After three of the five members of the Korean pop band Dong Bang Shin Gi, aka TVXQ, took legal action against the group’s management agency, S.M. Entertainment, on July 31, claiming an unfair contract, officials began examining how other top groups are being managed.
What they’ve found was sometimes startling. Yuna, a member of a band called Girls’ Generation that is under the same agency, is in a 13-year contract similar to the ones claimed by the three TVXQ complainants.
A member of Super Junior, a 13-member pop band managed by S.M., cannot leave the company for between five and 13 years.
“Even though I want to transfer to another management agency, it is not easy because of the long contract period and a large penalty I would have to pay,” the member said during a phone interview with the daily newspaper Ilgan Sports. “Since each member receives 1/13 of total profit earned from the band’s record sales, individual income is not that high.”
Members of the Wonder Girls, a five-member girl band under JYP Entertainment, have signed an exclusive 7-year contract.
Members of pop groups Big Bang and SS501 are locked into 5-year contracts by YG Entertainment and DSP Entertainment, respectively.
During its investigation into 20 management companies starting in April, the Fair Trade Commission has found unfair contract clauses for 230 entertainers managed by 19 agencies.
Included in such clauses are ones mandating that entertainers have to report their whereabouts to the manager at all times, contractors are not allowed to get any job in the entertainment industry after terminating contracts and contractors cannot retire without authorization from the manager.
Following the investigation, large agencies have completed either renewing or revising contracts and small and medium companies are in the process of doing so. So far, most legal disputes have been between agencies and actors and actresses rather than singers. “The reason why controversies over unfair contracts among singers have not surfaced is that within Korean pop music, there still exists a custom of running the business by verbal agreement rather than strict contract clauses,” said an executive official from an agency who asked not to be named. “Many new singers think that it is hard to become a star if they file complaints against their companies. I believe there are a lot of entertainers suffering from unfair contracts.”
The official also said that members of idol pop bands are mostly teenagers when they sign contracts and have to serve two to three year apprenticeships. They have no choice but to accept unfair contracts because they will not have a chance to debut if they fail to satisfy managers during their training period.
Many experts say disputes between agencies and entertainers occur because agencies try to make up for initial investment costs they expend in promoting idol groups. Also, some budding stars fail to make it despite the investment, leaving the agencies holding the bag. Agencies complained that it is difficult to run the company when contracts are revised after an entertainer becomes popular because of various investment costs.
Others see things differently. “If Korean management agencies keep on taking the lion’s share of profits earned by their entertainers, more legal disputes like TVXQ are bound to happen,” said Lim Jin-mo, a music critic.
Experts say the only way to limit onerous contracts is to adopt new rules and regulations. Along with these steps, some suggest that the patriarchal system that lets agencies treat their entertainers as chattel needs to be modernized.
As conflicts related to unfair contracts have flared in recent years, the Fair Trade Commission began a contract-by-contract probe into the issue and has requested revisions. Some improvements have been enacted. And the commission introduced a system of using “standard contracts” for entertainers last month and strongly recommended that the entertainment industry to use it.
However, there are exceptions in the revised contracts letting an agency sign long-term contracts for special reasons, such as a long period of overseas activity. Korea Entertainment Producers’ Association has come out against the new system, saying that it does not reflect the reality of Korean pop music.
Perhaps the Achilles’ heel of the proposed contract is that it is merely a recommendation that has no enforcement teeth. Japanese fans of TVXQ and many experts there deride Korean entertainment management. They said it is impossible to sign a contract that lasts for more than 10 years in Japan.
But there are differences in the entertainment culture of the two countries. In Japan, where the scale the entertainment industry is much larger than in Korea, a few big agencies are firmly in control of the industry. New entertainers renew their contracts every two or three years and get paid monthly. In the United States, one entertainer is sometimes managed by two separate companies, a management agency which supports overall activities, and an agent overseeing an entertainer’s products and contracts.
“The entertainment industries in the United States and Japan have developed after going through a lot of trial and error. It is impossible and not right for Korea to immediately follow their example,” said Hong Sung-kee, president of Korea Entertainment Law Society.
Some say culture is more important than changes in written rules and laws. In a culture that refers to an agency as an entertainer’s benefactor while treating a singer as a betrayer when he or she complains, it is difficult to develop a reasonable contract. “Even though more Korean entertainers are becoming popular on the global stage, the system of managing them has not changed,” said Lee Dong-yeon, professor of Korean Traditional Arts at Korea National University of Arts.
“A new management system and culture have to be developed so that new entertainers can also get legal advice when signing contracts,” he said.