Monday, December 27, 2010

Translation of the Contract - Profit Distribution (Korean & English)

I have translated the parts of the contract that deals with the profit distribution. The translations are in blue letters.

Here's the link to the post with the original contract in Korean.

As you can see, the distribution of the profits look pretty good, especially the profits TVXQ receives from Japanese activities where they got bulk of their profits.

제9조(이익금의 분배-음반)
Section 9. (Distribution of Profits - Albums)

(그룹 경우 구성원 수로 균등분할)
Distribution of Profits (Entertainer) For groups, divide the profits equally per number of members
국내음반 및 패키지상품수익
(해외 라이센스 음반 포함)
본 수익배분은 정규앨범,
DVD에만 적용
2차 편집물(라이브음악, 베스트음반, 옴니버스음반, 기타 모음집 등)은 제외
Domestic Album & Packaged products (including Licensed Albums sold overseas)
This distributions only applies to regular Album & DVD
Secondary compilations (Live music, Best of albums, Omnibus Album, other compilations) are not included 
5만 1장 ~ 10만장
50001 to 100K
매출의 2%
2% of Sales
10만장 ~ 20만장
 100K to 200K
매출의 3%
3% of Sales
Over 200K
매출의 5%
5% of Sales
디지털 유무선 다운로드(음반, 음원)
단, 온라인 무료 다운로드시 일정 광고수익이 발생되었을 경우
Digital Wired/Wireless Downloads (Album, Songs)
Except for free downloads Online, only when there's income from advertisement  
순이익의 10%
10% of Net Profit
음원 유통
- 온라인 및 유무선 인터넷, MP3, 디지털 음악 파일 및 유통 포함
On Line and wired/wireless Internet, Mp3, Digital files etc
순이익의 10%
10% of Net Profit 
(일본지역 내 에스엠 재팬을 통해 발생된 매출)
Overseas Revenue
(Revenues in Japan produced via SM Japan)  
(해외현지 제작음반)
Performance Loyalty
(Albums made overseas) 
순이익의 70%
70% of Net Profit 
(‘을’이 작사, 작곡한 것으로 제한)
(Limited to the songs, lyrics, written by the Artists) 
순수익의 70%
70% of Net Profit 
마스터(원반권) 로열티
*마스터(원반권) 로열티는 전액 ‘갑’ 수입으로 함 
Master Loyalty
*The whole amount of Master Loyalty is considered to be SM's revenue 
해당 안 됨
Not Applicable

- 19 -

제10조(이익금의 분배 - 방송, 행사, 광고, 초상권 등))4

Section 10. (Distribution of Profits - TV, Events, Commercials, Copyright etc)
(그룹 경우 구성원 수로 균등분할)
Overseas Revenue
씨에프(CF), 이벤트(EVENT), 기타 연예활동
CF(Commercials), Events, & Miscellaneous Activities
순이익의 70%
70% of Net Profit
각종 계약체결 증거(계약)금 내지 선수금
Up front payment and/or down payments from various contracts
‘갑’의 실 수령금의 10%
10% of amount received by SM
CM수입(계약금, 출연금 등 포함)
TV, 라디오, 케이블, 위성방송, 잡지, 콘서트, 이벤트 등 출연
Commercials (Guarantees, Appearances Fees included), TV, Radio, Cable, Satellite, Magazines, Concerts, Events etc.)
Regular appearances
순이익의 65%
65% of Net Profit
Promotional/temporary guest appearances
‘갑’의 홍보비용으로 충당
Used for cost of promotion
인터넷 비즈니스 수입 (모바일 등 인터넷 관련 일체의 수입)
Revenues from Internet Business (Mobile & any revenues from Internet)
순이익의 10%
10% of Net Profit
연예인 실사 초상(사진)을 이용한 화보집
(디지털/온라인 수입은 상기 인터넷 비즈니스 수입으로 간주함)
- 화보집은 초상(사진) 자체를 목적으로 기획, 제작된 상품에 한함
Photo Books using actual pictures of the Singers(Digital/Online income is considered Internet Business Revenue) - Photo Books are limited only for the products planned and produced for sales of the actual photos.
순이익의 60%
60% of Net Profit
위 화보집 이외 기타 초상, 상표, 상호, 지적재산권 등을 이용한 캐릭터, 라이센스 상품 - 팬시류, 의류, 신발류, 문구류, 토이류, 생활용품류 - 또는 재화
Character products & Licensed products utilizing Photos (except for the picture books mentioned above), Brand, Brand Name, Intellectual properties - Accessories, Clothes, Shoes, Stationary, Toys etc.
순이익의 10%
10% of Net Profit


  1. Honestly, your site has a lot of good research and stuff, but I'm still so confused... I mean, I'm not on either Homin or JYJ's side. So I was just wondering, did DBSK ever have to take part in paying for the cost of their promotions and managers and staff, etc. or whatever? Or does SME pay for it? And also... (again, I'm not on either side, I'm just bringing up a point here...) if JYJ's contract WAS fair, then how come the courts ruled in their favor? -so confused-

  2. @ Abbey

    Read my other posts. Operating cost is explained in my other post.

    As for the court ruling, I am going to post about it too, but in a nutshell, there was NEVER a ruling on the contract itself. That lawsuit is still going on. Only ruling the court gave was to suspend the effect of the contract until the main lawsuit is over.

    You were only exposed to the articles written biased towards JYJ, that's why it's not really clear and confusing.

  3. I hope all Cassiopeia and JYJ stans could read this.
    Thanks for the information!
    The profit is not that bad after all...

  4. @ takashimio
    It's really not, I think the profit is quite good actually.

  5. yes I'm agree with takashimio, the profit sharing isn't that bad like Junsu's dad said :/

  6. Well, making albums was still their main activity as singers and they only got 2% or 3% for that... But it's not clear what acivity was making more money.
    I'm gonna check out the other posts.

  7. I actually feel that the profits are kinda siding towards the bad side? I mean, 2% is really stingy, roflol. I don't think it's about whether the money they get is good or enough for them, but it's whether they are earning as much as they worked for and they deserved. Well, simply put it, would you work hard and get half of what you have made, even if it is a lot? You will feel cheated.

    But I don't know, this is why I probably don't go into K-Pop cause' it's all scary and all.

    Still, I feel we should respect both parties' decisions and not bash the other party. They're all making music like they want to so leave them be, we don't know the truth about their feelings so we can't judge or anything. We aren't their puppeteers, who are we to say that they have no right to choose whatsoever decision?

    As long as they are happy, I think the fans should be happy and not label Homin as 'brainwashed slaves' and JYJ as 'greedy betrayers'.

  8. @ Elsa

    It's 2% to 5% from the total sales, not from the profit, and that makes a huge difference. So even if SM loses money from all the cost involved in producing an album, the band members will get paid. On top of that, they get bonus payment if the total sales exceeds 500K

    @ The Ha Ha Gyrl
    Well it's the 3 themselves who won't leave the 2 alone. As soon as the TVXQ's comeback was announced, what did the 3 do? Start tweeting, that's what they did. That was from the people who asked Avex to cut ties with YH & CM and did all the Japanese activities on their own.

  9. I'll be a person who is well informed with contracts and the general economy of things, TVXQ's contract was and still may be one of the best I've seen especially on how profit is distributed. The more public appearances they did/do, the more money they had to win. Remember we aren't speaking about a mere $1500...we're talking about an average for a stars that huge in the industry...$25,000-$750,000 for just appearing at one show and plus the other things like make-up, clothing, etc. (Just do the math: 750,000x0.02=$15,000)SM invested time, resources, and hope into making them as big or bigger then what they were. Everyone had a motive as to why they left or stayed; we just have to respect their decision. We're here to support them, no one has a right to judge one or the other and it's painful that it ended as it did because of the scandalous behavior people took. Just be glad they are still singing and doing what they love with more passion then ever before because we waited for them to return to the stage as 5 but are now 3:2.