K-pop legal feuds highlight power of contracts as NewJeans, EXO members lose disputes

From left are EXO members Chen, Baekhyun and Xiumin / Captured from INB100's X account

As K-pop's global influence continues to grow, disputes over exclusive contracts between idols and their management agencies are once again shaking the industry at home.

Recent court rulings against EXO members Chen, Baekhyun and Xiumin, collectively known as CBX, and girl group NewJeans have reignited the debate over how Korea's star-making system governs artists' careers and their rights.

EXO-CBX vs. SM

Tensions between SM Entertainment and the three EXO members have recently deepened, with both sides issuing conflicting statements. The latest flare-up began when SM announced plans for a full-group EXO comeback in December that excluded the trio, which had launched individual activities under their new agency, INB100.

The dispute dates back to June 2023, just five months after the three renewed their group contracts with SM. They informed the agency that they intended to terminate the deals, citing a lack of transparency in profit settlements. SM denied the allegations.

While speculation also arose that a third party had tried to lure the members away from SM, the conflict was eventually resolved through a settlement allowing the trio to keep their contracts with SM under EXO's name while pursuing solo work independently. In exchange for permission to use the "EXO-CBX" name and related intellectual property, they agreed to pay SM 10 percent of their individual revenues.

That agreement later unraveled. CBX claimed SM had broken "a verbal agreement" to secure a 5.5 percent distribution fee and withheld payments as a result. The trio then filed multiple lawsuits, injunctions and complaints against SM executives with the Ministry of Culture, Sports and Tourism and the Fair Trade Commission, but all were dismissed or ruled in SM's favor.

CBX later said they would honor the original agreement. SM, however, cited "trust issues" as the reason for excluding them from EXO's upcoming activities, a stance that has largely turned public opinion against the trio.

K-pop girl group NewJeans / Newsis

NewJeans vs. Ador

Girl group NewJeans, which has been in a yearlong dispute with Ador, a HYBE Labels subsidiary, also recently lost the first round of its lawsuit to terminate its management contract with Ador.

In November 2024, members Minji, Hanni, Danielle, Haerin and Hyein announced through a surprise press conference that they were ending their contracts with Ador, saying trust had broken down following the company's dismissal of former CEO Min Hee-jin. They began independent activities, arguing that the company's actions had "irreparably damaged" their business relationship.

In court, the members raised additional complaints, including the company's leaking of trainee-era photos and videos; disparaging comments from HYBE's PR staff; and alleged attempts by another HYBE sub-label, Belift Lab, to imitate NewJeans' concept for its own rookie group ILLIT.

However, the court ruled that none of those claims constituted legal grounds for ending their contracts.

The ruling stated that while "forcing an entertainer to continue activities against their will could infringe on personal rights," disagreements over management or creative decisions after an artist gains success "cannot be viewed as violations of those rights caused by contractual coercion."

The court also warned that such cases could set industry precedents and lead to problems such as poaching, urging all sides to exercise caution.

Former Ador CEO Min Hee-jin / Yonhap

For decades, contracts in Korea’s entertainment industry were tilted in favor of agencies. But the industry is no longer what it was.

"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," said an industry insider working for a major entertainment label, speaking on condition of anonymity.

"But as K-pop has gone global, artists have gained more leverage and a greater ability to speak out. 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 insider cautioned against oversimplifying the issue as "a fight between powerful companies and individuals" in an era when the world's eyes are on K-pop's business model.

"In the end," the insider added, "when disputes arise, all parties must respect the court's decision once it's been finalized."