Also, that 13 year term is the most popular weapon for the people who labels the contract as a "slave" contract.
While I agree that 13 years of duration seems long at first glance, but it made me think: "Does it really make the contract a slave contract?" What are the benefits of a such long-term contracts, and what are the disadvantages? Did SM just force TVXQ to sign a long term contract just because they had the leverage?
If you look at sports athletes, long term contracts are preferred because of job security, and their contract usually have guaranteed money even when they're injured. It also provides stability during their career because you get to play in one team for a long time, so usually only top athletes get long term contracts. For a regular joe worker who gets paid salaries, the long term contracts may also be preferred, again for job security. Even for musical artists, you don't really want to sign a short term contract for obvious reasons, so some duration of the contract is desired. From these thoughts, one can at least say that you cannot determine the fairness of the contract solely based on the duration, and it changes depending on the situation.
So let's take a look at TVXQ's duration.
SME claims they needed longer time because they were planning to market TVXQ not only in Korea, but in overseas as well, thus requiring such contract. They estimated that they needed 3 years in Korea, 7 years in Japan and 3 years in China. They already had sent artists in Japan, notably BOA who had huge success in Japan, and SES who didn't make it in Japan. According to SM rep's testimony during the trial held on Nov 16, 2010, SES, who had a 5 year contract, failed in Japan because of their short contract. From that experience, SM decided TVXQ needed longer contract than the usual 5-7 years.
Ok, so the company needed a long term contract, then how about TVXQ? Were they forced to sign that contract even though they didn't want to?
SM claims that their plan was explained to the members & their parents (back then the members were minors so the contract was signed by their guardians), and all the members signed the contract voluntarily with the understanding why such long duration is needed.
Well, that's still just SM's claim, but how do you really know the members really wanted that long term contract?
The proof is in the resolution signed by the guardians of 5 members during the "Rotation Crisis". The Rotation Crisis happened when SM planned to replace one of the members with another trainee in 2004 for their activities in China. After SM canceled the plan because of the huge outcry from the fans and the members' protest, their parents drafted a resolution, urging SM to keep their initial 13 year contract and keep all 5 members of TVXQ together.
Here's the scanned copy of the resolution signed by the member's parents.
Scanned doc Section 2:
"TVXQ is currently composed of 5 members (names of the members...) ...The parents believed that the overseas partner (Avex) wanted longer contract for the overseas activities, so we signed an amended contract which extended the duration of the contract, and it is 13 years."
Right below that on number 1:
"We will not recognize any act of SM that violates the contract."
"We the parents, strongly urge SM to keep the plan as explained to us initially."
And the last sections underlined in red (statement by the parents)
"The TVXQ rotation crisis in 2004 brought huge shock waves. SM insisted strongly on the plan, but they cancelled it thanks to the fans, fan sites and the parents working together as one.
Therefore, even though the plan didn't see the light, this resolution prepared and signed by the parents for the purpose of urging and pressuring SM to keep the faith with TVXQ, also contains our strong will and desire to keep all 5 members of TVXQ to work with SM for 13 years."
And there it is. The 13 year contract was agreed upon by both SM and the members, and they all understood why it was necessary. The parents even signed a resolution urging SM to keep it.
The fans now know the result of that contract. TVXQ struggled early on in Japan for a couple of years, but they eventually became huge in Japan and are considered to be one of the biggest musical act in Asia.
Isn't it ironic that 5 years after signing that resolution urging SM to keep the 13 year terms and the contract, 3 members of the band sued the company using that same contract as their excuse?