Here's the summary of what I've posted regarding the contract, and my thoughts about the lawsuit.
1. Summary
I think I've shown that the contract is much better than how it is perceived by most people, and also shown that there are a lot of misunderstandings caused by false/twisted info from the fansites/blogs/news articles.
The profit distribution of the contract is more than satisfying, actually I think it's quite good, and there's not much to complain about especially when TVXQ receives 70% of the profit from most foreign activities where they're most active (Japan).
http://truetvxq.blogspot.com/2010/12/closer-look-at-profit-distribution.html
I also think the 13 year contract term is fine since TVXQ was planned for foreign activities requiring lengthy terms, and it was decided with all the members' consent after everything was explained to them. When I post the transcript from the court trials, there will be more information regarding this.
http://truetvxq.blogspot.com/2010/12/about-13-year-term-is-it-really-that.html
I personally think the breach of contract clause is unfair, but that clause was following the guideline set by the Korean Fair Trade Commission.
http://truetvxq.blogspot.com/2011/01/korean-fair-trade-commission-and.html
In conclusion, it is of my opinion that the contract was not bad enough to file a lawsuit and break TVXQ. If the contract was the only problem CJS had with SM, they should have at least tried to re-negotiate the terms that they were not satisfied with instead of filing a lawsuit, and I believe SM would've worked with them and redo the contract. I have reasons to believe that, and those will be covered in the future when I post about the trial sessions.
2. About the Lawsuit
Having said that, if the lawsuit was solely decided on the contract itself, I think CJS have a good chance to win the case because of the breach of contract penalty clause despite SM following FTC's guideline. That is why CJS's lawyers have been concentrating on the contract itself, and been trying to persuade the judge to do the same. Also, that was the main reason why Super Junior's HanKyung won his case against SM. On the other hand, SM is trying to prove that CJS filed the lawsuit because of the Cosmetics company, and the contract was signed voluntarily by all the members.
There's another factor in this lawsuit. SM is claiming that CJS violated the terms of the Temporary Contract Injunction, and claims that CJS signed a contract with another company (dual contract). JYJ fans and TVXQ fans argue about this endlessly, and I will talk about it in future posts.
I think the Injunction judgment granting CJS to continue their activities until the main lawsuit may actually come back and hurt CJS's case because there were some damaging evidences found against them after the injunction, and most importantly, Avex is on SM's side now. I am very curious to see what kind of evidences will be presented on the next trial session. If Avex owns a copy of JYJ's contract with C-Jes, which I think they have, that could really hurt JYJ's case. SM also requested at least one member of JYJ to testify, and if the judge allows it, then it will be really interesting to hear what he says.
This case is to void/validate the contract, not about judging its fairness. Judging the fairness is a big part of this lawsuit, but it's not everything. Otherwise there's no reason for the judge to allow other evidences besides the contract itself if you think about it.
Ok, so that about wraps up my posts regarding the contract.
Next, I will be posting about the cosmetics company.
Showing posts with label Contract. Show all posts
Showing posts with label Contract. Show all posts
Monday, January 10, 2011
Monday, December 27, 2010
Translation of the Contract - Profit Distribution (English)
I have translated the parts of the contract that deals with the profit distribution.
Here's the link to the post with the original contract in Korean.
http://truetvxq.blogspot.com/2010/12/real-contract-korean.html
http://seoul.scourt.go.kr/dcboard/DcNewsViewAction.work?seqnum=6353&gubun=44
You can download the original pdf document from Korean Central Court website:
Click on the "09카합2869.pdf" to download. It contains the judgment from the temporary contract injunction and the contract.
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.
Section 9. (Distribution of Profits - Albums
Category | Distribution of Profits (Entertainer) For groups, divide the profits equally per number of members | |
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 | 50001 to 100K | 2% of Sales |
100K to 200K | 3% of Sales | |
Over 200K | 5% of Sales | |
Digital Wired/Wireless Downloads (Album, Songs) For free downloads Online, only when there's income from advertisement | 10% of Net Profit | |
On Line and wired/wireless Internet, Mp3, Digital files etc | 10% of Net Profit | |
Overseas Revenue (Revenues in Japan produced via SM Japan) | Performance Loyalty (Albums made overseas) | 70% of Net Profit |
Loyalty (Limited to the songs, lyrics, written by the Artists) | 70% of Net Profit | |
Master Loyalty *The whole amount of Master Loyalty is considered to be SM's revenue | Not Applicable | |
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Section 10. (Distribution of Profits - TV, Events, Commercials, Copyright etc)
Category | Distribution of Profits (Entertainer) For groups, divide the profits equally per number of members | |
Overseas Revenue | CF(Commercials), Events, & Miscellaneous Activities | 70% of Net Profit |
Up front payment and/or down payments from various contracts | 10% of actual amount received by SM | |
Commercials (Guarantees, Appearances Fees included), TV, Radio, Cable, Satellite, Magazines, Concerts, Events etc.) | Regular appearances | 65% of Net Profit |
Promotional/temporary guest appearances | Used for cost of promotion | |
Revenues from Internet Business (Mobile & any revenues from Internet) | 10% of Net Profit | |
Photo Books using actual pictures of the Singers(Digital/Online income is considered Internet Business Revenue) - Photo Books are limited only to the products planned and produced for sales of the actual photos. | 60% of Net Profit | |
Character products & Licensed products utilizing Photos (except for the picture books mentioned above), Brand, Brand Name, Intellectual properties - Accessories, Clothes, Shoes, Stationary, Toys etc. | 10% of Net Profit | |
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)
Right below that on number 1:
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."
"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?
-Precious
Thursday, December 23, 2010
The real contract (Korean)
There are many interpretations of the contract and articles that only shows parts of the contract. Get the real thing that's attached to a court document.
I will translate it when I can (it's long and complicated...).
Meanwhile you can try the google translator...
You can download the original pdf document from Korean Central Court website:
Click on the "09카합2869.pdf" to download. It contains the judgment from the temporary contract injunction and the contract. I've posted only the contract portion of the document below.
별지
전속계약 내용
제1조(목적)
‘을’ (신청인들을 의미한다. 이하 같다)의 연예활동을 효율적으로 수행하기 위하여 국내외 연예활동 및 선전, 출연, 섭외 및 모든 법률행위는 ‘갑’(피신청인을 의미한다. 이하 같다) 또는 ‘갑’이 지정하는 매니저가 관리대행하며 ‘을’은 활동에 대한 계약이나 약속을 개인적으로 할 수 없으며 작품활동과 연기에만 전념한다.
제2조(계약기간)
① 본 계약기간은 0000. 00. 00(신청인들의 해당 최초계약일)부터 시작하여 ‘을’의 연예활동(음반출시, 연속극이나 영화 중 조연급 이상 영화 : 20신 이상, 연속극 : 공중파에 있어 회당 평균 12신 이상 고정출연)의 데뷔일로부터 13년1)째 되는 날 종료하기로 한다.
② ‘을’의 개인 신상의 일로 정상적인 활동을 할 수 없는 경우에는 계약기간은 그 기간만큼 자동 연장된다.
제3조(권리의 양도)
① ‘을’의 모든 방송출연 및 국내외 연예활동에 관한 권리는 ‘갑’에게 있다.
② 계약기간 중 ‘을’은 ‘갑’의 판단으로 인하여 결정되어지는 일에 대하여 성실하게 임하여야 하며, 계약기간 중에 ‘을’의 임의대로 활동해서는 안되며, 이를 위약시는 제11조 제1항, 제2항, 제3항에 따라야 한다.
③ ‘을’의 모든 연예활동에 대한 출연 및 모든 권한은 ‘갑’에게 있는 것으로 한다.
④ 계약기간 중에 제작한 앨범과 녹음한 곡(미발표곡 포함)의 소유권은 ‘갑’에게 있다. 계약기간이 종료한 이후의 수익분배에 관하여는 본 전속계약에서 정한 분배율에
1) 최초계약 당시 10년이었던 것이 1차 부속합의에서 13년으로 변경되었다 의한다.
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⑤ ‘을’은 ‘갑’에게 본 계약으로 인하여 작사, 작곡, 편곡된 저작물에 대해서 복제권, 복사권, 음반권, 배포권, 방송권, 공연권, 가라오께, 2차적 저작물 작성권 등 그의 모든 권리를 양도한다.
⑥ 계약기간 중에 녹음, 제작한 곡들은 어떤 형태로든 ‘갑’이 사용할 수 있다(L.P, M.C, CD, CD-FMV, CD-I, CD-V, CD-G, L.D, VIDEO, 편집앨범, 베스트앨범, 광고, 영화, 사진, VIDEO 녹화, MP3, 각종음악화일 등 오디오가 들어 있는 모든 매체 등 필요하다고 판단되는 재편집, 재사용 등 어떤 형태로든 사용할 수 있도록 양도한다).
⑦ ‘을’은 자신이 작사 또는 작/편곡한 곡을 ‘갑’ 이외의 제3자에게 사용하도록 하는 경우, ‘갑’의 사전 동의를 얻어야 한다.
⑧ ‘을’의 매니저는 ‘갑’이 지정하는 사람과 해야 하며, 그에게 제반 일정에 대한 관리 대행을 일임해야 하며 성실히 임해야 한다.
⑨ ‘갑’은 ‘을’이 작사 또는 작/편곡한 곡을 ‘을’의 앨범 외에 ‘갑’이 제작하는 앨범에 사용할 수 있다.
⑩ ‘갑’은 계약된 내용의 전부 또는 일부를 타회사로 이관하여 사용할 수 있다. 다만, ‘을’이 사전에 명시적으로 반대하는 의사를 표시하는 경우에는 그러하지 아니하다2).
제4조(계약 위임)
- ‘갑’이 결정하여 관리 대행하는 사항들은 다음과 같으며, 이는 국내외를 모두 포함한 것이며, ‘갑’은 계약상의 모든 권리를 이관하여 사용할 수 있으며, 타사에 관리를 대행시킬 수 있다.
1. 방송출연 및 일정 계약(인터넷 포함)
2. 국내외 공연 및 제반행사 계약
3. 영화 및 광고 계약
4. ‘을’의 사진 및 명의 사용(초상권 및 상호권, 상표권 등)
2) 단서가 4차 부속합의에 추가됨
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5. 작사 및 작곡, 편곡의 사용 계약
6. 법적 문제의 권리대행 및 관리
7. 국내외의 모든 연예활동
- 본 계약 이후 ‘갑’에 의해 만들어진 모든 저작물에 대한 소유권 및 저작권은 ‘갑’이 소유한다.
제5조(‘갑’의 의무)
① ‘을’의 인기 관리를 다한다.
② ‘을’의 제반 일정에 대하여 신속하게 통보하여야 한다.
제6조(‘을’의 의무)
① ‘을’은 본 계약상의 내용과 ‘갑’의 내부사정을 외부로 발설하지 않아야 한다.
② ‘갑’ 또는 매니저가 요구하는 공연 및 방송출연 등 제반일정에 대한 출연의무를 부담한다.
③ ‘을’은 일신상의 이유로 방송 또는 공연 등의 차질이 생길 때에는 사전에 ‘갑’ 또는 매니저에게 통보하여야 하며 특별한 사유 없이 문제가 발생하였을 때에는 ‘을’이 그 책임을 져야 한다.
④ ‘을’의 매니저는 ‘갑’이 지정하는 사람과 해야 하며, 제반일정에 대한 관리 대행을 일임해야 하며, 성실히 임해야 한다.
⑤ 계약 만기일로부터 6개월 전의 날짜와 계약 만기일 사이에 ‘을’은 반드시 ‘갑’이 요구하는 새로운 음반을 1회 출시(녹음 및 취입)하고, 그 앨범의 P.R에 관련된 연예활동(6개월 이상)을 반드시 수행하도록 한다.
⑥ ‘을’은 ‘갑’의 요구가 있을 시, 매년 2장 이상의 정규앨범을 제작하고, 그에 따른 녹음 및 연예활동을 수행하며, 모든 과정에 성실히 임한다(앨범 제작시기는 ‘갑’이 정하며, ‘을’은 이에 따른다).
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제7조(‘을’의 권리)
‘갑’으로부터 본연의 임무 이외의 요구가 있을시는 거절할 수 있다.
제8조(P.R과 제작비용)
① P.R은 가급적 서로 협조하여 동참한다.
② P.R 기간 중 ‘갑’이 판단하여 P.R 정지가 필요할 때에는 정지할 수 있으며 ‘을’의 활동을 중지할 경우 이는 ‘갑’의 결정을 따른다.
③ ‘갑’과 ‘을’의 음반 제작에 있어서 ‘갑’은 제작비용을 포함한 모든 것에 책임을 지며 그에 따른 이익과 손해는 ‘갑’에게 귀속된다.
제9조(이익금의 분배-음반)3)
3) 최초계약(부속합의로 일부 변경된 내용은 별도 표시)의 내용은 아래와 같았는데, 2차와 5차 부속합의를 거쳐 수익배분 항목, 방식, 비율 등이 일부 조정되었고, 최종 5차 부속합의의 내용은 2008. 7. 1.부터 소급적용하기로 하였다.
「제9조(이익금의 분배 - 음반)
① ‘을’이 가수로서 음반을 발표하여, 단일음반 판매량 중 반품을 제외하고 50만장 이상 판매되었을 경우, 그 다음 앨범발매시 50,000,000원을 지급하는 것으로 하고, 100만장 이상 판매되었을 경우 100,000,000원을 지급하는 것으로 한다(단, 싱글 음반은 50만장 이상시 25,000,000원, 100만장 이상시 50,000,000원으로 한다).
단, ‘을’이 계약후 팀(그룹)의 일원으로 활동할 경우 위 금액을 그 팀의 인원수만큼 나눈 금액을 지급받는다.
단, 앨범발매 후 5년 경과 후부터 상기인세에서 100% 범위 내에서 ‘갑’이 상향조정할 수 있다(→ 1차 부속합의에서 “‘을’의 첫 번째 음반 발매 후 10년 째 되는 날 이후에 위 규정에 의거하여 분배되는 이익금은 ‘갑’과 ‘을’의 협의로 그 금액의 4배 이내에서 조정할 수 있다”로 수정)
② ①항의 경우는 오직 ‘을’의 정규앨범의 수익부분에만 해당하며, ‘갑’이 제작한 2차적 편집물(라이브음반, 베스트음반, 옴니버스음반, 기타모음집) 등에 의한 수익은 모두 ‘갑’의 소유로 한다.
- 이미 발매된 ‘을’의 곡을 ‘갑’이 컨필레이션음반(편집앨범)으로 재발매할 경우, 수익은 모두 ‘갑’에게 귀속되며, ‘을’이 발매된 적 없는 새로 부른 곡을 ‘갑’이 컨필레이션음반(편집앨범)에 섞어서 발매할 경우, ‘을’의 수익은 ①항의 수익에 앨범에 삽입된 새로 부른 곡수의 비율만큼을 곱한 후, 그 금액을 ‘을’의 수익으로 지급받는다{①항의 수익(100%)× 새로 부른 곡수/총곡수 = ‘을’의 수익}
③ 온라인 및 유무선인터넷상의 음원유통(MP3와 그 외 디지털음악화일의 유통 포함)에 대한 수익가 해외시장을 타킷으로 외국에서 제작된 음반의 경우는 순수익의 10%를 ‘을’에게 지급한다(‘을’이 그룹일 경우, 분배방식은 ①항과 동일).
④ S.M.이 제작하는 인터넷방송에 ‘갑’의 요구가 있을 경우 언제든지 출연하며, 인터넷방송은 ‘을’의 홍보로 해석하여, 이에 출연료는 지급하지 않는다(→4차 부속합의에서 “S.M.이 제작하는 인터넷방송에 ‘을’은 ‘갑’의 요구가 있는 한 정당한 사유가 없는 이상 출연해야 하며, ‘갑’은 이에 대한 출연료를 지급한다. 단, 본인의 음반 등으로 홍보하기 위해 출연하는 경우는 예외로 한다”로 수정).
⑤ S.M.방송제작물에 최우선 출연한다. 그리고 S.M.이 제작하는 모든 방송의 출연료는 공중파나 케이블 방송에 준하여 평균된 금액으로 책정하며 그 책정된 출연료의 50%를 ‘을’에게 지급하는 것으로 한다.」
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구분 | 수익배분율(연예인) (그룹 경우 구성원 수로 균등분할) | |
국내음반 및 패키지상품수익 (해외 라이센스 음반 포함) 본 수익배분은 정규앨범, DVD에만 적용 2차 편집물(라이브음악, 베스트음반, 옴니버스음반, 기타 모음집 등)은 제외 | 5만 1장 ~ 10만장 | 매출의 2% |
10만장 ~ 20만장 | 매출의 3% | |
20만장 | 매출의 5% | |
디지털 유무선 다운로드(음반, 음원) 단, 온라인 무료 다운로드시 일정 광고수익이 발생되었을 경우 | 순이익의 10% | |
음원 유통 - 온라인 및 유무선 인터넷, MP3, 디지털 음악 파일 및 유통 포함 | 순이익의 10% | |
해외수입 (일본지역 내 에스엠 재팬을 통해 발생된 매출) | 가창인세 (해외현지 제작음반) | 순이익의 70% |
저작권료 (‘을’이 작사, 작곡한 것으로 제한) | 순수익의 70% | |
마스터(원반권) 로열티 *마스터(원반권) 로열티는 전액 ‘갑’ 수입으로 함 | 해당 안 됨 | |
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제10조(이익금의 분배 - 방송, 행사, 광고, 초상권 등)4)
구분 | 수익배분율(연예인) (그룹 경우 구성원 수로 균등분할) | |
해외수입 | 씨에프(CF), 이벤트(EVENT), 기타 연예활동 | 순이익의 70% |
각종 계약체결 증거(계약)금 내지 선수금 | ‘갑’의 실 수령금의 10% | |
CM수입(계약금, 출연금 등 포함) TV, 라디오, 케이블, 위성방송, 잡지, 콘서트, 이벤트 등 출연 | 고정출연 | 순이익의 65% |
홍보출연 임시출연 | ‘갑’의 홍보비용으로 충당 | |
인터넷 비즈니스 수입 (모바일 등 인터넷 관련 일체의 수입) | 순이익의 10% | |
연예인 실사 초상(사진)을 이용한 화보집 (디지털/온라인 수입은 상기 인터넷 비즈니스 수입으로 간주함) - 화보집은 초상(사진) 자체를 목적으로 기획, 제작된 상품에 한함 | 순이익의 60% | |
위 화보집 이외 기타 초상, 상표, 상호, 지적재산권 등을 이용한 캐릭터, 라이센스 상품 - 팬시류, 의류, 신발류, 문구류, 토이류, 생활용품류 - 또는 재화 | 순이익의 10% | |
제11조(위약과 손해배상청구)
① ‘을’이 본 계약을 위반하였을 경우 그로 인하여 발생되는 손해는 배상하여야 하며 ‘을’이 연예활동에 영향을 미칠 수 있는 사건이나 행동을 일으켰을 때 그에 대한 전체의 책임을 ‘을’이 지며 그로 인하여 연예활동을 지속하기가 어렵다고 ‘갑’이 판단하는 경우 ‘을’의 활동을 중지시킬 수 있으며, ‘을’은 ‘갑’에게 손해배상하여야 한다(손해배상을 하여도 해약되는 것은 아니다).
② ‘을’은 손해배상으로 총 투자액(홍보비 및 기타 어떤 형태로든 지급되거나 사용된 제반비용)의 3배, 잔여 계약기간 동안의 일실이익의 2배를 ‘갑’에게 배상해 주어야 한다5).
4) 최초계약(부속합의로 일부 변경된 내용은 별도 표시)의 내용은 아래와 같았는데, 2차와 5차 부속합의를 통하여 수익배분 항목 을 세분화하고, 비율을 조정하였으며, 최종 5차 부속합의의 내용은 2008. 7. 1.부터 소급적용하기로 하였다.
「제10조(이익금의 분배 - 방송, 행사, CF, 초상권 등)
① 모든 고정방송매체 출연료의 40%를 ‘갑’에게 지급하여야 한다.
② 고정출연 이외의 게스트 및 가수로서의 방송 출연료는 ‘갑’의 홍보진행비로 전액 충당키로 한다.
③ 연예활동으로 생기는 모든 수입(제9조와 위 ①, ②항은 제외) 중에서 누적된 모든 운영비를 제외한 순수수입의 50%를 ‘갑’의 수입으로 한다.
단, 그룹(팀)인 경우 순수수입의 40%가 ‘갑’에게 귀속되며, ‘을’의 각 개인 수입은 다음과 같다
듀엣 - 30%, 트리오 - 20%, 4인조 - 15%, 5인조 - 12%, 6인조 - 10%
(운영비의 예) : ‘을’과 매니저 및 일을 도와주는 일행이 사용하는 경비를 뜻하며 구체적인 예로, 연예활동을 위한 모든 경비를 말함
- 교통비 및 숙박비, 식대, 메이크업 및 코디네이터 비용, 무용단 및 필요 무대인원 비용 등 실제 연예활동시의 일반적인 필요비용
- 매니저 및 로드매니저의 월급(매니저 월급은 80만 원으로 하고, 로드매니저가 필요하다고 판단되는 경우 1인당 월급은 60만 원으로 하며 매년 10%씩 인상한다)
- 숙소에서의 모든 생활비(수도광열비, 부식비, 파출부비용 외 기타)와 연예활동을 위한 트레이닝비
④ ‘갑’과 ‘을’의 이익 분배산정은 수입발생 후 6개월 이내에 이루어지도록 한다.」
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③ 해약을 원할 때에는 ‘갑’과 ‘을’ 쌍방이 합의된 경우 ‘을’은 ②항을 지켜야 한다.
제12조(분쟁 및 기타의 의무)
본 계약 조항에 관하여 해석상의 차이나 계약서에 명시되어 있지 아니함으로써 발생하는 문제는 관계법령 또는 상례에 따라 해석하여 ‘갑’과 ‘을’의 신뢰를 바탕으로 쌍방합의 하에 해결토록 한다. 끝.
5) 최초 계약시 “총 투자액의 3배, 잔여 계약기간 동안의 예상이익금의 3배 및 100,0000,000원”이었던 배상 금액이 3차 부속합의를 통하여 조정되었다.
1) 최초계약 당시 10년이었던 것이 1차 부속합의에서 13년으로 변경됐다.
2) 단서가 4차 부속합의에 추가됨
3) 최초 계약(부속합의로 일부 변경된 내용은 별도 표시)의 내용은 다음과 같았는데 2차와 5차 부속합의를 거쳐 수익배분 항목, 방식, 비율 등이 일부 조정되었고 최종 5차 부속합의의 내용은 2008. 7. 1부터 소급적용하기로 하였다. 제9조(이익금 분배 - 음반)
1. '을'이 가수로서 음반을 발표하여, 단일 음반 판매량 중 반품을 제외하고 50만장 이상 판매되었을 경우, 그 다음 음반 발매시 일금 5000만원을 지급하고, 100만장 이상 판매되었을 경우 일금 1억원을 지급한다.(단 싱글음반은 매 50만장 이상시 일금 2500만원, 100만장 이상시 5000만원으로 한다.) 단, 신청인이 계약후 팀(그룹)의 일원으로 활동할 경우 그 팀의 인원수만큼 나눈 금액을 지급한다. 단, 앨범발매 후 5년 경과 후부터 상기인세에 100% 범위 내에서 '갑'이 상향조정할 수 있다.( 1차 부속합의에서 "'을'의 첫 번째 음반 발매 후 10년 째 되는 날 이후에 위 규정에 의거하여 분배되는 이익금은 '갑'과 '을'의 혐의로 그 금액의 4배 이네에서 조정할 수 있다."로 수정)
2. 제1항은 신청인의 정규앨범의 수익부분에만 해당하며, 피신청인이 제작한 2차적 편집물(라이브음반, 베스트음박, 옴니버스음반, 기타 모음집 등)에 의한 수익은 모두 피신청인의 소유로 한다. - 이미 발매된 '을'의 곡을 '갑'이 컨필레이션음반(편집앨범)으로 재발매할 경우, 수익은 모두 '갑'에게 귀속되며, '을'이 발매된 적 없는 새로 부른 곳을 '갑'이 컨필레이션음반(편집음반)에 섞어서 발매할 경우, '을'의 수익은 제1항의 수익에 앨범에 삽인된 새로 부른 곡수의 비율만큼을 곱한 후, 그 금액'을'의 수익으로 지급받는다.(제1항의 수익(100%) X 새로 부른 곡수/총곡수 = '을'의 수익)
3. 온라인 및 유무선인터넷상의 음원유통(MP3와 그 외 디지털 음악파일의 유통 포함)에 대한 수익과 해외시장을 타킷으로 외국에서 제작된 음반의 경우는 순수익의 10%를 신청인에게 지급한다.(신청인이 그룹일 경우, 분배방식은 9조1항과 동일)
4. S.M.이 제작하는 인터넷 방송에 '갑'의 요구가 있을 경우 언제든지 출연하며, 인터넷방송은 '을'의 홍보로 해석하여, 이에 출연료는 지급하지 않는다.( 4차 보속합의에서 "SM이 제작하는 인터넷방송에 '을'은 '갑'의 요구가 있는 한 정당한 사유가 없는 이상 출연해야 하며, '갑'은 이에 대한 출연료를 지급한다. 단, 본인의 음반 등으로 홍보하기 위해 출연하는 경우는 예외로 한다."고 수정)
5.SM 방송제작물에 최우선 출연한다. 그리고 SM이 제작하는 모든 방송의 출연료는 공중파나 케이블 방송에 준하여 평균된 금액으로 책정하며 그 책정된 출연료의 50%을 '을'에게 지급하는 것으로 한다.
4) 최초 계약(부속합의로 일부 변경된 내용은 별로 표시)의 내용은 아래와 같이, 2차와 5차 부속합의를 통해 수익배분 항목을 세분화하고, 비율을 조정하였으며, 최종 5차 부속합의의 내용은 2008. 7. 1부터 소급적용하기로 하였다. 제10조(이익금 분배-방송, 행사, 광고, 초상권 등)
1. 모든 고정방송매체에 출연료의 40%를 '갑'에 지급하여야 한다.
2. 고정출연 외의 게스트 및 가수로서의 방송출연료는 '갑'의 홍보 진행비로 전액 충당키로 한다.
3. 연예활동으로 발생하는 모든 수입(9조와 10조 1, 2항은 제외) 중에서 누적된 모든 운영비를 제외한 순수수입의 50%를 '갑'의 수입으로 한다. 단 그룹(팀)인 경우는 순수수입의 40%가 피신청인에 귀속되며, '을'의 각 개인 수입은 다음과 같다.(듀엣 30%, 트리오 20%, 4인조 15%,
5 인조 12%, 6인조 10%) 운영비의 예: '을'과 매니저 및 일을 도와주는 일행이 사용하는 경비를 뜻하며 구체적인 예로, 연예활동을 위한 모든 경비를 말함. 교통비 및 숙박비, 식대, 메이크업 및 코디네이터 비용, 무용단 및 필요 무대인원 비용 등 실제 연예활동시의 일반적인 필요비용. 매니저 및 로드매니저의 월급(매니저 월급은 80만원으로 하고, 로드매니저가 필요하다고 판단되는 경우 1인당 월급은 60만원으로 하며, 매년 10%씩 인상한다.) 숙소에서의 모든 생활비(수도광열비, 부식비, 파출부비용 외 기타)와 연예활동을 위한 트레이닝비.
4. '갑'과 '을'의 이익 분배 산정은 수입발생 후 6개월 내에 이루어지도록 한다.
5) 최초 계약시 "총 투자액의 3배, 잔여 계약기간 동안의 예상이익금의 3배 및 10억원"이었던 배상금액이 3차 부속합의를 통해 조정됐다.
Lies about the contract
There are many wrong and/or twisted information on the web regarding the contract. I've visited a few sites to get information about it, and found out that most of the blogs and fan sites have translations from Korean fan sites that are biased towards JYJ.
Here are some examples from a site
I. TVXQ has received $0 for their album sales prior to July 2008, and only a negligible amount after that date.
This info is accurate, but what it fails to show is WHY they didn't make any money for the album sales. The truth is, when an artist sells less than 400,000 copies of CD's, there's no profit to take. There's a link below that explains why. Check it out.
Prior to the fifth and final round of amendments on July 1, 2008, the Contract read that for any album or single with sales not exceeding 500,000 copies, SM would be entitled to 100% of the profits, leaving the members with nothing. From the time of TVXQ's debut in late 2003 and until TVXQ's release of their 4th Korean album "Mirotic" in September 2008, no Korean album had sold more than 500,000 copies. Therefore, prior to July 2008 TVXQ has had absolutely zero income from their album sales.
This info regarding the contract is also true, but if SM's 100% profit equals $0 or close to that, then there's nothing to complain about, right?
On July 1,2008, SM amended the Contract to give each Member 1% of total sales for each album that sells over 200,000 copies. For any albums that sell fewer copies, the members are to receive 0.6% to 0%. SM has not honored even these outrageous terms, as it has not paid TVXQ a single cent since February 2009.
It is true that JYJ didn't get paid any money for their activities in 2009, but again, it doesn't explain why they didn't get paid. I'll elaborate on it on yet another post, but simply put, SM asked JYJ to come in to get paid, but JYJ hasn't complied yet, so you can't blame SM for that (according to the court testimonies from both sides). SM is ready to pay them so come and get it. *
In sum, SM has kept 100% of all sales that TVXQ has generated with the sales of their albums and singles prior to July 2008, and has kept 95% or more of the sales after that date.
This is such an ignorant claim, when you sell a CD for 10 bucks, and if TVXQ gets paid 5%, which is 50cents, does SME profits $9.50? Of course not. Who pays for the cost of producing and selling CDs? Promo fees? Music Videos? The fact is, the remaining 95% of sales are mostly used up to pay for the various costs. Check out this link to see how much a US artist who sells millions of CD's make. Guess what? A million seller makes less than 1% of sales from CDs.
http://entertainment.howstuffworks.com/music-royalties6.htm
II. TVXQ has received $0 for the sales of concert DVDs and albums featuring recordings from such concerts.
Under the Contract, the Members are not entitled to receive any share of the profits generated from sales of concert DVDs and "live" albums.
This is true. When you work out a contract, you give up some, and gain some. This must be one of those "give up" section.
III. TVXQ has received $0 for their appearances on TV programs.
Under the Contract, Members are not entitled to receive any share of the profits made through their TV appearances if the appearance is of a temporary nature. As all programs on which TVXQ appeared have featured the Members as "guests"and therefore by nature have been temporary, SM has kept all profits that TVXQ has generated from these TV appearances.
Again, unless you know how much they get paid as a guest, you can't say if it's right or wrong. I know that the appearance fee for a weekly music show is about $260.00 (sourced from news articles). WOW!!! SME kept all of $260.00, but wait, aren't there operation costs to appear on TV? Who pays for that? I'm sure other TV shows pay more than that, but I highly doubt guests guest appearances are paid much. Most of guest TV appearances are for promotional purposes, and you don't get paid much accordingly. That's why when two sides signed the contract, they agreed to use those profits as costs of doing promotion.
IV. For all other possible sources of revenue, SM subtracts from the total revenue all expenses, including salaries of other staff, stage preparation expenses, rent, travel expenses, food expenses, and the like, then gives TVXQ only a fraction of the remaining amount.
Yup, SME deducts those costs from gross revenue, then gives TVXQ a fraction of the pure profit. Wait until you find out what that fraction is.
As for all other sources of income, the Contract states that TVXQ is entitled to varying percentages of the "net income." The Contract defines "net income" to be the amount remaining after the applicable "operating costs". The "operating costs" are defined to include such expenses that are traditionally expected to be covered by the employer, including but not limited to 1) salaries of the staff (manager, clothing coordinators, makeup artists, dance crew, and the like), 2) performing stage preparation costs, 3) living expenses, including rent and water/electricity bills, 4) travel expenses, including plane ticket costs, 5) meal expenses, and the like.
Now this is totally twisted. The above statement say that employers normally pay for the costs, really? Let me work for an employer who pays my electricity bills & living expenses. Those sound like normal operating costs to me. And the way it works is, you deduct those operating costs, then from the NET PROFIT, SME and TVXQ takes their share. It also fails to mention how they share the profit.
The distribution works like this according to the contract:
SME:TVXQ = 40:60 (Korean activities)
SME:TVXQ = 30:70 (Overseas activities)
Suddenly those figures look pretty good, doesn't it? The fraction of the profit is 60% & 70%!!! SME gets 40% & 30%, and we all know most of TVXQ's activities were in Japan, so this contract is actually pretty good!!!
Even after all these "operating costs" are deducted from the net income, the Members are only entitled to a small percentage of the remainder while SM keeps the rest.
Yup, small percentage. Like I said above, 60% to 70%. SM keeps the rest, 30%-40%
So like I listed above, not everything is as easy to figure out as it looks. You need to understand the industry, and you need to read every single line of the contract to figure out what's going on. I will add more info to this post as I find more info, and update the links with more detailed explanations.
Also, don't forget, there are other sources of income that they didn't list, like commercials, picture books etc.
Those sites basically list sections of the contract that LOOK bad, and once you analyze them, even those are not bad. So to really know if a contract is good or bad, you need to read the WHOLE THING!!!
Here are some examples from a site
I. TVXQ has received $0 for their album sales prior to July 2008, and only a negligible amount after that date.
This info is accurate, but what it fails to show is WHY they didn't make any money for the album sales. The truth is, when an artist sells less than 400,000 copies of CD's, there's no profit to take. There's a link below that explains why. Check it out.
Prior to the fifth and final round of amendments on July 1, 2008, the Contract read that for any album or single with sales not exceeding 500,000 copies, SM would be entitled to 100% of the profits, leaving the members with nothing. From the time of TVXQ's debut in late 2003 and until TVXQ's release of their 4th Korean album "Mirotic" in September 2008, no Korean album had sold more than 500,000 copies. Therefore, prior to July 2008 TVXQ has had absolutely zero income from their album sales.
This info regarding the contract is also true, but if SM's 100% profit equals $0 or close to that, then there's nothing to complain about, right?
On July 1,2008, SM amended the Contract to give each Member 1% of total sales for each album that sells over 200,000 copies. For any albums that sell fewer copies, the members are to receive 0.6% to 0%. SM has not honored even these outrageous terms, as it has not paid TVXQ a single cent since February 2009.
It is true that JYJ didn't get paid any money for their activities in 2009, but again, it doesn't explain why they didn't get paid. I'll elaborate on it on yet another post, but simply put, SM asked JYJ to come in to get paid, but JYJ hasn't complied yet, so you can't blame SM for that (according to the court testimonies from both sides). SM is ready to pay them so come and get it. *
In sum, SM has kept 100% of all sales that TVXQ has generated with the sales of their albums and singles prior to July 2008, and has kept 95% or more of the sales after that date.
This is such an ignorant claim, when you sell a CD for 10 bucks, and if TVXQ gets paid 5%, which is 50cents, does SME profits $9.50? Of course not. Who pays for the cost of producing and selling CDs? Promo fees? Music Videos? The fact is, the remaining 95% of sales are mostly used up to pay for the various costs. Check out this link to see how much a US artist who sells millions of CD's make. Guess what? A million seller makes less than 1% of sales from CDs.
http://entertainment.howstuffworks.com/music-royalties6.htm
II. TVXQ has received $0 for the sales of concert DVDs and albums featuring recordings from such concerts.
Under the Contract, the Members are not entitled to receive any share of the profits generated from sales of concert DVDs and "live" albums.
This is true. When you work out a contract, you give up some, and gain some. This must be one of those "give up" section.
III. TVXQ has received $0 for their appearances on TV programs.
Under the Contract, Members are not entitled to receive any share of the profits made through their TV appearances if the appearance is of a temporary nature. As all programs on which TVXQ appeared have featured the Members as "guests"and therefore by nature have been temporary, SM has kept all profits that TVXQ has generated from these TV appearances.
Again, unless you know how much they get paid as a guest, you can't say if it's right or wrong. I know that the appearance fee for a weekly music show is about $260.00 (sourced from news articles). WOW!!! SME kept all of $260.00, but wait, aren't there operation costs to appear on TV? Who pays for that? I'm sure other TV shows pay more than that, but I highly doubt guests guest appearances are paid much. Most of guest TV appearances are for promotional purposes, and you don't get paid much accordingly. That's why when two sides signed the contract, they agreed to use those profits as costs of doing promotion.
IV. For all other possible sources of revenue, SM subtracts from the total revenue all expenses, including salaries of other staff, stage preparation expenses, rent, travel expenses, food expenses, and the like, then gives TVXQ only a fraction of the remaining amount.
Yup, SME deducts those costs from gross revenue, then gives TVXQ a fraction of the pure profit. Wait until you find out what that fraction is.
As for all other sources of income, the Contract states that TVXQ is entitled to varying percentages of the "net income." The Contract defines "net income" to be the amount remaining after the applicable "operating costs". The "operating costs" are defined to include such expenses that are traditionally expected to be covered by the employer, including but not limited to 1) salaries of the staff (manager, clothing coordinators, makeup artists, dance crew, and the like), 2) performing stage preparation costs, 3) living expenses, including rent and water/electricity bills, 4) travel expenses, including plane ticket costs, 5) meal expenses, and the like.
Now this is totally twisted. The above statement say that employers normally pay for the costs, really? Let me work for an employer who pays my electricity bills & living expenses. Those sound like normal operating costs to me. And the way it works is, you deduct those operating costs, then from the NET PROFIT, SME and TVXQ takes their share. It also fails to mention how they share the profit.
The distribution works like this according to the contract:
SME:TVXQ = 40:60 (Korean activities)
SME:TVXQ = 30:70 (Overseas activities)
Suddenly those figures look pretty good, doesn't it? The fraction of the profit is 60% & 70%!!! SME gets 40% & 30%, and we all know most of TVXQ's activities were in Japan, so this contract is actually pretty good!!!
Even after all these "operating costs" are deducted from the net income, the Members are only entitled to a small percentage of the remainder while SM keeps the rest.
Yup, small percentage. Like I said above, 60% to 70%. SM keeps the rest, 30%-40%
So like I listed above, not everything is as easy to figure out as it looks. You need to understand the industry, and you need to read every single line of the contract to figure out what's going on. I will add more info to this post as I find more info, and update the links with more detailed explanations.
Also, don't forget, there are other sources of income that they didn't list, like commercials, picture books etc.
Those sites basically list sections of the contract that LOOK bad, and once you analyze them, even those are not bad. So to really know if a contract is good or bad, you need to read the WHOLE THING!!!
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