South Korean entertainment giant HYBE revealed that it has invested KRW 21 billion ($14.4 million at current exchange rates) into developing K-pop group NewJeans, and that each member allegedly received settlement payments of about KRW 5 billion ($3.4m) amid their legal dispute.
That’s according to statements made during a court hearing on Friday (March 7), as reported by news outlets out of South Korea.
The news comes as HYBE subsidiary ADOR sought an injunction in Seoul Central District Court to prevent the five-member girl group, who recently rebranded as NJZ, from pursuing independent activities without company approval.
“More than 50 staff members — including stylists, choreographers, video directors and managers — were dedicated exclusively to NewJeans’ success from their trainee days,” ADOR’s lawyers were quoted by The Korea Herald as saying.
“HYBE invested KRW 21 billion in ADOR in two separate rounds, an unprecedented amount for a single group.” While ADOR operates as a label under HYBE, the subsidiary’s first and only K-pop group is NewJeans.
ADOR’s lawyers added: “HYBE invested KRW 21 billion won into ADOR, and NewJeans has been generating significant revenue since 2023. It defies logic to suggest that a profit-driven company would sabotage one of its biggest earners.”
ADOR’s representatives further argued that each NJZ member has received settlements of approximately KRW 5 billion , showing that the company fulfilled its contractual obligations, AllKPop reported.
“HYBE invested KRW 21 billion won into ADOR, and NewJeans has been generating significant revenue since 2023. It defies logic to suggest that a profit-driven company would sabotage one of its biggest earners.”
ADOR’s Legal Team
“The essential obligations of an exclusive contract are to provide opportunities for entertainment activities and to settle profits. ADOR has fulfilled these obligations, which is why NewJeans has become a global star. Each member has received a settlement of KRW 5 billion,” ADOR’s legal team reportedly said during the hearing.
ADOR has expanded its legal action to request a complete ban on the group’s entertainment activities following their rebranding announcement and plans to perform at ComplexCon Hong Kong later this month.
Prior to the name change, NewJeans members in December 2024 said continuing their relationship with ADOR would expose them to further damage. “We are likely to suffer even more harm in the future,” the members stated. ADOR maintains their contracts remain valid until July 31, 2029, even after NewJeans held a press conference in November 2024 to announce that they had left ADOR.
NewJeans’ legal team has said the dispute centers on an alleged breach of trust.
“HYBE’s extensive media play (against NewJeans), its plans to replace NJZ with a new group, the Illit plagiarism controversy, and ADOR’s collaboration with Dolphiners Film — none of these incidents happened to other HYBE artists,” NewJeans’ lawyers were quoted by Korea Herald as saying.
NewJeans also accused HYBE, which also manages global superstars BTS, of orchestrating a media campaign against them and planning to replace them with another act.
“The core issue here is that HYBE and ADOR continuously sidelined and ostracized NJZ, intending to replace them with another group,” the members reportedly said. “ADOR is now demanding that we remain under their control until the court rules on contract termination. This essentially forces us into a ‘slave contract’ where we are bound to an agency that has already abandoned us.”
A separate trial addressing the validity of NewJeans’ contract termination is scheduled for April 3.
“The core issue here is that HYBE and ADOR continuously sidelined and ostracized NJZ, intending to replace them with another group.”
NewJeans
In February, five trade groups representing South Korea’s K-pop industry issued a warning about the ongoing dispute between HYBE, ADOR and NJZ, saying the case could destabilize the industry if it sets a precedent.
“If tampering attempts succeed, Korea’s entertainment management industry will collapse,” the groups said in a statement, as quoted by The Korea Times.
The latest developments come as HYBE recently reported that it swung to a net loss of KRW 3.38 billion ($2.48 million at the average exchange rate for 2024) in 2024, versus a net profit of KRW 183.45 billion in 2023, amid rising costs and weakness in its recorded music segment.
BTS, once HYBE’s top earner, accounted for less than 20% of the company’s revenues in 2024.
“The decline in profitability was primarily attributable to BTS‘ temporary break, a shift in the artist sales mix due to new debuts, and strategic investments in infrastructure and new growth businesses like Weverse and gaming,” HYBE said in February.
Music ComeOn
