Mon. Jul 22nd, 2024

EXO Members Sued by SM Entertainment Over Non-Payment of Royalty Fees

EXO Members Sued by SM Entertainment Over Non-Payment of Royalty Fees

Just days after a company established to release solo music by band members of K-pop group EXO declared “war” against the stars’ longtime label and management agency SM Entertainment over a contract dispute, the K-pop giant has filed a lawsuit against the trio.

As reported by the Korea JoongAng Daily, SM filed a civil suit on Wednesday (June 12) against Chen, Baekhyun and Xiumin — who are also known as the trio EXO-CBX — demanding payment of a 10% intellectual property royalty fee it claims the stars have been evading for two months. According to SM, the singers agreed to pay the fee in a contract signed last year as part of an agreement that allowed them to pursue their solo endeavors outside of SM — and pay a discounted distribution fee for their solo music distributed by SM’s new majority shareholder Kakao — while continuing group activities as EXO and EXO-CBX under the K-pop giant.

Related

In a Monday (June 10) press conference held by representatives for INB100 — the newly established company Baekhyun founded in 2023 that also signed Chen and Xiumin for their respective solo careers — Cha Ga-won, the president and majority shareholder of INB100’s holding company One Hundred, accused SM of imposing a 10% intellectual property royalty fee for the members’ stage names, as well as the EXO and EXO-CBX names, in exchange for the distribution fee discount for their solo endeavors. However, INB100 representatives maintain that SM has failed to deliver its end of the deal, which they claim frees INB100 from its obligation to pay the 10% IP royalty. INB100 representatives further alleged that the company had sent a formal letter of complaint to SM in April but that the K-pop giant never responded.

In the wake of the press conference, SM sent out a press release disputing the allegations. In the release, the company claimed the 10% intellectual property fee was established in court mediation when previous EXO members exited the group while still under contract — specifically Kris Wu, Luhan and Tao, all of whom left between 2014 and 2015. SM also alleged that the stars’ contracts with the company are still valid and that the trio benefits from the EXO brand but are not fulfilling their contractual obligations, despite the agency acting in good faith with the lower distribution rate. The company also claimed it had failed to respond to INB100’s format letter of complaint because it hadn’t wanted to distract from the rollout of new music releases from EXO members Chen, D.O., and Suho last month.

The discord that erupted this month arrived almost exactly one year after Chen, Baekhyun and Xiumin first pursued legal action against SM over what they deemed “slave contracts,” though that dispute was subsequently settled when the trio reportedly opted to maintain their exclusive contracts with SM.

Earlier this week, rumors circulated that an upcoming EXO album was in jeopardy as a result of the lawsuits. But on Tuesday (June 11), INB100 put out a statement clarifying that the issues have no relation to EXO and that EXO-CBX will “earnestly participate in EXO’s full group activities with SM in the future.” SM subsequently backed up that statement by saying “there has been no further discussion about changes to the plan” for new music. EXO’s most recent release was the group’s seventh studio album Exist, which dropped last July.

By Michael

Related Post