Korean K-Pop Idols JYJ Win Contract Break

After a three-and-a-half year struggle, the phenomenally popular K-pop group JYJ has finally won its campaign to free itself from SM Entertainment, South Korea's biggest talent management company.

The settlement, in closed-door arbitration, leaves SMS and other Korean impresarios facing a rear-guard action to preserve contracts made with other unwitting adolescents in their stables that usually run well beyond a decade and longer.

The members of JYJ, Kim Jaejoong, Park Yuchun and Kim Junsu, had been caught up in a 13-year iron-clad contract that left virtually no possibility of being paid commensurate with their previous earnings as three fifths of Asia's premier pop phenomenon DBSK/TVXQ, which they left to form their own group.

The JYJ legal wrangle with SME actually ended to all intents and purposes some time ago. JYJ filed an injunction to invalidate their contract in 2009, which the court accepted so that JYJ could continue to work and conduct independent activities. In April, 2010, however, SME sued to clarify the validity of the contract. The court ultimately affirmed JYJ's side and further ruled that SME was to pay a fine for each known instance of interference in JYJ's career activities, which were many and varied. In the meantime, despite the group's phenomenal popularity, Korea's entertainment world cartel came down on them, effectively keeping them off the air, not only in Korea but Japan as well.

On Sept. 13, the Seoul District Court postponed indefinitely a reading of its verdict in the final case in favor of mandatory arbitration. South Korea's broadcasting networks agreed that they would uphold the ban "until a verdict is reached in the lawsuit," despite the fact that the court said two years previously that SME's action was illegal and punishable by a fine. That meant that as long as SM continued to stonewall, refusing to budge in negotiations on how much money it actually owed, the banning of the group continued.

"What we were worried about was that literally every artist in the K-Pop industry was going to benefit from their fight except JYJ if this case sat in the limbo of mandatory arbitration indefinitely and SME simply refused to compromise," one observer said.

The instances of interference with JYJ's career activities during the three and a half years of the legal battle were numerous, continuing and well-documented, as pointed out in an Oct. 9 Asia Sentinel article here.

Given SME's economic clout within the industry, the entertainment giant has been accused of having a serious impact on JYJ's ability to perform on any broadcast media outlets, including radio and TV. JYJ were banned from award shows, concert venues inside South Korea and various music charts.

However, in a press statement on Nov. 28 SME suddenly said it had decided to wrap up the issue "to avoid bringing additional harm to U-Know Yunho and Max Changmin, (the other members of TVXQ (DBSK), and to avoid making any more unneeded issues."

The three "have confirmed that they are not willing to be active any longer as TVXQ, and so SM Entertainment has decided that there is no need for the company to continue to manage the three." According to the release: "We have also decided not to interfere in each other′s matters in the future, and this is how the trial has come to an end with today′s hearing."

Like everything else South Korea approaches, including devoting fanatical attention to quality in the manufacture of cars, television sets and consumer electronics, the production companies practice some of the most intensive entertainment training on the planet. They have reaped the rewards by creating K-pop groups whose influence has spread far beyond South Korea's borders. Girls' Generation, another SME-managed group, has appeared on the popular David Letterman show in the US.

SM and other entertainment management companies have defended these long-term contracts by saying the costs of housing, grooming, feeding and training adolescents for five years or more can run into the millions of dollars and that such onerous contracts are a way of getting their money back.

Nonetheless, the furor over the so-called "slave contracts," in which some pop stars make little more than US$150 per month while earning the production companies millions, has had a serious impact on the bottom line and stirred wider concerns.

For instance, the Korea Fair Trade Commission some months ago ordered sweeping changes regarding how long contracts can be in effect and demanded many other changes for the entertainment companies based on revelations at the JYJ trial.

On Nov. 14, SM Entertainment experienced what analysts refer to as "earnings shock" when third-quarter results were less than half what they told analysts to expect. The share prices nosedived, taking many other entertainment shares down with them and earning a shower of complaints and inquiries from institutional investors. In the week following, SME lawyers abruptly restarted the long-stalled negotiations that had held up the JYJ settlement.

As recently as two weeks before the JYJ settlement, SME claimed that their disastrous results were attributable to huge production costs of TVXQ and Super Junior Arena Concerts. This assertion seemed self-serving to fans in that SM was regarded as blaming their artists for bad financial decisions over which they clearly and contractually had no control.

Thus final question is whether JYJ will be allowed back on South Korean television. Their popularity and best-selling albums would seem to indicate that they deserve to be there. Yet their remarkable domestic and international fandom is if anything more concerned than ever that even with the affair's conclusion, SME's ability to control the dialogue could mean TV producers will continue to give one excuse after another as to why they may not appear.

Executives of media outlets have so far not been particularly encouraging on the subject. When asked about the conclusion of the case, KBS Chief Director Chon Jinkook told local media said "I think we can tell about our position after taking and arranging the situation. As the main reason was the ruling.. So, in my opinion, there's no reason to block their appearances on our programs if it is clearly solved."

Won Mansik, the Chief Director of station MBC said: "Although the ruling was over. I think their appearances need time." Another MBC official said "We have no discussions about their appearances on our programs (including our music programs and entertainment programs) until now. I think the whole entertainment part should think about this for now."

Park Seungmin of SBS 'Inkigayo' said "It's the problem of the whole entertainment part. We still have no discussion about this.. So I have no words about this?"

Fans of JYJ have vowed to see them on TV. They will not back down easily. With the November 28 ruling, the lawsuit is over and JYJ have been granted their freedom. But what's next remains uncertain.

(The writer is a US-based songwriter and music publisher concerned with the cause of justice for recording artists in South Korea.)