Will HYBE prioritize its own artists? Leaked letter from SM Entertainment revealed Kpop News
An SM Entertainment insider leaked a letter containing HYBE and SM’s exchange on prioritizing artists.
Why is this a big problem?
Will HYBE eclipse SM artists? Insider leaked letter revealed
On March 1st, a letter from an SM Entertainment insider was published online. According to Korean media, SM Entertainment sent the leaked letter to shareholders ahead of the scheduled meeting.
(Photo: Yonhap News Agency)
On the outside of the letter were written the headlines “an independent board for all shareholders and unspecified shareholders” and “divided into 1,200 won per share.”
At the bottom left of the letter was the circled heading “SM Board Recommendation”. On the contrary, the caption for “Former Major Shareholder Lee Soo-Man’s Proposal” was denoted by an “X” mark.
Along with the inside disclosure, the letter also stated:
“The 2023 shareholder meeting was the last chance to fully settle SM’s decade-long management disputes.”
“It was also the last opportunity to increase enterprise value as a company with many talented artists in Korea.”
A separate Q&A document was also pinned by SM to convince shareholders. The exchange was to ask SM Entertainment if merging with HYBE was a good thing.
In response to their response, SM replied that there was no choice but to accept HYBE’s priorities, which is to focus on artists from their affiliated labels. The conversation also mentioned the artists associated under HYBE, including the labels that host them.
(Photo: Logo SM Entertainment (News1))
See transcript below:
Ask: “Isn’t it beneficial that HYBE, a big company in the same industry, is acquiring SM?”
SM: “Well, we will have no choice but to accept their first priorities, which are the labels associated with them, such as BigHit Music (BTS), ADOR (NewJeans), Source Music (LE SSERAFIM) and PLEDIS Entertainment (SEVENTEEN ).”
“Your artists get the best songs, performances, dance moves, comebacks, and interns.”
The document also explained that if HYBE owned 40% of SM’s shares and owned 60% with general shareholders, conflicts of interest would arise between SM and HYBE shareholders as competitors.
(Photo: Twitter: @HYBEOFFICIALtwt / @kconjapan / Facebook: BTS)
SM also explained why they are promoting the increase of Kakao’s paid-up capital through the issuance of KRW 90,000 convertible bonds. They also opposed HYBE’s KRW 120,000 takeover bid.
“We can expect synergies from the increase in paid-in capital and the bond issuance by Kakao. This serves the strategic cooperation with the company.”
“There are no management rights and almost no overlap between our lines of business and our business as the total issuance volume is less than 9%. »
How did the community react to this?
The response from the online community to SM’s responses has been overwhelmingly negative. They particularly criticized SM Entertainment for their approach and even considered the letter a media game.
Here are their comments below:
“SM is such a bad loser at this pathetic media game. Did they only learn dirty things from cocoa?”
“They really think other agencies hit like they do.”
“It seriously leads me to believe they don’t know anything about running a huge agency. So what exactly did you want to do with SM 3.0?”
“The management level of SM really sucks.”
“Is that principal a Choding who only passed elementary school?”
What is your opinion on this topic? Share your thoughts in the comments below!
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