Disruptions in Activities and Lawsuits With SM Entertainment and Previously Associated Artist

2002
The Creation of the Modern day Entertainment Industry’s “Slave Contract”…Disciplinary Action from the Agency.

According to statements from insiders, SM Entertainment had been ordered to change its policies due to abusing their power to include conditions that were one-sidedly unfair to the artists in their contracts. Examples include H.O.T.’s previous members Moon Heejun and An Seungho.
In addition, SM Entertainment’s main shareholder, Lee Sooman, along with Yedang Entertainment, Giant A&V, and 4 other like companies to form a total of eight, cofounded the Record Label company iKpop. It was revealed that because it had been made so that songs and albums could only be released through this one company, it had dominated 53.9% of the entire music industry at the time. In increasing the surcharge on their company to approximately a million dollars USD, its founders made it so that it was impossible for artists to release music independently.
(Slave contracts, Monopolization)
The Increased Number of Successive Cancellations of JTL Broadcasts—The Power of the Giant Entertainment Agencies?

The three members of H.O.T. Jang Woohyuk, Tony An, Lee Jaewon left their agency, SM Entertainment and released a new album through their new agency, JTL. However, even two weeks following the release, their songs could not be heard on any of the broadcasts. Even the showing of their new music video with JTL that had been scheduled to air on the 6th during the show, “Inkigayo Live” by SBS, suddenly got cancelled. It was stated by SBS that “We will play it too if other stations play it first. Because a new show starring Kangta, Moon Heejun, Jun Jin and other SM artists as the MC’s, will begin to air on the 19th, there is still need for us to be able to cooperate with them. There’s no reason for us to provoke them.”
(SM’s boycott, disruption of activities of artists that have ended their contracts)

2004
“SM’s Contracts: A Modern Day Slave Contract”
On the 5th, the High Court of Seoul rejected SM Entertainment’s appeal against the previous order to revise their contracts, stating that “The enormous penalty for leaving, imposed upon SM Entertainment’s artists is very unfair.”
The Department of Justice added in response to the ruling that “Even though the sum of money needed in training a new artist may be large and though there may be a certain amount of risk in that investment, in general, industries that have a high risk also produce a high level of profits as well. It’s also generally the case that the consequences of the investment are the responsibility of the investor. Though it is the case that the penalty for breaking a sealed contract should be high, it is an excessive abuse of the concept to try to rake in the loss from the investment in a failed artist from a successful one as well.”

(The appeal to reconsider the ruling once they receive the order to revise their slave contract is rejected)

“The Change in MC’s for the Asia Song Festival—Tony An ‘Cannot Stand as the MC With Biases Like That’”

Tony An’s previous agency reveals their position, saying that “It’s obvious that if Tony An stood on stage as the MC, he wouldn’t let artists from the same agency like TVXQ come up as well.” and pressures for the change in MC’s for the event.
(SM’s boycott, disruption of activities of artists that have ended their contracts)

Lee Sooman Sentenced to a Period of Probation for “Withholding Company Funds”
On the 3rd SM Entertainment’s representative Lee Sooman (52) was put under suspicion for using the company’s funds to increase the capital, was sentenced to 2 years and 3 years of probation.
(Withholding company funds)
2006
CF Model Yoo Minho’s Lawsuit Against SM Ent.- Courts Rule To Nullify Entertainers’ Slave Contracts

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2007
Oppression in Our Entertainers’ Contracts: Kim Jihoon As SM Ent.’s Slave?
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A Talent Agency That’s Unable to Change It’s Habit of Signing Slave Contracts
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2009
TVXQ’s Complaints: “A 15 Year Contract Including The Period of Their Mandatory Military Service, and Profits of 0.4% Per Person”
“We are exhausted both physically and mentally from the intensive schedules both planned and initiated one-sidedly by our agency for the last 5 years since we debuted.”
“Except for 1 week in an entire year, we ran schedules that allowed us to get only 3-4 hours of sleep per day.”
“A 13 year contract, in reality, meant a life-long contract. Including the time we would need to complete our military service, this contract would lengthen to over 15 years. This meant that there were still almost 10 years left in our contracts. Realistically, this meant that we would be bound until we retired from the Entertainment Industry.”
“If you read the terms and conditions outlined in the contract regarding profits from album sales, you’ll find that, only under the condition that over 500 000 copies of an album were sold, would the members then, each receive around $8500 USD. But if the minimum number of albums sold were not met, they would not earn a single cent of their own profits.”
“It was only on February 6th, 2009 that this condition was finally revised. However, even after this amendment, the division of profits was still that each member was only able to receive 0.4%-1% of their profits, depending on the sales of the particular release.”
Park Chansong: “TVXQ’s ‘Slave Contract’ With SM Finally Exposed.”
*Because the members of TVXQ were minors (under the age of 19), the longest possible period for a contract of 13 years was decided upon so that, compared to the general length of activity for an entertainer, this would mean that they would be bound for life.
* They established a penalty that was two times more than they would have made even if they had continued with their activities for the full contract period.
* The appropriate documents was not shown to those involved at the time the contract was established
* They stabbed the members in the back with the condition that they would not be paid for their work unless over 500 000 copies of the album were sold, and only $8500 USD each even if this was the case.
* “The agency abused the fact that the members of TVXQ had been minors and in the vulnerable position of a new artist to establish an unfair contract and claim an unjustified portion of the profits.”
The Lawsuit Between Hankyung and SM…The Details of Super Junior’s Contract Exposed
The biggest issue was concerning the division of profits. Only after selling more than 50 000 copies of an album do the members of Super Junior receive 2% of the profits. Because of the current state of the music industry, not only is it not an easy feat to sell more than 50 000 copies of an album to begin with, but depending on the conditions of each of their contracts, the actual sum of the profits going back to each of the members may be a mere fraction of that 2%. Even in the case of their 3rd album, that sold 250 000 copies, the sum allocated to each of the 13 members was not even $3500 USD.
Not only that, but another big problem lies in the fact that 250 000 copies in the current state of the music industry, is the most impressive looking number to have sold. Also, Super Junior’s contract period is also 13 years, like TVXQ. Because in the case of Hankyung, he will only have been free from SM Entertainment at the age of 35, this contract is being evaluated as a slave contract. In addition, in the case that he did chose to end the contract, the penalty would be comparable to the sum of 3 times the total invested into the group by SM and 2 times the total fortune that would have been amassed throughout the full period of the contract.
(slave contract)
Claims of “Forging the Signatures of the 3 Members of TVXQ for the Shenzhen, China Concert”
According to statements released by the representative of the 3 TVXQ members on the 24th, “Korean and Chinese fans brought it to the attention of the authorities that the signatures of the 3 DBSK members on the confirmation documents for the concert in Shenzhen may have been forged. Upon closer investigation, it has been revealed that this was indeed true.”
In addition, he added that “SM has aroused issues as serious as sending someone to forge the signatures despite the fact that the 3 TVXQ members never agreed to participate the in Shenzhen concert.”
(Forgery of legal documents)
2010
SM Entertainment Representative Kim Yongmin Reported To the Police
On the 9th, Mr.W reported SM Entertainment, the talent agency associated with the popular Idol Group TVXQ to the Police Department in the Gangnam District of Seoul for defamation and disruptions to his business. It was revealed that he turned Kim Yongmin (40) the representative for SM Entertainment over to the Police with no hesitation, to be prosecuted.
The Police suspected that “The motivation behind the lawsuit involving the 3 members of TVXQ was simply their wish to terminate such a lengthy contract, and likely had nothing to do with the cosmetic company.” The Court of Justice partially granted the request of the 3 members of TVXQ to be freed from their contracts with SM Entertainment, last October.
(Disruption and defamation to a business)
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I have gathered only the information that I could find in published articles.
In reality, everything mentioned above is only what has been revealed to be public. But it’s undeniable that there are probably many more wrong doings by SM that are still hidden in the dark.
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It’s obvious that our Oppas probably suffered through a lot more than just the slave contracts than the articles will ever tell us.
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The courts have already accepted our Oppas’ appeal for the revision of the division of profits. It’s just that I’m worried about what kind of underhanded tactics SM will use against them in the process.
By: Popples Day

sources: Ohmynews, Osen News, Hani News, Newsen, fnnews (Note: This is not an exhaustive list)
translation: happy.colour @ OneTVXQ.com
credits: OneTVXQ.com { One World. One Red Ocean. One TVXQ! }
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