Friday, December 24, 2010

13 years. Is it really that long?

CJS (3 members who filed the lawsuit) claims that the 13 year contract is unreasonably long, and that's one of the reason why they sued the company.
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.

Here are the translations of the parts underlined in red. (I am going to translate the whole thing some other time)

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."
Section 3:
"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?



  1. It is good to have proof. Many long time loyal fans remember this incident, however very few fans remember the content of that resolution.

  2. @karenteh

    Isn't internet great? :)

  3. but if you look at it from the FTC POV they consider anything 7 years + to be a "slave contract"

  4. @bebe2pink

    First of all, KFTC(Korean Fair Trade Commission) does not use the words "slave" contract. No government branch will use such words. Also, you obviously do not even know the details of their guideline.

    Here's what KFTC's standard contract says regarding the length of the contract.

    Contract term: Unlimited, but singers can terminate the contract after 7th year.
    Exception: Singers with overseas activities (TVXQ anyone?)

    If you don't believe me, get it directly from KFTC website.

    You're on your own with the translation, or you can wait until I put it up.

    I'm not going to start arguing thru comments. I am going to cover everything in the future including the KFTC standard contract for the singers.

  5. Could you translate the whole thing? I would like to read it complete if is not too much to ask, Thank you~

  6. @ Puppeteer

    I already did. :)

    Go to the "Roadmap to the truth" page to read everything in order.

  7. I just couldn't say more !! I'm just grateful, there's someone like you who put the big effort to disclose the details. Thank you !!

  8. HoMin should thank you for enlightening their fans. Hope more people will b e able to read this.

  9. It is NOT ironic that JYJ sued sm 5 years later. There is much more conflict going on between SM and Dbsk beneath the surface.
    Back in 2004, it was either change the contract to 13 years or lose one of their members (Yunho according to other documentations). They were FORCED to amend the contract and they did. This only shows that there was an extremely strong bond between the members. Hence, since JYJ sued SM after 5 years then it must mean that they TRULY can no longer accept SM's ridiculous terms to the point where they risked their entire career and friendship.

  10. @ aleese
    LOL, if you are going to come in here and argue, you should get your facts straight. The contract term was set to 13 years in Dec 2003, (Jan 2004 for Yuchun) according to the injunction judgment, and it was supposed to be Jaejoong who was going to be replaced during the rotation crisis in late 2004.

    Also, there was a brief mention of Yunho being replaced, but that was when they were trainees during dream team days (on or before 2003), and it was supposed to be just a "happening". BTW, that "other documentations" is the trial transcription that was held on Dec 17, 2010. So please learn your facts first before spouting rumors.

    BTW, which ridiculous terms that CJS couldn't accept, can you tell me? Have you even read the contract?

  11. @Precious

    "Yunho’s father believed 10 years were too long, and Yunho signed for 7 years instead. After the signing, SM actually decided to pull Yunho off the team. Jaejoong and Junsu strongly fought and reobtained Yunho’s place on the team, and the aforementioned change was made to their contracts, increasing all members’ terms to 13 years. The “rotation incident” happened after their debut. (T/N: “Rotation” refers to SM’s plan to make TVXQ a team of continually changing members.) SM, again, decided to replace Yunho with a trainee, and this was when the parents of all five members, who wanted to save Yunho, signed a written agreement which asked SM to protect the current state of TVXQ for the next 13 years."

    You're right in saying that 13 years isn't an extremely long contract but ONLY IF the artists were treated with proper payment and were given fair rights. Have you listened to Yoochun's Nameless? They were the tops stars in asia yet they had negative income. Stars in the Western countries would be earning millions while DBSK had to struggle to pay for their expenses. Do you think it's fair to be working so tediously for a negative income?

    I meant that DBSK could no longer accept SM's ridiculous terms

    ^Why do you think SM initially denied to show documents related to detailed income distribution between the company and the members?

    It is pointless to argue because we, as third party people, will never know the conflicts that occurred between DBSK and SM during the past few years. Although I am trying to defend JYJ's decision to sue SM, I know that there are countless other people (like you) who will disagree with me. There are holes in my argument just as there are in yours. Instead of arguing with one another, I'd much rather just wait patiently and support all 5 members.

  12. @ aleese
    I asked you to get your facts straight, but you are only quoting articles from the jyj site.

    As for the claim that Jaejoong and Junsu fighting for Yunho, the court witness testified that it was just a "happening". She never said Jaejoong and Junsu "strongly fought" for Yunho so your link is full of lies. Like I said, get your facts straight instead of relying on a biased article. Did you even know that info is from a court testimony?

    Also, are you attempting to convince me with Yuchun's lyrics like it's some sort of an evidence? You are so blinded, you don't even realize how ridiculous that is. Try that in the court and see how well it works. BTW, do you even know that Yuchun already got some advance payment from SM, resulting in negative balance? He got advance payment around $200,000, but had gulls to complain about not being able to borrow more money from SM? BTW, CJS still didn't get paid from 2009, so the lyric (if it's even true) must've been before 2009 when TVXQ didn't make much money.

    As for the contract terms, obviously you didn't even read my posts explaining it. Everything is explained in detail unlike the post you linked that only shows partial info to mislead readers. I actually posted 7 articles just on the contract alone, so don't just throw a link to a biased article to prove anything to me. Read these and learn something.

    It's you who started the argument, so why did you even start if you thought it was pointless? Yes, we are outsiders, but I believe I am much more knowledgeable than you who just believe everything you see without even thinking.

    If my arguments have holes, point them out like I did to yours instead of just talking.

  13. If that time TVXQ not so popular in japan and korea and SM only deal 5 years to manage them. maybe they will beg to SM to have long contract.
    what i see is how smart SM looking for talented artist. their prediction is good.
    5 years later. TVXQ in most high popularity. who didnt want TVXQ? maybe there is a lot of company out there who want own TVXQ. They will use anything to make SM down.
    but they failed. SM have Yunho and Changmin who very loyal to them.

  14. While you have documents to back up your claims, you seem to lack human emotion. Let me ask you a question, if you were told that your employer is considering swapping you in and out of your job which you absolutely MUST keep, would you not sign anything to convince them not to?

  15. @ Nikki
    Emotions? That's something new. I'm trying to present facts, not emotion. That resolution was drafted by the parents to pressure SM to keep all 5 and was signed on their own. That was signed AFTER the plan to rotate the member was canceled.

    Let me ask you a question. Do you sign a resolution when your company transfer you to another department? My question sounds ridiculous, doesn't it? So did yours.

  16. @Precious

    I think you misunderstood me.
    I meant to say, when faced with the scenario of being dropped, anyone would be emotional and rash enough to do anything.

    I would sign a resolution AFTER the plans was dropped to make sure the plan is not reinstated. While it seems ridiculous to you, I don't think it's unreasonable.

  17. @ Nikki

    By saying that, you are implying they would do anything to protect their interest, and would act on emotion rather on logic, and I cannot agree with that. If that's the case, HoMin would've left SM with CJS.

  18. @Precious

    You're forgetting that that was 7 years ago. 7 years later, people grow and mature and all that. So it is unreasonable to say that 7 years ago, at their debut, they weren't rash and emotional and desperate?

  19. @ Nikki
    Yes, but it was the parents who signed the resolution.

  20. @Precious

    You have a point. But are you saying parents are not subjected to bouts of irrational and emotional behaviour?

    I guess I'll stop here. Seeing as you are rather firm on your stand and are ready to go all out and about to not entertain the slightest bit of doubt, which troubles me for 2 reasons.

    1. You are either very stubborn or
    2. There is more to you than you let on

  21. @ Nikki
    Now you are making assumptions about me. What you just said could be easily applied to you as well.

  22. @ Nikki
    BTW, have you ever thought about the possibility that CJS may be in the wrong in this case? Just something to think about.

  23. @Precious

    Of course I have. Life is not a zero sum equation. One does not have to be wrong for another to be right, and one does not have to be good for the other to be bad.

    Have you ever thought of the possibility that both HoMin and CJS may be wrong? Or that even Homin, CJS and SM all have a hand in this undoing and scandal?

  24. @ Nikki
    Yes I have, but from what I've seen, I couldn't really find anything wrong from HoMin and SM. Have you found anything?

  25. @Nikki:
    1.I don’t think that TVXQ’s parents were somehow forced to sign that resolution because of worrying their sons would be replaced in the future, they already signed 13 years contract with SM before debut (except Yoochun did in 2004). My point is SM doesn’t need that resolution at that moment unless thay can predicted about the lawsuit.
    sorry for my bad English.
    @Precious: Thank you very much!

  26. @precious thanks for all your translations about the case!

  27. (I think my comment is a bit too long sorry ^^;;)

    Above comment: “ … but I believe I am much more knowledgeable than you who just believe everything you see without even thinking.” LOL That sounds so arrogant yet so true! XDDD *thumbs up*

    I didn’t knew about the spam system in here. So I guess it’s better to put all my thoughts in one comment instead of putting it into a comment relatet to the right article.

    As for the damaging evidence you talked about in your article, after I asked you about it and posted my comment I was already pretty sure that you mean the 62.5 % shares, it’s good to know that I got the hint. xp

    Again, I have some questions.
    There are many sources which say that Changmin and Yunho had other contract terms as the other three. They say that the JYJ’s contract duration is 13 years but HoMin’s is only 7 years, so I was quite surprised when I read your article. What is right?

    Furthermore there is something I don’t quite understand: concerning the resolution of 2004 you say that the parents signed it to urge SM to keep the 13 year term, but naturally you would think that they signed the resolution to keep the 5th member. You say that the 13 year term was elemant of the contract since 2003, so isn’t it possible that SM insisted on that clause without giving the parents any say in this one point? And in 2004 the parents accepted this clause already as part of the whole contract and signed the resolution to keep the 5th member and because it is an official document of course there must be every clause concerning the contract written down in it, so the 13 year clause as well. I rather see it like this.
    You said in one comment above that they signed this resolution after they canceled the rotation plan, but what is the point in signing a resolution if the problem (the rotation ot the 5th member) is already solved?

  28. (part two, again, I’m so sorry to bother you with my long comments, I’ll try to put it shorter in the future >.<)

    And now I have something to add, hehe ;)
    I don’t know if it is written somewhere in your documents but I heard from one very reliable source that there was an incident when Yunho was meant to be replaced during the last contract modification in 2009. It might be wrong cuz I really can’t imagine that someone within SM has such an obscure idea, but I heard so… :/

    Oh and something else, somewhere above there was a argument wheter or wheter not the parents signed the contract because of emotional pressure. Well I don’t know if you knew the parent’s occupation already. Junsu’s dad is running a pizzeria, Yoochun’s mom is housewife (as far as I know), don’t know anything about Jaejoong’s parents BUT Changmin’s both parents are teachers (his mom now is houswife though originally she was a teacher as well) and Yunho’s from a lawyer and judge family.
    So this is why I doubted the whole lawsuit fraud in the first place. Why would people who have a high academic education let their children sign such a unfair contract. And, point two, why are only the members with “lower academic family background” leaving the group? Why won’t the two others with higher academic family background use this chance to get out of this company, too? So,yeah. I think you know what I’m trying to say. XD There is absolutely NO way that anything was signed by Mr. Shim or Mr. Jung (at least Mr. Jung) under some kind of pressure.
    I know it is a bit mean to use their parent’s occupation as argument, but most of the time it works pretty well kkk

  29. @ pfau
    Yunho's contract term was initially 7 years because Yunho's father didn't want the longer term, and everyone else had a 10 year term. Later during the first contract amendment in 2003, everyone's term was changed to 13 years.

    As for the resolution, the decision to cancel the rotation was already made, so if the only purpose of it was to keep all the members together, there was no reason to mention the 13 year term. The purpose of the resolution was to urge SM to keep the contract, including the 13 year term, without any change so events like rotation doesn't happen again.

  30. @ pfau
    I don't know who your source is, but the info you have don't even match the rumors spread by JYJ fans. Some JYJ fans are spreading that the rotation member was Yunho, but that is not true. There was no such rumors in 2009. As you said yourself, it doesn't make sense at all. SM would be the last party that would want to break TVXQ apart. I mean what company would want to breakup a profitable group especially in 2009 when they were making the most money?

  31. @ Precious
    Thank you for the many explanations. :) I still have a lot to learn but thanks to you each day I understand more about how things are. And because of that it is more and more easy to differentiate which news about TVXQ are twisted and which may be right, so I can help others to understand the situation a bit better as well. ^^
    Thank you for the many hours of work you put in this blog. >3<

  32. Precious, is there any proof that the member who SM wanted to change in 2004 is Jaejoong?

  33. Besides, I don't remember which entry I read from your blog, but there was a capture of the documents that showed the date when the members signed their contracts. It stated that Junsu signed in 2000, Jaejoong in 2003 and Yoochun at the beginning of 2004. The second time they signed them is in 2007 with all the 3.

    If the first time they signed it, they accept 10 year long term, so when did they change it into 13 year between 2003 and 2007? If they did, why isn't it stated in the document?

  34. Oh I see now, Thank you very much ^^

  35. @ Aise

    There is no definite proof of any particular member being the member to be rotated, but at that time, many fans believed it was Jaejoong. A group of Jaejoong's fans even went to SM office to complain about it.

    All 5 members modified their contract term to 13 years during the 1st contract amendment. That was stated in the contract. The date of the 1st contract amendment is in this post (Yuchun: 1/12/2004, rest of them: 12/3/2003). Rotation happened towards the end of 2004.

    That table is from the judgment document from the temporary contract injunction. You can download the full document from the Korean court website.

  36. @ Aise
    I corrected some of the misspellings & grammatical errors and re-posted my reply, so your reply is appearing before mine. :)

  37. Is their 2 years of army service included in the 13 year term?

  38. @ yunho2
    No it's not, but it really does not matter because the 2 years of service has nothing to do with their work. JYJ fans try to include that 2 yrs to make the contract seem longer, but what does the service have anything to do with the contract or SM? Whether the contract term is 4 years or 13 years, the army service is mandatory for every male in Korea. It's not like military service benefits SM or the artists. Those 2 years are lost years career wise for every Korean male citizen.

  39. @ Precious, you are absolutely amazing! Thank you so much for your time and for clearing things up and providing valid evidence. I totally appreciate everything that you have done. I have only read a small proportion of your blog and i am already mesmorised. I have always believed in Yunho and changmin (although i know that isn't evidence whatsoever), but this has shown that my feelings during the time of the lawsuit was correct. What you have said does not try to sway people's opinions because you only state the FACTS, unlike 'some' people.

    I will certainly continue to read your blog and i hope that more people open their eyes and think before they jump to conclusions then blaming innocent people. It is perfectly fine to support who you want, but to talk ill of others and spread rumours is disgusting.

    Once again thank you and keep it up :)

  40. @ TVXQ_forever

    Glad it helped. The truth was out there, but they it was just covered by lies and deceit, especially for i-fans. Welcome to my blog!

  41. Thanks for taking the time and effort for making this blog. Just had one question regarding the number of years of the contract. It is similar to yunho2's qn. I wanted to know if the contract is actually 15 yrs with the addition of the 2 years at army. SM would potentially lose 2 yrs of income if TVXQ were to go to army after all. And if i am not wrong any leave taken for personal reasons will be added to their contract time as well. Thanks for your time

  42. K-Pop's slave contracts - a glance at South Korea's entertainment industry

    Given the fierce competition in post-academic life, South Korea’s schooling system is known to be one of the most rigorous in the world: after studying at school, it is common for students to attend hagwons, or cramming schools. The more privileged also hire tutors to learn to play an instrument, prepare for an exam or improve their fluency in a foreign language. Those who find the time may also undertake taekwondo, swimming, or some other physical activity before doing their homework and starting all over again the following day.

    Korea’s military, too, is known for being harsh and at times, bizarre. During winter military drills, troops go topless, throwing snow at each other while screaming or plunging into ice-water to perform cold-weather training in weather that hits lows of -22° C.

    But harshest of all seems to be Korea’s pop industry, which trains and regulates the lives of its subjects to such an extent that some, like the Singaporean 23 year old Elaine Yuki Wong, could not help but leave.

    As Elaine writes in a blog post, she is “not allowed to share [information on] the training [in Korea] or anything regarding [her] girl band – what [she’s] gone through, what they taught, [what her] schedule is like.” However, she asserts that she decided to quit due to health concerns and the overall conditions in Korea “being too tough.” In a heartbreaking sentence, she also admits to have broken down lots of times, not being able to take it.

    Nevertheless, some good did come of it. During her ascent to “going-to-be superstar,” despite the extremely rigorous training and diet plans that entirely controlled her life “as though [she were leading a life] how they want it to be,” she gladly reminisces the special times when she danced with her band, “sang together, ran together, exercised together, sleElaine Yuki Wongpt together, washed [their] hostel together, cooked together, went for concerts together, took photos together … cried and laughed together.”

    She writes, although she looks the same, this experience has changed her deep down: whereas she was quick to “laugh things off” in the past, she no longer does. And to her, this newly acquired seriousness is a good thing. Living in a foreign country where she couldn’t speak the language was hard, and despite her refusing this once-in-a-lifetime chance to become a star, this bright young girl expresses gratefulness for being able to “do whatever I want to, go wherever I want to and meet whoever I wish to.”

    In a penetrating last sentence, she writes, “Something I learned: Life’s not about fame. It’s about being happy.”

    Being happy. It is hard to keep fighting for this when the industry behind you is worth more than $3bn a year.

  43. (part 2)In an interview with K-Pop star, Joy “Raina” on Al Jazeera, the young girl says “before we debut, we don’t have phones. We cannot call or hang out with friends. Of course no boyfriends.” Their rigorous contracts cast them into the position of puppets rather than individuals with very human needs. They are serfs to a system that is so big and lucrative that management is often taken over by greed: for instance, K-Pop band Kara claimed their concerts were being overbooked, and their fair share of profits was being denied to them.

    South Korea’s entertainment industry is becoming increasingly lucrative as its pretty boys and girls, catchy tunes and dance moves cajole fans in Japan, the U.S. and also Europe. According to the BBC, K-Pop star Rain was voted most influential person of the year in Times magazine, and the boy band Big Bang saw a meteoric rise in the U.S. iTunes store, reaching the top 10 album chart.

    However, as Elaine’s story suggests and as the BBC reiterates, “some of K-Pop's biggest success stories were built on the back of so-called slave contracts, which tied its trainee-stars into long exclusive deals, with little control or financial reward.”

    Dissatisfied with their preposterously demanding contract, one of the most successful bands in Korea, Dong Bang Shin Ki, sued their management company in 2011. An entry on The JYJ Files summarizes the March 15 hearing between SM Entertainment and the boy band. The explanation for the comically low earnings they were receiving was due to “overhead expenses,” which were revealed to be “snacks, daily expenses of SM executives and staff, parking fees, cold medicine, meals, entertainers’ transportation, rent, concert agents’ costs, various taxes and expenses that should have obviously been covered and borne by SM.”

    The blog explains SM’s claim that in 2008, out of the total 14.7 billion Won (US $12.6bn) in earnings, only 1 billion ($857,000) came from Dong Bang Shin Ki – the rest came from other groups such as CSJH, BoA and the Trax. Out of the total 3.4 billion Won ($3 million) earned in Dong Bang Shin Ki’s world tours, SM “subtracted 900 million won ($771,000) as agents’ fees.” As the blogger comments, the more active the group, the more money they lose: “how is there anyone that thinks this makes any sense?”

    Unfortunately, the “long exclusive deals” do not only refer to 14-hour work days.

    K Bites writes, the contract at SM Entertainement of one of the members of Girls’ Generation, Yoona, was 13 years long – just like TVXQ’s. Super Junior’s and SHINee’s members have contracts that range from 5 to 13 years.

  44. (part 3)The blog quotes a member of Super Junior as saying

    “Even if I wanted to move to another agency, the time left [for my contract to expire] and the compensation I would have to pay would be too big to handle. We have to split our income into 13 so we don’t get as much as people think we get.”

    Upon the Fair Trade Committee’s inspection of some 20 entertainment agencies, many unlawful clauses were found in the artists’ contracts, such as “The Star must tell the Agency of their exact location at all times,” or “If the Star decides to cancel his/her contract, the Star must stop all activities relating to or resulting from the Star’s celebrity status.” Whereas the agency is well protected in these contracts, as Seoul Beats evinces, trainees can be kicked out at any point if they show signs of under-performance.Super Junior

    The training sessions have no fixed duration: whereas Wonder Girls member, Ye Eun, trained for merely three months, 2AM member, Jo Kwon, trained for seven years.

    K Bites explains how, often, the stars making more money must compensate for those who make less, or for the teens who are trained from a young age but eventually fail to make the final cut. Some teens make it, sacrificing their schooling and social lives for a dream they may not well understand at such tender ages. One such teen was artist Jaejoong, who left his family at fifteen to try his luck at becoming a pop star, working several jobs to maintain himself in the process. Given his dedication, he eventually enjoyed great levels of success.

    However, what he and many other Korean entertainers cannot forget, is the incredibly restrictive and demanding lifestyle they were put through before debuting. As South Korea becomes increasingly popular for exporting entertainment and ideals of handsome men and beautiful girls, one wonders if the entertainment industry will also become popular for its severity, unfairness and excessive greed.(article from May 2012)

  45. Originally, before Korean Fair Trade Commission released a new regulation in reaction to the JYJ lawsuit, male SM idols had contracts for 13 years since release of their first full-lenght album, plus military service, plus holidays or any other personal free days taken (sickness, family funeral etc.). So for example Junsu in TVXQ: 1998 started as a trainee, debuted Dec 2003, first full album Tri-Angle released Oct 2004, predicted end of his contract cca Dec 2019/ Jan 2020. That makes 22 years.


  46. Fair Trade Commission Korea ordered 8 companies including SM to correct their unfair actions and imposed penalty surcharge(900Milion KRW)

    - 8 companies including SM had founded the company called ‘I-KPOP’ together and sold their albums only through this company[illegal sole distribution] so that occupied 53.9% of total album market.

    - Especially FTCK exposed that SM made unfair contracts with the members of H.O.T, Fly To The Sky and other artists. The contracts contained the clauses saying ‘an artist must pay 3-5 times as much amount as the estimated profits plus 50 milion-100 million KRW when he/she cancels the contract’.
    (Can you see such similarity to the contract that JYJ is fighting against? SM has been doing this for more than decades.)

    Funny thing is, SM filed a lawsuit for nullity against the above decision of FTCK.
    Shall we see what the High Court decided?

    Seoul High Court ruled against SM, saying “The corrective order that FTCK ordered against SM’s contracts which force its artists to pay excessive penalty was a RIGHT ORDER”.

    - Quoted from High Court’s decision:
    “An investor must take his/her risk of investment him/herself and SM abused its position by making excessive compensation for damages in order to re-collect the invested money used for one singer from another successful singer.”

  47. (part 2)
    SM’s model Min Ho You won a lawsuit to clarify invalidity of exclusive contract against SM Ent.
    (See there was the exactly the same lawsuit 6 years ago and SM lost the case?)

    - Quoted from the Seoul Central District Court’s ruling
    “The clauses regarding compensation for damages and the terms of the contract infringe the plaintiff(Min Ho You)’s economic freedom too much, therefore, the contract is invalid by the article 103 in the Civil Law** which defines ‘an action violates public morals and orders is invalid’.”
    “Terms and compensation for damages are essential parts of an exclusive contract, so whole of this contract should be invalid because those key parts are invalid.”
    “The defendant(SM)’s insists cannot be justified because an investor[SM] must take a risk of investment, also high profits are expected when high-risk business is successful even if it takes a lot of money and time for training.”
    “The amount of compensation for damages is too excessive as well as it gives too much financial burden to the plaintiff whereas there is no compensation for damages if the defendant violates the contract, therefore this contract has immoderate imbalance between the rights and duties of the both parties.”

    Fair Trade Commission ordered SM to correct its slave contract
    (poor FTCK.. I can’t even count how many times FTCK ordered the same things now..)

    - SM actor Ji Hoon Kim notified SM about cancellation of unfair exclusive contract on Dec 2004 and the both were having disputes for a long time (almost 3years) at the court.
    – His contract stated that 1) the terms of contract was 5 years from the date of his first appearance as a feature player and first album releasing date, and 2) he must pay 5 times as much amount as the total invested money plus the total estimated profits for the remaining period of the contract plus additional 100 million KRW.
    - FTCK intervened in this case and ordered SM to correct its contract regarding unfair amount of compensation for damages and long terms.

  48. (part 3)
    Seoul Central District Court approved the 3 members of TVXQ’s application for injunction to terminate exclusive contract.

    - Quoted from the ruling from the court
    “The above-stated exclusive contract which mainly contains long terms and excessive amount of compensation for damages infringe economic freedom and basic human rights too much because the management company exercised unfair domination and imposed inordinate benefits in return and unfair responsibilities on its artists by abusing its prominent position.”
    “This is an action that violates public morals and orders, therefore, there is a possibility that the validity of the all/parts of the clauses on the contract are invalid or subject to lapse as the reasonable period of existence has been expired.”
    “The respondent[SM] MUST NOT 1) make or negotiate any contracts against the applicants[Jaejoong/Yuchun/Junsu]’ wills related to their entertainment activities such as appearances in broadcasting/movies, concerts, production of albums and other entertainment events with any third parties, 2) raise an objection to broadcasting companies, album labels, production agencies and other third parties regarding the applicants’ entertainment activities that the respondent is not involved and 3) interfere their entertainment activities by requesting any third parties to break relationships and other way until the decision for ruling of the lawsuit on the merits is finalised.”

    - Legal expert Chan-Jong Park commented on this slave contract as:
    “SM took an enormous profit by abusing the members’ weak position as minors/trainees and making unfair contract. The company bound the members of TVXQ by maximum 13 years of contract which can be considered ‘lifetime employment’ when they were minors(under 19 years old), did not show the original written contracts to them and share the profits unfairly (ex: the members only could receive 10 million KRW for the next album if a previous album was sold more than 500,000 copies).”

    SM filed an objection against this decision and another injunction to terminate the validity of the exclusive contract between C-JeS and JYJ.

  49. (part 4)
    Fair Trade Commission ordered SM to correct its unfair contracts made with its artists and trainees.

    - Fans in Korea filed the petition with FTCK regarding SM’s unfair contract on Sep 09, 2009 after JYJ’s injunction.
    - FTCK started investigation on SM (again!).
    - SM ‘voluntarily’ corrected the conditions of contract with its artists after the investigation started, but also extended its contract with the trainees for additional 3 years in secret and FTCK warned such actions and ordered SM to correct this 3-year of extended contracts with its trainees as well.
    - Ironically, the fans’ action against the slave contract made SM artists had better contracts.

    Seoul Central District Court ‘rejected’ the objection against the approval of the above injunction.

    - Quoted from the court’s refusal letter against SM’s objection
    “The court hereby confirms the injunction approved on Oct 27, 2009, to terminate the validity of exclusive contract between the two parties.” (=the injunction approval in 2009 has no problem and still valid)

    “The debtor(SM) pays all expenses for objection.”

    Seoul Central District Court also rejected SM’s injunction to terminate the validity of the exclusive contract between C-JeS and JYJ.

    - Quoted from the court’s refusal letter against SM’s injunction
    “C-JeS Entertainment and the respondents(JYJ) only made a contact for agency business in order to manage their entertainment activities on behalf of them, therefore the applicant(SM)’s insist that they made an exclusive contract which has subordinative clauses is cannot be acknowledged.”

  50. (part 5)
    Seoul Central District Court ordered indirect order to SM to pay 20 million of penalty per each interference on JYJ’s activities

    - Quoted from the orders from Seoul Central District Court
    “Even after the court approved the injunction to terminate the exclusive contract on Oct 27, 2011, SM Entertainment held a press conference to force the members to follow the contract on Nov 02, 2011 and sent the contents-certified mail to Warner Music Korea to ask Warner Music not to produce/distribute JYJ’s World Wide Album. Those actions are acknowledged as interference in JYJ’s entertainment activities, therefore, the court hereby orders indirect order.”


    Translator’s note: Definition of Article 103 in the Civil Law**: ‘an action that violates public policies and morals is invalid’. It defines an action that violates public policies and moral as: 1) an action against justice (Ex: a contract inciting a crime with rewards), 2) an action against humanity (ex: prostitution), 3) an action extremely restricts personal liberty (ex: a contract restricts person’s psychological/physical/financial freedom too much, human traffic), 4) an action that one side forces unfairness on the other side by abusing prominent position (ex: excessive penalty for breach of contract) and etc.

    (The court also used this article on the approval of the injunction applied by JYJ. )

    In Korea, if something is considered as an action that the Article 103/104 in the Civil Law defines as violation of public policies and morals, it is considered as ‘absolute invalidity’ and no third party can insist on its validity any more. When the court brings up this article as the referred provision to judge the injunction of JYJ, it means that the contract between SME and the JYJ is invalid ‘unconditionally’ because it is considered an action that the Article 103 of the Civil Law defines.

  51. SM Entertainment and the group JYJ (Jaejoong Kim, Junsu Kim and Yuchun Park) who have been in dispute regarding the exclusive contract of the Idol group TVXQ failed to find an agreement and remained as far apart as ever.

    Seoul Central District Court Civil Department 47 held an arbitration date for JYJ’s exclusive contract dispute at Arbitration room #579 of Seoul Central District Court. The lawsuit was about to be ruled on Sep 13, but it was brought to arbitration by the court’s authority.

    The court held an arbitration date for about an hour with Young Min Kim, the CEO of SM Entertainment, and the both parties’ lawyers in order to urge an agreement, however, the both parties turned back after finding their different stances again, having no results.

    “There was no outcome at all”, said JYJ’s lawyer told StarNews, implying the arbitration was failed. He added that “We only set forth our own opinions in each stance. There was no change about the differences in opinions”.

    The court again suggested the both parties to have a mutual agreement. But, it did not set any dates for next hearings, and suspended the verdict indefinitely in the manner of having enough time for agreements. Therefore, the lawsuit that has been dragged out for 3 years since 2009, not become lost in the mists without an end.

    So far, there have been a number of arbitration dates since last May in order to try to reconcile their differences in opinion and the verdict date had been set soon, but the arbitration date was set after the court recommended the both parties’ mutual agreement.

    JYJ filed an injunction saying “We would the court to terminate the validity of an unfair contract” in 2009, and SM Entertainment filed a lawsuit to clarify the validity of an exclusive contract in April 2010 after the court accepted the injunction. JYJ also filed a lawsuit to clarify the invalidity of an exclusive contract too. And the court rejected all injunctions filed by SM Entertainment (Objection against the injunction ruled in 2009 and an injunction to terminate the validity of an exclusive contract –between JYJ and C-JeS-.), confirming that the exclusive contract between SME and JYJ is invalid and JYJ’s independent activities are guaranteed as well as legally right.(Sep 18, 2012) Original Link:

  52. To help understand what is means:

    - This is not about who wins the lawsuit, based on the fact that SM’s lawsuit (the above 2 lawsuits were proceeded at the same time) was finished before JYJ’s lawsuit. The result is already out – the contract between SM and JYJ is invalid. The main issue is now how much SM would have to pay JYJ as compensation for damages.

    - ‘Suspend the verdict indefinitely’ means more like ‘urge an agreement by force, in details such as compensation for damages’.

    - If the lawsuit is finished by the both parties mutual agreement: JYJ receives compensation for damages amounted by arbitration and the case would be finished without further verdict and the appeal/trial at the Supreme Court. (Arbitration results become the final)

    - I cannot say further why the court keeps suggesting mutual agreements and feel absolutely disgusted. I can only guess that there is the president election in December in Korea, and the present season is easily effected by political manner as all personnel matters of officials would be changed after the election. Some people say that Judges tend to very passive to make any verdicts during these times.

  53. [Transcription] 121031 JYJ, TVXQ and Kara mentioned on KBS News:

    Nowadays, there are so many teenagers who want to be an entertainer.

    However, as the popularity of the entertainers increase, so do the conflicts b/w them and their management companies.

    Fair Trade Commission (FTC) recently released new standards of exemplary trade between the entertainers and their management companies.

    The 5 member group Dong Bang Shin Ki that enjoyed the most popularity in its heyday eventually broke up into 2 groups after 3 members had legal disputes about the periods of contract, profit sharing, and etc., so-called “Slave Contract”.

    Kim Jaejoong: "I wish there will be a fair system that allows all entertainers to work under good conditions."

    Similarly, the group Kara went through a breakup crisis, where the root of the controversy was a conflict with their management company surrounding the unilateral contents of their contract.

    So the key point of the new standards of exemplary trade released by the Fair Trade Commission is to eliminate conflicts over unequal profit sharing.

    From this time onward, management companies must make financial records available to any entertainer who demands it within a week and must pay the money an entertainer earned within 45 days.

    Also, the practice of having an entertainer appear in a TV show/movie free of charge or without his or her consent is now banned.

    Regarding teen and female entertainers, a separate policy of human rights protection must be made and shown (to FTC).

    These new standards will also be used as an autonomous guideline for solution of conflict in the event of conflicts between management company and affiliated entertainer.

    Additionally to prevent would-be entertainers from being swindled information of entertainment management companies such as facilities, personnel, financial position and etc. will be made available online.

    Fair Trade Commission stated that from this time forward if management company is caught committing any offense with relation to the standard of exemplary trade, it will be strictly punished applying the Fair Trade Law.

    * Watch video:

    * CREIDT:
    Translated by Sofia (@126x204) and proofread by Nikki (@jae2thejoong) ^-^

  54. Interesting read. But I also read copy of SME contract that is similar to the one signed by TVXQ in 2003. In the clause pertinent to this discussion, the clause said that SME can unilaterally extend an artist contract length for overseas activities. Although this document contends that the parents signed for the extension, they really have no choice since it's already written in the contract. Since the most members were still minors in 2003, parent's approval were needed.

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  56. Where is precious now??? I am looking forward for her come back post..