Ador had leaked trainee-era photos and videos without permission, disparaging comments made by HYBE's public relations staff about the group, and claims that another HYBE subsidiary, Belift Lab, had attempted to imitate NewJeans' concept for its own rookie group ILLIT. The members argued that these actions collectively justified their decision to terminate their contracts.
However, the court rejected these arguments, ruling that none of the claims constituted valid legal grounds for ending their contractual obligations. The ruling acknowledged that "forcing an entertainer to continue activities against their will could infringe on personal rights," but drew a clear distinction between this and disputes over management decisions. The court stated that disagreements over management or creative decisions that arise after an artist achieves success "cannot be viewed as violations of those rights caused by contractual coercion."
The court also issued a broader warning about the potential industry-wide implications of such cases. Judges cautioned that allowing artists to easily break contracts could set dangerous precedents and lead to problems such as talent poaching between agencies, urging all parties involved to exercise greater caution in future disputes.
These high-profile cases reflect broader changes occurring within Korea's entertainment industry, which has historically favored management companies in contractual arrangements. An industry insider working for a major entertainment label, speaking on condition of anonymity, provided context for these evolving dynamics. "Korea's entertainment industry was built on a system where agencies nurtured and trained artists from the ground up, which in the past made artists end up on the vulnerable side," the source explained.
However, the global expansion of K-pop has fundamentally altered this power balance. "As K-pop has gone global, artists have gained more leverage and a greater ability to speak out," the insider continued. "Companies can no longer impose one-sided terms and both parties now go through extensive negotiations before signing contracts. Since these agreements are legally binding, any unilateral breach leads to lawsuits."
The industry expert cautioned against oversimplifying these disputes as merely "a fight between powerful companies and individuals," particularly given the international spotlight on K-pop's business model. The global nature of the industry means that how these conflicts are resolved could have far-reaching implications for how Korean entertainment companies operate and manage their artists.
As these cases continue to unfold, they highlight the ongoing tension between artistic freedom and contractual obligations in an industry that has become a major cultural export for South Korea. The outcomes of these disputes are being closely watched by industry professionals, artists, and fans worldwide, as they may establish important precedents for future contract negotiations and artist-agency relationships. "In the end," the industry insider concluded, "when disputes arise, all parties must respect the court's decision once it's been finalized."
