By Kwon Ji-youn
Korea's top entertainment agency has formed a partnership with the country's leading sports marketing company in a move intended to boost its profits by expanding into non-entertainment segments.
SM Entertainment on Tuesday signed a mutual investment agreement with IB Worldwide, home to world No. 1 golfer Park In-bee, star gymnast Son Yeon-jae and major leaguer Choo Shin-soo.
"This partnership will create the next trend in hallyu (Korean wave), which is sportainment, a combination of sports and entertainment," SM Entertainment CEO Kim Young-min said.
Industry insiders say the deal is meaningful in many ways.
First, this reflects SM's commitment to diversifying revenue streams by building partnerships with leaders in the non-entertainment segment.
Other such efforts include SM's plans to launch a global dining brand next month, its third attempt at a foray into the food and beverages market.
YG PLUS, an affiliate of YG Entertainment, home to idols Big Bang and 2NE1, has already made inroads into sports marketing with its acquisition of G-AD Communications, the agency representing rookie golfer Kim Hyo-joo. YG PLUS also launched YG Foods in June.
The SM deal also indicates entertainment giants are investing in a more sustainable business portfolio for when hallyu, or Korean wave, starts to lose its steam.
According to a report by the Korea International Trade Association (KITA), the popularity of Korean music, dramas and films has been losing momentum in many countries throughout Asia, Central and South America, the Middle East and Europe.
In May 2012, SM acquired BT&I, Korea's fifth-largest travel management corporation listed on KOSDAQ to establish SM C&C (Culture and Contents). SM C&C represents household names in entertainment, from emcees Kang Ho-dong and Shin Dong-yeop to actors Kim Ha-neul and Han Chae-young. Shin and Kang are some of Korea's most sought-after entertainers on local television.
FNC Entertainment, which represents idol bands FT Island and CN Blue, has also been reaching out to TV personalities, and has recently succeeded in signing Yu Jae-seok, Noh Hong-chul and Kim Yong-man, some of Korea's top-paid entertainers.
The new agreement between SM and Galaxia SM says the two companies will mutually invest to the tune of 27 billion won. IB Worldwide has adopted a new name with the deal ― Galaxia SM.
Galaxia SM said it will increase capital by issuing new stock, 11.1 billion won worth of which will be sold to IB's parent company, Hyosung Group, and 11.5 billion of which will be sold to SM and its chairman, Lee Soo-man. In turn, SM will issue 6.5 billion won in stock to be purchased by Galaxia SM.
Korea's top entertainment agency has formed a partnership with the country's leading sports marketing company in a move intended to boost its profits by expanding into non-entertainment segments.
SM Entertainment on Tuesday signed a mutual investment agreement with IB Worldwide, home to world No. 1 golfer Park In-bee, star gymnast Son Yeon-jae and major leaguer Choo Shin-soo.
"This partnership will create the next trend in hallyu (Korean wave), which is sportainment, a combination of sports and entertainment," SM Entertainment CEO Kim Young-min said.
Industry insiders say the deal is meaningful in many ways.
First, this reflects SM's commitment to diversifying revenue streams by building partnerships with leaders in the non-entertainment segment.
Other such efforts include SM's plans to launch a global dining brand next month, its third attempt at a foray into the food and beverages market.
YG PLUS, an affiliate of YG Entertainment, home to idols Big Bang and 2NE1, has already made inroads into sports marketing with its acquisition of G-AD Communications, the agency representing rookie golfer Kim Hyo-joo. YG PLUS also launched YG Foods in June.
The SM deal also indicates entertainment giants are investing in a more sustainable business portfolio for when hallyu, or Korean wave, starts to lose its steam.
According to a report by the Korea International Trade Association (KITA), the popularity of Korean music, dramas and films has been losing momentum in many countries throughout Asia, Central and South America, the Middle East and Europe.
In May 2012, SM acquired BT&I, Korea's fifth-largest travel management corporation listed on KOSDAQ to establish SM C&C (Culture and Contents). SM C&C represents household names in entertainment, from emcees Kang Ho-dong and Shin Dong-yeop to actors Kim Ha-neul and Han Chae-young. Shin and Kang are some of Korea's most sought-after entertainers on local television.
FNC Entertainment, which represents idol bands FT Island and CN Blue, has also been reaching out to TV personalities, and has recently succeeded in signing Yu Jae-seok, Noh Hong-chul and Kim Yong-man, some of Korea's top-paid entertainers.
The new agreement between SM and Galaxia SM says the two companies will mutually invest to the tune of 27 billion won. IB Worldwide has adopted a new name with the deal ― Galaxia SM.
Galaxia SM said it will increase capital by issuing new stock, 11.1 billion won worth of which will be sold to IB's parent company, Hyosung Group, and 11.5 billion of which will be sold to SM and its chairman, Lee Soo-man. In turn, SM will issue 6.5 billion won in stock to be purchased by Galaxia SM.
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