NewJeans is currently the center of attention in the Korean music industry, when 5 members (Minji, Hanni, Danielle, Haerin, Hyein) sent a letter to the management company ADOR stating that they will terminate their exclusive contract if their requests for correction are not met.
The Korean public is currently discussing the possibility of NewJeans leaving HYBE Group and the amount of money the group will have to pay if the contract termination lawsuit actually goes through.
Specific contract terms for NewJeans, which launches in 2022, have yet to be revealed, a post on a Korean online community explained.
However, according to the standard exclusive contract guidelines set by the Korea Fair Trade Commission, the contract termination penalty is calculated by multiplying the average monthly revenue over the past 2 years by the number of months remaining in the contract.
According to previous reports, ADOR recorded revenue of about 190 billion won ($125.6 million) in the 24 months from the second half of 2022 to the first half of this year.
Since ADOR's revenue is solely based on NewJeans, this amount can be considered NewJeans' sales revenue. Based on the Fair Trade Commission's standard exclusive contract guidelines, the estimated penalty is at least 300 billion won (about 214.1 million USD).
Furthermore, if NewJeans goes independent, they will likely have to give up their group name and related intellectual property (IP). Since ADOR and HYBE own NewJeans' IP, the group will likely have to promote under a new name if they leave the company and go independent.
Given the current circumstances, separating from HYBE is not easy for NewJeans.
However, there are still many opinions supporting NewJeans to terminate the contract, because HYBE showed an attitude of abandoning the group from the beginning.
In its letter to ADOR, NewJeans referred to HYBE’s internal report, which was released during a recent congressional audit. The report stated: “We are tired of the phrase “New-IL-Le” (NewJeans-ILLIT-LESSERAFIM), just remove New (NewJeans) and create a new phrase.”
NewJeans requested ADOR, as the group's management company, to take appropriate action against HYBE's decision. The group gave ADOR 14 days to resolve the issues, or else the contract would be terminated.
After receiving the letter, ADOR responded: “We are reviewing the content while taking into account NewJeans’ stated requests. We will do our best to resolve the issue amicably and continue to work with the artists.”
