Korea Management Federation (KMF) Releases Position Statement
The battle between NewJeans and ADOR is intensifying. Amid this, NewJeans recently held a press conference unilaterally claiming termination of their exclusive contract, stating that their demands for corrections were not met. In response, the Korea Management Association (hereinafter “KMA” / Chairman Yoo Jae-woong) has issued the following statement urging an expeditious end to this dispute and a return to normal relations.
As the dispute between ADOR and NewJeans has escalated recently, it is negatively impacting our popular culture and arts industry in various ways. Regarding this matter, our association wishes to express the issues surrounding the group NewJeans and the problems with exclusive contracts arising from this situation, as well as the public’s perspective and the sense of dismay felt by industry workers. We deliver this statement from the position of workers in the popular culture and arts industry, with the hope that our industry will once again leap forward.
Our popular culture and arts industry respects the exclusive contracts signed between artists and their agencies based on mutual trust. At the foundation of this lies decades of consideration and trust built between artists and entertainment agencies, which means that simply because an issue arises does not automatically fulfill the conditions for contract termination.
However, NewJeans’ current position, which ignores all procedures, can only be interpreted as having no intention whatsoever from the beginning to make the mutual efforts necessary for maintaining the contract, or having no such will. Our law fundamentally operates on the principle of protecting established contracts, and when it reaches the stage of contract termination, disputes are handled by holding parties accountable. This has significance in that contracts are protected until complete termination is reached, and therefore NewJeans’ current claim of contract termination is absurd.
Furthermore, the loss of contract validity through such unilateral claims of contract termination must be approached with great caution, as it can deal a significant blow to the trust relationship of exclusive contracts overall. The relationship between artists and entertainment agencies is not a simple employment relationship; work proceeds within a mutually collaborative partnership. Under an exclusive contract, artists must do their best to demonstrate their talents and qualities and cooperate with the agency’s activities, while the agency must support various activities to allow the artist’s talents and qualities to be fully realized. However, when such disputes arise, the claim that an exclusive contract can be terminated merely by declaration brings catastrophic consequences to South Korea’s popular culture and arts industry, which involves not short-term contracts but long-term contracts spanning several years, and furthermore, investments made from the trainee period. If anyone could terminate a contract simply by declaration, how could the validity of exclusive contracts be guaranteed, and who would invest based on such uncertain contracts? In this regard, contract termination must be approached very cautiously, and the issue of contract termination should be discussed under the overarching premise of contract maintenance and improvement.
Lastly, in our popular culture and arts industry, particularly for popular singers, our industry has operated under the principle of “invest first, recover later” from the past to the present. Companies inevitably become the weaker party in exclusive contracts once they have made initial investments. In particular, for companies that have nurtured rookies through investment, the top priority is to protect those artists as much as possible, maintain contracts well, and generate revenue until at least the invested amount has been recovered. In other words, when disputes arise between artists and agencies, companies are in a position where they have no choice but to hope for the maintenance and preservation of the exclusive contract, thoroughly from the position of the “weaker party.” However, current laws have absolutely no measures that consider the company’s position. In particular, when someone maliciously wishes to terminate a contract, there is nothing that can be done to maintain the contract other than ultimately filing for damages. From this perspective, approaches like the current one by NewJeans can be called extremely malicious methods that can shake the very foundation of our popular culture and arts industry.
Therefore, our association hopes that NewJeans will withdraw their previous position and engage in dialogue with the company, sincerely hopes that this dispute will be resolved well, and earnestly prays that it does not devolve into the worst-case scenario.
Additionally, we have been able to confirm how significant the weaknesses are in current laws regarding stable contract maintenance. We hope that government departments and relevant parties can discuss this from the ground up for the long-term development of this industry. For the continued development of our popular culture and arts industry, we at the KMA will not stand idly by and will do our best to continuously monitor this matter and respond actively. Thank you.